The Israeli gaming industry is not so vast and rich. The list of relatively famous games made in Israel is small, but there are plenty of the same gaming innovations that changed the idea of games. And it’s hard to argue with Israel’s one of the first places in terms of the number of these same inventions and innovations in areas other than games. This small piece of land, located in the middle of the desert Arabian Peninsula, barely larger than the size of the Ivanovo region, creates incredibly efficient working conditions for startups to grow by leaps and bounds. And, perhaps, almost all the whales of the technology industry have long fixed their tenacious gaze on the Promised Land.
In this blog we will talk about technologies that also give rise to the gaming industry, touch on the history and economy of the state, outline the most significant moments of the gaming industry and end, suddenly, with music. I tried to reveal the topic in the most detail, holistically and comprehensively, although sometimes going in the most unexpected directions.
Happy reading!
Preface
The idea for this blog came to me in November 2021 after re-watching the “Game Geography” episode about Poland from Katerina Krasnopolskaya. Rays of goodness to her. In January–February 2022 there was an active phase of searching for material. But, unfortunately, the process stalled and dragged on for a couple of years. The topic is extensive, but there are no definitively complete works in either Russian or English. And in Hebrew, too, there’s really no hummus or forshmak due to the lack of full-fledged gaming journalism in Israel. So let’s be the first. Therefore, the story turned out to be more than voluminous, but not always complete.
I would like to note that it will be very difficult to talk about games and technology without the history of startups typical for Israel. And you can’t talk about this without mentioning the technical revolution of the 90s and the history of the state itself. Fortunately for you, I won’t start with biblical times, because then it’s unlikely that things will come to games, and an analysis of Evangelion was not planned here (yet). Believe me, I will try to move directly to video games as quickly and smoothly as possible. But, again, it will be very difficult to talk about the same Kinect technology and its fate without the history of startups, and you can hardly talk about them without decent historical information.
What does the $730 million gaming industry represent, which is not widely known to the average gamer?? Do you want to know? Sit down comfortably, no one is slowing down, next stop is Takhana-Merkazit!
What is the gaming industry in Israel now??
Israel, with a population of 7.7 million, is home to more than 200 gaming companies and hundreds of technology businesses. In 2013, European companies accounted for 70% of the fastest growing Facebook game developers* (product of Meta* – designated an extremist organization). However, Israel occupies the following leading position: half of the 10 most successful companies in this field are located in Israel. Israel’s Ministry of Economy estimates the country’s gaming industry to be worth NIS 2.5 billion (about $730 million).
But how exactly did the social gaming industry get to this level?? Israel has long been known as a hub for innovation and startups, and this reputation has played a key role in the rapid development of the mobile gaming industry.
This trend is due to the fact that Israel, like the United States in the 19th and 20th centuries, has always attracted people from different countries. These people brought with them not only different skills and abilities, but also a deep understanding of the tastes and interests of the societies from which they came. It was this understanding that gave them their main advantage: the Israelis have no equal in developing products designed for an international audience, since this nation is, so to speak, a smaller version of such an audience. Games bring people together regardless of race, color or religion.
In the history of the Israeli gaming industry, certain events may have catalyzed growth. One of these events was the purchase of Playtika, a large developer of social games, in 2011 by the American gaming giant Caesars. This acquisition, which occurred just 8 months after Playtika was founded, was one of the fastest startup acquisitions in Israeli history.
According to the Ohio-Israel Chamber of Commerce, Israel has a high level of education, especially in science and technology. There are 135 scientists and engineers for every 10,000 people, which is higher than other developed countries. Moreover, the relatively small territory of Israel facilitates effective interaction between highly qualified specialists.
The success of the Israeli gaming industry is likely due to its multinational nature. This diversity of cultures has allowed Israel not only to gain a place in the global market, but also to see the importance of communication in online games. Today, Facebook (a product of Meta – recognized as an extremist organization), as well as other social networks, are becoming centers for the development of gaming culture, especially in countries with developing economies. If this trend continues, Israel will not only continue to lead the way in the production of social games, but will also help to recognize their importance among players around the world.
Current technology development
So, we will start not with the closest thing to games – with startups. In fact, this is quite a significant part of the modern identity of the country’s IT industry, since Israel has approximately 6,000 successful startups. It would seem that what these numbers say? For a moment, this is the largest number per capita in the world. Moreover, by a large margin from other countries. It ranks third in the ranking of countries by the number of companies registered on the NASDAQ international exchange, second only to the USA and China.
Israel was also named the fifth most innovative country by Bloomberg, and the number one country in research and development. The country has more startups than India, Japan, Korea, Canada and the UK. In fact, this is a global center of science and technology, where companies such as Apple, Amazon, Facebook (a product of Meta is recognized as an extremist organization), Google, Intel and many others cooperate with more than 300 Israeli R&D centers, a kind of “fashion bureau” of the IT sector. (note. research and development center – special enterprises aimed at creating and implementing new products and solutions together with new technical enterprises, students and developers).
At the same time, these are not some cheap companies. Israeli startups like WiX (the most popular website builder) and fiverr (global online platform for freelance services), are extremely successful. Waze (navigation system that allows you to monitor the traffic situation in real time), for example, it was sold to Google for $1.3 million. Mobileye (driver assistance systems to reduce the risk of collision) was sold to Intel for $15.3 million, and that’s just the tip of the iceberg.
But let’s try to figure out how Israel, a small country with a population of only 8.5 million people, became known as the “startup country”. At the same time, constantly fighting off wars, internal conflicts and not having at least some natural resources? Given the mass of international boycotts and violent conflicts, how did Israel create such a huge wave of innovation??
History and its immediate relevance
Believe me, it wasn’t always like this. I’ll try to paint a picture with rough strokes. Since its founding in 1948. and all the way until the late 1980s and early 1990s, secular Israel was not in the best economic shape. Lacking many resources, the newly formed state was, roughly speaking, a semi-socialist wilderness with a constant shortage of money and debts to the USSR and the USA, on which the Jewish state was very dependent.
The resource shortage became even worse when nearly 700,000 Holocaust survivors and Jews from Muslim countries immigrated to Israel in the 1950s, literally doubling or even tripling its population. Israel managed to survive financially, receiving reparation payments from Germany in 1953. The following years did not bring significant economic growth. In the 1970s and 80s. Israel fell victim to a terrible recession and hyperinflation, which reached 445% by the economic crisis of 1984. But literally in the next ten years, Israel managed to change dramatically.
First of all, we need to go back centuries. Education has always been highly valued in Jewish tradition, so the first modern Israelis invested in knowledge and intellectual power, opening the Technion Institute of Technology in 1912., Hebrew University in 1925. and the Weizmann Institute of Science in 1934. This was, let me remind you, even before the founding of the state itself.
Okay, but Israel is not the only country where there are universities. What’s special about this particular case?? The answer may be specific challenges that the country has had to face throughout history. Jewish culture, in principle, has always required out-of-the-box thinking in order to survive. This is how it happened historically. Well, I don’t think you really need to tell you about the witty heroes of jokes.
Israel won the War of Independence www.casinocosmobet.net in 1948., despite the huge lack of resources and strength, and thanks to his resourcefulness. In that war, when Arab troops blocked the main Tel Aviv-Jerusalem road, eliminating the possibility of food and provisions being supplied to Jerusalem, the Israelis found an alternative way to bypass the blockade – they built a secret temporary road along the Judean Mountains, which they called the Burma Road. This example from the state’s early history shows Israel’s signature style of innovation: finding workarounds.
Whenever faced with one obstacle or another, Israel finds an alternative course, its notorious Burma Road. And believe me, there were always a lot of obstacles. For starters, the size of the country and economy. Perhaps Israel’s most serious challenge has been survival without resources such as non-salty water, fertile soil and energy. Oh yes, and there’s also the problem of enemy countries on all sides, who every day dream of wiping their little neighbor off the face of the Earth.
For years, the country relied on the import of weapons from other countries, naturally receiving one embargo after another. Israel decided to invest in the production of its weapons. Israel Aerospace Industries has developed the Lavi fighter jet, Israel’s highly advanced and innovative, but also crushingly expensive project. The project was closed in 1987., leaving 5,000 talented scientists and engineers in search of work. Suddenly, a combination of creative energy and advanced knowledge was freely available in the emerging IT market.
It was also the moment, at the turn of the decade, when the Iron Curtain finally fell and Soviet Jews were able to leave the USSR. Among these citizens of the Union there were many scientific engineers, doctors, not to mention, all 700,000 people were new consumers who appeared at the right moment, just when the IT sector began to gain heights. It is worth noting that this did not happen immediately, but rather gradually, but in historical reality these are simply insignificant periods.
Another important factor in the development of the IT sector was the Yozma program, initiated by the Israeli government in 1993. Its goal was to attract foreign investment in technical projects (they would later be called startups). This is one example of how Israel benefited from the massive immigration of new Soviet engineering talent into the country.
Government reformers created a suitable environment in which new technologies subsequently began to mature, and created serious incentives for entrepreneurs who wanted to open new companies. And in just a few years, Israel has become one of the world’s largest and most advanced technology centers.
Startup Country
Many believe there is another element shaping Israel’s innovation culture. Let’s take a look at culture again. Yossi Mathias, founder of Google’s R&D center in Israel, describes it as "chutzpah". The concept "chutzpah" from Yiddish roughly means “see every obstacle as another problem to be solved”, “not an insoluble problem, but rather a solution waiting to emerge”.» Israel is faithful to this principle in solving simple problems such as navigation or facilitating web design. Thanks Waze and WiX. But it also uses it to solve more global problems of humanity.
However, it doesn’t matter what you call it, Israelis have always been known for their brashness, showing little respect for their superiors or tolerance for the status quo. They simply refused to accept the situation as it was if they wanted it to improve. And the authority of the authorities is called into question almost every day. This will be discussed later when Microsoft opened its own division in Tel Aviv and began to be interested in the Kinect, which is closer to us.
Army as a means of education
Let’s take into account another factor that plays a key role in Israel’s innovative successes – military service. Upon reaching the age of 18, Israeli boys and girls undergo compulsory military service and defend the country for three years. How does compulsory military service help develop Israel’s technological potential??
For that matter, doesn’t the Army lock up would-be entrepreneurs for three years while they wait to get on with their lives in the private sector?? Not in the case of Israel. Imagine a workforce gaining best practices at an early age. They use the most advanced technology available in scenarios where financial success, and sometimes even their own life or death, is at stake. They regularly practice decision making in an environment where failure is never an option. Young soldiers learn to be self-reliant and resourceful. Seniors often tell subordinates to understand the situation, giving soldiers the freedom to think their own way and take control of the situation. One of the main goals of the army – training – is as important as drill training.
Young people become natural leaders, with courage and perspective gained at a much earlier age than in other countries. Nowhere are these qualities more evident than in the electronic intelligence team known as Unit 82-00.
Having achieved almost mythical status, the highly secretive 8200 recruits are the best of the best hackers, programmers, future engineers. They’re sort of the Avengers of tech geniuses. And these geniuses then do all sorts of amazing things.
Recruit 82-00 Avishai Abraham hacked computer systems of enemy countries in the 90s. before he founded WiX. Gil Shved was a codebreaker before inventing the world’s first commercial firewall and VPN in 1993. And there are hundreds more stories like these.
Graduates of Division 82-00 have founded more than a thousand startups and have their own alumni network that stimulates and develops new technologies. So, many factors played a role in the emergence of Israel as a “startup nation”: from the first innovative solutions needed to survive, to immigration, Israeli and Jewish culture, and service in the Israel Defense Forces.
However, Israeli startups are still experimenting and breaking new ground. Until now, the Israeli model has been to create an innovative technology and then sell it to one of the giants for millions or even billions. But now many startups are already choosing instead the path of their own development with the goal of becoming giants themselves. It seems that Israel will soon turn from a “startup country” into a global industrial center. But this will also bring new challenges. And only time will tell whether Israel will be able to scale up its business without losing the bold, innovative spirit that made it successful in the first place.
And now we’ll talk about the most important gaming startup that forever changed the image of seventh generation consoles, and in addition helped Microsoft win the race between the Xbox 360 and PlayStation 3 – we are talking about Kinect technology.
Kinect – the story of a legend
In mid-2005, Microsoft’s lead engineer and software architect Joe Bertolami sat and pondered what was next for its gaming division. He and his team tried to look into the future of Xbox and offer something new. At that moment, the first shipments of Xbox 360 were already being shipped. It was at that time that one technology attracted the attention of the company’s employees – these were cameras with a depth sensor that could recognize objects in the space of a room. It was then that a brilliant idea appeared in Bertolami’s head – to attract a young startup that would not only change the then understanding of games, but would fully open the doors to Israel for Microsoft. But before this happened, both Microsoft’s technical department itself and the creators of Kinect had to do active work. Some are in search of something new, others are in the process of creating it.
This wasn’t the first time Microsoft has explored camera-based technology. Depth sensor has been on the minds of many engineers at Microsoft over the years, moving from exciting new technology to something specific. But this was not even a concern of the gaming division of Microsoft Studios; the company was interested in this in general. And before the idea of Kinect, the technology, which was not yet called Natal, had to overcome a difficult path. And only later it became known as "a new motion sensor for the Xbox 360, designed to eliminate the very need for conventional physical controllers."It will be one of Microsoft’s biggest investments, but ultimately, as we already know, it won’t survive the long haul.
Let’s go back a little in the timeline. Aviad Maisels and four of his friends, after discussion, decided to start a company in Tel Aviv, which they called PrimeSense. The office was supposed to develop with a focus on gaming industry technologies, in particular, cameras with a depth sensor. They set out to create a camera that could recognize people and objects in 3D, and interpret gestures into control commands. Already in March 2006, PrimeSense demonstrated their work at GDC, and by the end of the conference they were able to get several contacts, including from Microsoft.
Literally a month later, in April 2006, the Japanese company Nintendo announced the release of its new console – Nintendo Wii. Sales started at the end of the year. The console was the first in this generation to give gamers the opportunity to physically touch video games. The Wii was able to sell the dream of physical interaction with games. It got people off the couch, standing and moving, turning previously sedentary gaming into something active. Thanks to the Wii Remote motion controller, which replaced standard gamepads, the Nintendo Wii became the most accessible console for the whole family at the time. The Nintendo Wii’s library of sports and family games appealed to a much wider audience than the Xbox 360 and PlayStation 3’s highly rated games. This was evidenced by the fact that it was a real hit in nursing homes.
Still, Microsoft’s general manager of hardware technology incubation, Alex Kipman, became interested in the technology. True, even by the end of 2006 the depth sensor was crude, unfinished and, most importantly, too expensive for mass production. Even for Microsoft. For the collaboration to move forward, several things had to change. First, PrimeSense’s sensor, called Project Natal (or simply Natal), was supposed to be smaller, cheaper and more accessible. And even so, PrimeSense technology alone was not enough for the end device. If Microsoft wants to invest in depth-sensing cameras, it also needs to develop hardware that not only uses them, but also that people want to buy. All this is quite difficult and expensive, but this is the work that Kipman was entrusted with.
In parallel with this, in the summer of 2006, the Xbox Live Vision camera appeared from the Californian company GestureTek, a peripheral webcam for the Xbox 360. One of its programs already contained the simplest algorithms for depth sensing and face tracking.
Engineers in the depths of Microsoft are trying to develop all existing ideas until two new employees rediscover the old ones, we are talking about Kudo Tsunoda and Darren Bennett, who joined Microsoft in 2008. They join forces with Kipman. While others are experimenting with what could become the Wii on Xbox, Tsunoda, Bennett and Kipman, along with a small team, are working on their experimental project based on depth cameras and a depth sensor. The main difference from previous options was how the machine learning system should recognize the user. As a result, they managed to assemble several prototypes. This helped identify the user’s skeleton along with the original technology from PrimeSense. The team ends up making several different demos. Like the Wii, they offer new ways to interact with games, ditching the standard controller in favor of a camera that can read the movements of the human body, translating that data into on-screen actions. It’s these demonstrations that are beginning to change Microsoft’s view of the future.
The presentation attracted the attention of the company’s management, after which they were instructed to direct maximum efforts to develop camera technology with a depth sensor. It was at this moment that Kinect, at that time bearing the name Natal in honor of Kipman’s hometown, was born. Over the next few years it will become one of the most important products for Microsoft.
Kinect now
Let’s figure out what Kinect technology means for us, gamers in 2024. I’ll start again from afar. The then-Project Natal was announced at E3 in 2009. The new Xbox 360 gadget still looked like the Wii, but only worse. Let me remind you that even at that time the Nintendo console was ahead of the total sales of the Xbox 360 and PlayStation 3. But Microsoft didn’t waste time. Even according to rough estimates, more than $1 billion was spent on the advertising campaign for the new device. If we use modern figures, then this is half of the development budget of GTA VI.
As a result, by the time Kinect was produced, most gamers had at least heard of Kinect, and many wanted to try out the technology of the future at home. It’s like metaverses and NFTs, but for the generation before last of consoles.
Along with the launch of Kinect came the game Kinect Adventures! In my opinion, this is the best game until the end of the console’s life cycle. The project perfectly demonstrated the capabilities of the console, was playful, interesting, and the beautiful design and music created an atmosphere of adventure. Ironically, the game became the best-selling game on the Xbox 360 in 2010, with 24 million copies. This happened due to the fact that the game came bundled with the Xbox 360 and Kinect itself. And yes, you understood correctly, in 2010 the same number of Kinect installations were sold.
We can talk about the history of Kinect for a long time, but I’m afraid we won’t get to anything else. This device managed to popularize the Xbox 360 console as much as possible. The innovation not only attracted attention, but also had a huge number of iconic and interesting games: starting from Just Dance that appeared then (and “Maykov’s answer” to her – Dance Central), the negatively acclaimed Kinect Star Wars (but after Disney bought Star Wars it doesn’t seem so bad anymore) and simply cool ones, Kinectimals, Kinect Joy Ride, innovative Child of Eden and others. We can say that for many Zoomers and Millennials, this addition to X-Box gave a lot of fun, expanded the horizons of their gaming experience and simply gave them the opportunity to have a good time with friends. In any case, for me this thing has always been and will remain the most vivid and unusual gaming experience, even surpassing in impressions the same virtual reality.
Kinect Adventures! – the main technology banger and one of the most popular Xbox 360 games
It was fashionable to try yourself as an Olympic athlete in Kinect Sports
Kinect Star Wars brought you a variety of Star Wars-themed entertainment. The game is still criticized by fans for being trash, but due to the famous franchise it sold well
Still from later Dance Central 3
Crazy Racing Kinect Joy Ride
Still from Child of Eden. I had this game. For more than ten hours I still didn’t understand what it was
The Kinect truly brought the Xbox 360 to life, but it was also responsible for the Xbox One’s biggest failure. The management installed everything on the device, adding it to the required package for purchase. And with the Xbox One came the death of the Kinect technology. For how long? In my opinion, yes. The gaming industry has taken a completely different path, preventing this technology from being integrated everywhere. Only one thing is clear, some of the developments of that same Project Natal are used in the gaming industry to this day. And it’s interesting to know where and when we will see them again. But that’s a completely different story.
Israeli Games – what are they??
The actual gaming (not technology) industry in Israel has much in common with the Russian one. In the same way, it was not forced by anything from the outside and followed a similar path of development. It had its “golden eras of quests” and “heydays of flash games.». The key difference is that the country is very involved in the global gaming industry. You can take any currently relevant AAA, and something in it was made outsourced by an Israeli studio – textures, models or the same animations. Does this make the game Jewish?? Not at all. It is the product of international production and the work of thousands of people. Therefore, I will try to cover only what is originally Israeli and reflects its domestic market.
I’ll also note that there are fewer gamers in Israel, because the country’s population is something like 10 million people. Games in Hebrew are a very niche product, and it is unlikely that now on Steam you can find at least one native Jewish AAA project, unlike us with the same Atomic Hearth in Russian.
The most ancient games in Hebrew are all kinds of quizzes from the 90s, which came out in thick cardboard packages. It is unlikely that they are now of any interest other than archival. Any PowerPoint presentation with a quiz will definitely be more challenging and graphically richer. The fact is that in Israel the boom of the first personal computers made a demand for games for office employees. And unlike “Perestroka” and various variations of “Klondike”, familiar to every Russian, in Israel this boom gave rise to many quizzes like “Who Wants to Be a Millionaire”.
The first truly iconic game is the Piposh quest. Her role for Israeli gamers can be compared with “Petka and Vasily Ivanovich” for Russians. Now in more detail about this phenomenon.
Piposh – an iconic quest from the 90s and its legacy today
Piposh (Hebrew: פיפוש) is a gaming franchise that began as a series of comedic adventure point-and-click video games developed by Guillotine and published by Hed Arzi Multimedia for Windows. The games follow an actor-turned-detective who goes on several adventures while solving murders.
Games in the series include titles including Piposh, Piposh 2, Halom SheItgashem (a spin-off) and Piposh 3D: HaMahpekha (can be translated as "Revolution"). An English version of Piposh called Piposh: Hollywood was published in 2002. The game series, which began in 1999, was created at a time when the Israeli video game industry was at its peak, especially in terms of quest games. Piposh served as a notable example of work aimed specifically at the young local market with aspects such as inside jokes relating to the culture of Israelis. The games became very popular in Israel, although they were never financially successful.