Representatives from the trade body, the Iran National Foundation of Computer Games, were on hand at a dedicated stand at gamescom in Cologne.
They were there to showcase the latest games developed in Iran, establish contacts, and to see if Western retailers would stock their games.
But they acknowledged the political situation would make it a challenge.
"We need more investors," said Amir Tarbyatjoui, head of Parsan Business Development Solutions who managed the Iranian stand.
"The [US] sanctions do affect our industry, but they cannot stop it."
'More potential'
Mr Tarbyatjoui said that Iran was becoming a leading player in video game development in the Middle East and that the event in Cologne was to show people just what they were capable of.
"We are using this event to promote what is happening in the Iranian games industry," he said.
"We believe we have more potential and we want to promote that potential."
There were a number of different types of game on offer, including a tank shooter set at the start of the Iran-Iraq war, a platform adventure set in Persia, an adventure game where you play the role of a girl called Sara; a young student caught up in events during the early stages of the Islamic Revolution in Iran, and a role-playing game called Age of Pahlevans based on Iranian mythology.
Bahram Borgheai, head of Ras Games who make Age of Pahlevans, told the BBC that Iran has a rich history that was custom made for video games.
"Persia has been around for a very long time," he said.
Mr Borgheai said that while most Western developers used Greek, Norse, or Roman mythology to base their games on, Iran had its own unique mythology that has rarely been used in video games.
"What we have is something quite unique and we are using the event in Cologne to show that to the world."
Political difficulties
Video-game development in Iran attracted global media attention in 2007 with the release of Special Operation 85: Hostage Rescue. The game saw two Iranian nuclear scientists kidnapped by Israel with players in the role of Iranian special forces sent to rescue them, while battling Israeli and American forces.
However Mr Borgheai said he doubted if it was a real game in its own right.
"We never heard about it in Iran," he said. "It certainly wasn't released there and the first I heard about it was through the international media," he said.
"If it was made then I would guess they just took an existing game and stuck a few textures and the like onto it; it certainly wasn't a new game."
The group said the event in Cologne had been a success and they would be back next year, but ruled out exhibiting at the E3 Expo in Los Angeles.
"It is difficult given the relations between Iran and the USA," said Mr Tarbyatjoui,.
"Certainly all of us here today will be at E3 next year, but there will not be a dedicated Iran stand such as you see in Cologne today."
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