Blue Guru Games has been created through a collaboration with the LeoVegas Mobile Gaming Group and LeoVentures; LeoVegas will own 85% of the shares.
The new studio will be run by a team which has more than 20 years of experience in game development, while LeoVegas will be close at hand to offer support.
Blue Guru Games will be able to develop games for LeoVegas' brands as well as contribute to other game operators; the company hopes the studio will be able to produce at least 20 games in the next two years.
Group CEO of LeoVegas, Gustaf Hagman, said: “For a long time we have created exclusive games with the help of external providers, but now the time is right to take the step to do game development entirely on our own.
"Drawing from our data and casino knowledge we will be able to drive innovation and create games that our customers truly enjoy. These may be everything from niche, local games for individual markets to broad international games.
"In addition, we will create games and unique characters that can be used in our marketing, which will build stronger loyalty to our brands. Having great flexibility in producing games is a competitive advantage, and it will also give us a new revenue stream over time."
The first games created by Blue Guru Games are expected to be released by the end of 2021.
When exclusively speaking to Gambling Insider earlier this year, Hagman admitted becoming a B2B company could be a possibility for LeoVegas.
