Iran was previously known as Persia to the Western world. Iran/Persia has an ancient history stretching back millennia. In the game industry, Persia is perhaps best known for being the main setting of the Prince of Persia franchise.
In modern times, Iran has went through several political upheavals. It went from a Persian monarchy, to a modern fledgling democracy, which was then overthrown with the help of the CIA and replaced by a monarchic dictatorship, which in turn was overthrown by the 1979 Iranian Revolution and replaced by a theocracy. The current Iranian president Hassan Rouhani has been taking steps towards a transition to democracy.
The derivative low-budget games Garshasp: The Monster Slayer and Garshasp: Temple of the Dragon, were developed by the Iranian studio Fanafzar Game Studios. Trade restrictions prevented them from using anything but free software for the development of the games.
Iran's greatest contribution to the video game industry is perhaps the programmer Nasir Gebelli, who moved to the US and founded Sirius Software and Gebelli Software in the early 80's, pushing the Apple II to its limits, before moving to Japan and working with Squaresoft, where he programmed games like the early Final Fantasy titles and Secret of Mana. Famous designers such as Hironobu Sakaguchi (known for RPG's like Final Fantasy) and John Romero (known for first-person shooters like Wolfenstein 3D and Doom) credited Nasir Gebelli as a major influence on their careers as game designers.