Rostelecom invests in independent video game developers

Rostelecom Company (MOEX: RTKM) together with the Indie Go accelerator is creating a fund to support independent video game developers. At the initial stage it is planned to invest 300 million rubles. and support 15 projects by the end of the year. The very creation of the fund will allow attracting the attention of non-core investors to the industry, and developers will receive additional promotion, market participants believe. At the same time, Kommersant’s interlocutors doubt that Rostelecom will quickly recoup its investment due to the specific nature of indie projects.

PJSC Rostelecom and the educational accelerator Indie Go are launching a fund to support small video game developers - Indie Go Start, three interlocutors in the media market told Kommersant and confirmed by Rostelecom representative and managing partner of the fund Vladimir Varenik. According to the latter, Rostelecom, through the fund, plans to invest up to 300 million rubles in developers at the initial stage: “Next, a decision will be made on scaling.” Only by the end of the year it is planned to support 15 games, he clarifies.

Investments will be allocated to developers according to the milestone model (in stages), says Vladimir Varenik: “If the fund invests only in development, we get back 50% of the proceeds from the project, if in promotion, then about 30%.”

So far, Indie Go Start is considering investments only in console and computer games, Mr. Varenik clarified: “Mobile games require large investments in marketing.” On the part of Rostelecom, the new fund will be represented by the director of new digital products of the company, Andrey Kushnarev, clarified Vladimir Varenik. Rostelecom declined to comment further.

Invest about 300 million rubles in video game studios. last year VK planned (see. “Kommersant” dated January 11, 2023). The holding also considered launching educational programs at universities to train specialized personnel. Until 2022, the My.Games Venture Capital investment fund actively invested in Russian and foreign game studios. Over four years, the company has invested a total of more than 6 billion rubles in the creation of video games.

The Indie Go Start fund may be useful to other non-core investors who have been eyeing this business for the last two years, says Vasily Ovchinnikov, head of the Video Game Industry Development Organization. At the same time, the infrastructure of the fund’s strategic partner, Rostelecom, has both a gaming tariff and a game store that can help projects promote, he believes.

The developers of indie games themselves help promote the industry, says Kommersant’s interlocutor on the video game market. These projects are allowed to experiment with genres by their low cost, small teams and high production rates, he clarified: “If we assume that Indie Go Start will spend 300 million rubles. for more than 15 projects, then on average one will cost about $200 thousand, which is already a solid budget not only for the indie segment.” At the same time, the likelihood of a return on investment in such a volume from indie projects is extremely low, Kommersant’s interlocutor believes. This is due to the fact that the segment’s projects themselves are niche; sales of about 30–50 thousand copies of a game are already considered a success, he clarifies: “Hits are sold in copies of several thousand compared to millions and tens of millions for AAA games, and in order to recapture an investment of $200 thousand with a 50% share requires either great expertise or great luck.”

Yulia Yurasova