VK restarts games – Newspaper Kommersant No. 3 (7448) of 01/11/2023

VK plans to invest about 300 million rubles in 2023. to Russian video game studios and launch educational programs at universities to train specialized personnel. Previously, the holding within My.Games, which was sold in 2022, invested more than 6 billion rubles in the creation of video games around the world. for four years. In the context of a budget deficit in the industry in the Russian Federation, strategic investors are needed, experts admit. But VK will focus on low-budget projects with a short development cycle, because it will be difficult to recoup high-budget games only at the expense of the Russian market.

“Kommersant” got acquainted with the VK presentation “Development of the gaming industry in 2023-2024”, which was presented at a meeting with representatives of the video game development industry, which was held at the Ministry of Digital Development on December 15. It follows from the documents that the holding plans to launch specialized educational programs at universities: HSE, VSU, ITMO, PSU, ISEU, MIREA, which will allow it to grow specialized specialists, and the VK Play division will invest about 300 million rubles in video game studios in 2023.

The interlocutor of Kommersant, who is familiar with the company’s plans, clarified that VK will focus on investing in projects that are at the prototype stage or at an early stage of development: “Studios that enter the VK perimeter will have special conditions for placing projects on the distribution platform VK Play and in the RuStore app store. VK declined to comment, Kommersant did not respond to the Ministry of Digital Development.

The holding began actively attracting the audience and developers to its VK Play platform in 2022. In fact, VK continues the strategy of My.Games, which the holding sold in September 2022 for $642 million to LETA Capital manager Alexander Chachava. In December, My.Games announced its withdrawal from the Russian market (see Kommersant dated December 15, 2022).

The My.Games Venture Capital (MGVC) investment fund has been actively investing in Russian and foreign game studios until 2022. Over four years, the company has already invested more than 6 billion rubles in total in the creation of video games, Vladimir Nikolsky, co-founder of My.Games, said in an interview with RBC in 2021. As of mid-2021, MGVC’s portfolio, according to its own data, included more than 40 studios, including those abroad. Then the company, according to InvestGame, was in the top 15 largest strategic investors in the video game industry in the world.

VK’s strategy is “understandable and productive” because there is a demand for video games on the Russian market, there are teams that can establish studios capable of developing a product in a few years, independent expert Vyacheslav Makarov believes: “Now we just need an investor who will give enough money” . At the same time, he adds, now Russian developers “are able to digest no more than $ 200-300 million in three years.”

The Russian video game market is in a unique situation, Artur Martirosov, Investment Director of Voskhod Management Company, believes: on the one hand, many foreign companies suspend sales of their games in the Russian Federation, and a number of studios left Russia, but at the same time, vendors remaining in the country received an influx of new personnel and are now working to fill the empty niches. “Now there are definitely investment opportunities in Russia, moreover, those teams that have remained and continue to work are likely to grow into local leaders in a few years,” he clarifies. The key issue when making an investment decision, according to him, will be the strategy and geography of the studio’s promotion, the possibility of buying traffic.

According to the top manager of a major Russian video game developer, the market is currently lacking strategic investors “who are ready for long-term investments, and at the same time do not expect a 300% payback.” Kommersant’s interlocutor, however, adds that investments in inexpensive projects with a short development cycle will be more attractive, since the development and release of an AAA project (high-budget, high-quality games) cannot be recouped by selling copies only on the Russian market. “An investment-attractive game should be inexpensive in terms of development,” he notes, “and it should also be a game-service (GaaS – Games as a service, a way to monetize games.— “b”), that is, to generate income not through the sale of copies, but through microtransactions of users within the product.

Nikita Korolev