Interview with Nika Entertainment

Maxim Slobodyanyuk

Hello, Maxim! Please share the history of Nika Entertainment.

Our story is quite fascinating. In 2006, the now well-known outsourcing company iLogos was founded. At first, we worked only in the CIS, helping in the creation and operation of projects of companies such as Social Quantum, WebGames, Pixonic. 

A few years ago, it became cramped and boring for us in the post-Soviet space and we founded iLogos Europe in Hamburg. It is headed by Alexander Goldybin, ex-CEO Mail.ru Games Europe. At the moment, the company has completed more than 300 projects. We have worked with EA, Playdom, Disney Interactive, Wargaming, Peak Games, National Geographic, 6waves, FreshPlanet, YoudaGames, Xyrality and many others.

iLogos has become a springboard for us, it has given us confidence in our abilities and capabilities to realize future ambitions. Remember, there is a joke that every second tester dreams of becoming a game designer, but I have realized a long-standing dream of creating my own products. To avoid a conflict of interest between the grocery and service businesses, I had to leave the post of CEO of iLogos and found a new independent company, which I named after my daughter.

Nika Entertainment was given a powerful start by the takeover of the studio “AAA Games”, with its cross-platform social projects. I have organized a company that is noticeably different from the usual startups. Many things and processes that we are implementing in Nika Entertainment have been hatched in our heads for the last 3 years. 

What we dream about and define as a mission is the desire to give players the same childish feelings as from unwrapping a long-awaited New Year’s gift.

Your project “The Mysteries of Atlantis” shows good results in Odnoklassniki (DAU more than 500k). You have three match-3 games on your account. How and why did you come to this genre at all?

I’ll be honest: it was an experiment that ended with a solid four. It’s no secret that the market for social and mobile games is quite volatile. Genres, approaches, and leaders change each other. But in these processes, you can always catch trends and trends, and by identifying them, you can succeed. At the dawn of the rapid rise of Candy Crush Saga from King, we started working on a prototype game with match-3 mechanics, going deeper and deeper into our developments. The game was a failure at first, and we, as they say, began to “tune”. They tuned it until the game “shot” in VKontakte, then they were in the TOP 10 Classmates for a long time, now they are in the TOP 20 already, but the process of improvements and searches does not stop until now. Only the focus has shifted to Facebook and mobile platforms. 

“The Mysteries of Atlantis” (aka Atlantis Adventure)

In fact, things are going much better on Facebook and in Japan now than in Russia. For example, in Japan, our social version immediately got into the TOP 10 and became the standard of the puzzle genre: even the logo of the “Mysteries of Atlantis” was used as an icon of the “three-in-a-row” section. And on Facebook, for example, over the past month we have more than 1 million MAU.

Social Quantum helped us successfully launch the project, which was aware of the specifics of the platforms, had the contacts, traffic, and monetization knowledge we needed.

By the way, for the last year and a half we have been hearing experts moaning about the demise of match-3 as a genre, the lack of prospects for developers, player fatigue, and so on. Perhaps they are right, and it’s too late to start if you haven’t been in the process of developing such an arcade for the last six months or a year. It is enough to look at the ratio of unsuccessful attempts and brilliant examples, such as “Indie Cat” and “Pirate Treasures” only in the Russian-speaking market. It will be quite difficult for beginners to win the loyalty of players who are up to their ears in existing projects (this includes both gameplay and monetization). The cost of creating a game is constantly growing due to the increase in market barriers: quality, features, etc., which significantly delays the implementation time, which is why you can simply not have time… But there are things you can’t turn a blind eye to. Players, especially women over 25, love puzzles, and among puzzles they prefer three-in-a-row.

Some time ago, there was a debate in the game development community about the role of the publisher, in particular, in the mobile market. Based on your own experience, how important is the role of the publisher today?

If this is your first free-to-play game – definitely nowhere without a publisher now. If you want to gain experience, expertise, and other sacred knowledge about the state of the market, it is better to launch the first product with the support of professionals (publishers). The price of time and error is higher and higher every day. Of course, if you have an extra 200-500 thousand dollars, you can try to get bumps in different markets.

There are many talented people and their associations, they know how to game design, draw and code. But I have a few aspects for them to think about before the self-release of the first game. Will they be able to successfully pull the following: knowledge of platforms, support and community, testing and playtests of products and releases, in-game texts, their localization and culturalization (if we go, for example, to Asia), analytics, PR, servers and their support, integration, and then only marketing with knowledge of markets and traffic-providers?

And this is not to mention the need for game development, constant updating of content, new functionality, promotions, and so on, with which you will always be supported, at least with advice, by a sensible publisher. Therefore, it is difficult to talk about self-publishing without the existing infrastructure with well-established effective processes at least on the first project.

Of course, nothing is impossible nowadays, we ourselves are in the process of becoming an independent publisher, but for now we are being cautious. It will become more and more difficult to publish independently every month, so we have become more critical of this. There are more and more marketing channels, the choice of effective ones for each specific product requires experience. Searches without experience are very expensive, so we are glad to have specialized specialists with experience in publishing houses. To do this, we have specially opened an office in Moscow, where we want to focus not only publishing, but also producing and game design of our products.

Let’s model the situation for our readers. You are releasing your brilliant game on iOS. The chance of being noticed and getting into Featured is less than beating the casino. After the release, you will get to the 600-700 place and you are unlikely to get more than a couple of hundred installations in a month if you do not buy traffic, and then even less. But suppose you still have a couple thousand dollars to buy the first users. Will you be able to spend this money correctly in order to buy as cheap as possible the highest quality users? Will these users pay you? And in the end, will you be able to recapture the costs and start earning, or will your game end up in the cemetery of applications, where there are already quite a lot of projects, including original ones, deserving of a better fate?

And then it will most likely be too late to go to the publisher, since they are suspicious of teams whose products have already been released and have not paid off. At the same time, the project can be simply magnificent, your spouse is delighted with the graphics, and the accountant buys boosters for real money. If you have no experience and devilish luck, sooner or later, but you will find yourself with the publisher. The main thing is that it turns out to be correct.

The other day you announced a change in the investment model. As we understand, you have announced the search for investors. And how was the company funded before?

Our companies Nika Entertainment and iLogos have always provided and are providing their own development: without spending more than they earn. Previously, we did not use any borrowed or other capital. This is our first experience and decision to “get” a partner.

Why does a successful company need third-party investment? What is the reason for this decision?

Everything is connected with the pace, the number of platforms and projects, and the ambitions of our team as a whole. For the international, mobile market, rather large investments in marketing are needed. You can spend what you earn yourself and achieve success, but at the same time time is lost. Too much value in our industry.

Do you already have some amount that you are focusing on, how much do you estimate for yourself?

Of course there is! But that’s what it is, we can’t say before the “deal”.

I understand that you just reported about investing, but I can’t resist asking: is it difficult to find investors in a gaming company today?

More than a billion people play online and mobile apps. The market brings developers and publishers tens of billions of dollars annually and is constantly growing: by 2016, its volume promises to exceed $80 billion and, in general, it is predicted that the game industry will overtake the film industry. This gives investors increased attention to the creators of games, but you need to understand that these people are businessmen, and attention does not mean investment. At the moment, we are negotiating with several potential core and non-core investors. I cannot say that they were very difficult to find. Who is looking for – he will always find!

What is usually asked to show/tell?

Professionals are interested in financial indicators, market analysis, business model, team, assets, rights protection, legal structure of the business, metrics, trends and much more that is not visible to players behind art, genre, gameplay and other features, which, of course, are important, but mostly only to our players and us by ourselves.

I would also like to ask about the “Mysteries of Atlantis”. On Facebook, the game is doing well, its DAU is more than 250 thousand. But with the mobile version, things are fine only with the Russian version. What do you associate this with?

Our publishers, like many people from the CIS, always run everything first on the Russian market. We have achieved good metrics, after analysis and live testing in the Russian-speaking segment, fixes and tuning of the game, we are ready to break into the tops of the AppStore USA and other countries so that the publisher can confidently invest in a more paying segment of the audience. These markets are more saturated with competitors, in them the cost of attracting a user can reach tens of dollars, so there is no room for error.

What can we expect from Nika Entertainment in 2014?

Projects, success and development, God grant. The rise of the “Mysteries of Atlantis”. Independent launch of the projects “Zombie Ranch” and “Feathered History” already popular in Odnoklassniki, VKontakte and My World on international markets and mobile platforms. We are “live” testing and editing a beautiful clicker project “Mafia”, in which we see great potential from a foreign audience. We are also preparing for the release of a midcore project with new mechanics and cool art. I’m really looking forward to this game. In general, this is just the beginning!

And the last question: what are you playing now?

I used to love playing strategy and taikuns – “Cossacks”, “Age of Empires”, “RollerCoaster Tycoon”. Now I’m saving time on such entertainments. If I play, I mostly play our company’s projects or watch competitors’ products. I prefer to spend the rest of my free time with my family.

Thanks for the interview!