About the situation in Green Grey, salaries of Russian developers and gray schemes for transferring money to the country — in an interview with Sergey Belyaev, co-founder of the Infusion Games studio.
Sergey Belyaev
Alexander Semenov, Editor-in-Chief App2Top.ru : Let’s put all the dots on i. Infusion Games studio was one of the companies in which Green Grey invested a year earlier. This summer, rumors began to spread that Green Grey was “everything”, and the studios “went around the world”. Do I understand correctly that this is, to put it mildly, not so?
Sergey Belyaev, co-founder of Infusion Games: That’s right. The Green Grey Investment Fund invested in our studio last year. In addition, he made several more deals in different studios and startups.
If we talk about rumors, then the word “soft” sounds too soft here. Sorry for the tautology.
Here it is worth starting with basic introductory. Green Grey has several main business areas: publishing, in-house development and investment. There are others, but Dima Morozov, the founder of Green Grey, will tell you about them better, and they have nothing to do with rumors.
Of all the companies in which Dima’s fund invested, at the time of the May events, which Forbes wrote about, only one was under threat of closure and cuts — the youngest and 100% based in Russia. And, as far as I know, she continues her activities, the development of her projects is still underway.
If no one has closed, then where did the rumors come from? You were CTO Green Grey at that moment and probably aware of the situation.
Sergey: After the February events, all gaming companies that had at least some relation to Russia suffered to one degree or another. The situation has also affected the investment direction of Green Grey. His bank accounts were blocked, so it could no longer continue to fulfill its obligations.
It happened very unexpectedly.
These news were announced to the studios, it was said that the direction could not finance their work further. Also, the owners were asked to think about ways out of the current situation and come back with suggestions for discussions.
As far as I know, only one of the studios, the one I mentioned earlier, announced that it does not intend to continue its activities, will close and dismiss its employees. The rest reported that they will continue their work on projects and plan to release.
As for the internal development of Green Grey, it continues its work. But, of course, the priorities for the projects shifted, a number of plans had to be changed.
For example, an outsourcing studio worked on the flagship project. Since March, it has become almost impossible to continue to cooperate with her due to problems related to banking restrictions. As a result, employees were transferred to the flagship from another project, which led to a temporary freeze of the latter.
Mass hiring also had to be stopped. This led to a revision of the scaling of a number of areas — QA department, Backend platform, R&D.
But there were no mass cuts. Only a few people have left in six months. And even then on their own (because of the changes, there is no full-fledged work left for them).
With Green Grey, everything is clear. And in what position was Infusion Games? How did the situation with the loss of funding affect her?
Sergey: It was difficult in the spring. We had to postpone the start of the development of a new project and completely stop hiring new employees for a short time.
But by now we have closed several small rounds of investments and unfreezed hiring. Today we are not just quietly working, but also actively hiring people.
Where are you now, and where is the team?
Sergey: Personally, I and another founder, Nikolai Shubin, are in Turkey.
As for the team, we have it scattered all over the world — from Spain to India.
After February, it became impossible to develop a European company while physically in Russia. Alas.
Most of the team you get is no longer in Russia. Is it because of ideological reasons?
Sergey: It’s not just about ideology. The traditional scheme for the Russian game developer “we develop for rubles — we sell for dollars” no longer works.
What’s wrong with her?
Sergey: There used to be quite cheap shots in Russia. After a significant strengthening of the ruble, the cost of employees in the currency turned out to be greatly overestimated.
Overheating of wages in the labor market last year and so led to a situation that it became more profitable to look for and hire people in Europe. Now, against the background of the high exchange rate of the ruble to the dollar, it makes no sense for companies to keep employees in Russia at all, because they are many times more expensive than in the West.
Given the difficulties with transferring money to Russia, as well as reputational risks, the scheme collapses completely.
It is not surprising that gaming companies began to leave Russia en masse. It is impossible to invest in them from abroad, you just can’t transfer money to salaries, and salaries themselves have turned from small to gigantic.
You say that money cannot be transferred to Russia. But what about the schemes providing for the registration of a company in Armenia, the UAE, as well as Uzbekistan or Kazakhstan? From these countries, it seems, while transfers to Russia are calmly going on, as well as from Turkey.
Sergei: As always, there are a lot of “couch analysts” telling that all this is easily done.
But when you start to personally try to do all this, you face a huge number of problems.
For example, to open a company anywhere in the world is really still not difficult and does not take much time. However, opening a bank account for this company is a serious problem if you only have a Russian passport.
I have no doubt that there are successful cases, and after February someone managed to do it. But it is important to understand: most likely, in each case it required a huge amount of effort and resources.
All successful cases known to me were carried out either with the passports of other states (as an option, a residence permit), or with the help of “gray schemes” and nominee directors, or with the presence of companies opened there even before the “events”.
Among other things, the most important point is being missed: today, in order to deliver finances from point “A” to point “B” (Russia), you still need to spend a lot of money. Sometimes tens of percent of the amount delivered. As a result, the question arises: is it worth going to such costs at all?
But after all, many Russian studios continue to work, pay money to employees. How is this possible?
Sergey: There are many reasons for this. There are good ones, and there are not so good ones.
Some studios have a well-developed structure from a legal point of view. Simply put, they have the opportunity to bring money to Russia through their daughters in other countries.
Some companies can afford to make money by resorting to “gray schemes”. But it has a price — a high percentage.
Some companies still have income in rubles. This, for example, concerns outsourcing and those companies whose products are focused on the domestic market.
Someone has pre-received investments in their accounts and can continue development in full.
Someone is under the wing of giants like VK.
However, most of the studios located in Russia continue to work on a residual basis. Their management hopes to find investments and finish the projects already started. Employees in such companies often do not even suspect that there is enough money in the accounts for another 1-2 months, and then everyone will be fired.
As a rule, they do not find investments. Every week someone closes down and more and more developers find themselves unemployed.
That is, in your opinion, a significant part of the Russian gaming IT, which does not earn in Russia, or while living on a “pillow”, or works according to “gray schemes”?
Sergey: For the most part, yes. Obviously, there are exceptions. Some readers may be outraged, they say, this is not the case for them, but it’s still not about special cases, but about a trend common to the industry.
Now everyone is trying to survive. Unfortunately, few people do it. As a rule, those companies that enter the crisis management mode faster and most proficiently and adapt faster than competitors remain afloat.
You just mentioned a couple of times that some companies resort to “gray schemes”. Can you tell us about the most popular ones?
Sergei: As they say, money loves silence. No one will publicly advertise their “gray schemes”. So I can only voice what I have heard from colleagues.
It is important: we ourselves do not resort to “gray schemes”, do not violate the legislation of any country, and also do not violate the sanctions requirements for companies in any way. We simply don’t need it.
The most popular scheme in the first months, while nothing was clear at all, and the financial flows of companies stopped abruptly and it was necessary to come up with something, was a “factory” of money through “fraternal states”. It worked like this: companies paid an intermediary from the European Union, and the intermediary already transferred money to Russia. The commission for such schemes in the first months reached up to 20%.
I heard that now it has become cheaper, but is it more affordable…
I also often heard suggestions to switch to the crypt and pay in general “in the black”. Apparently, this is also a very popular scheme.
Any of these schemes can end very badly for both founders and companies, so I do not recommend resorting to them.
Suppose that the “gray schemes” will cover, the “pillow” will end. What will happen to game development in Russia then?
Sergei: It seems to me that the answer is obvious and follows from the question itself. Moreover, what is happening to him can already be seen by the number of responses to vacancies.
For example: a year ago, in three months we managed to find only about 50 candidates for the position of 2D artist. Everyone had huge salary expectations.
This summer we have opened several more vacancies for this position. Within a month, almost 1,000 people responded to them with much lower salary expectations.
The situation is the same with other positions.
At the same time, the number of vacancies themselves is tens (if not hundreds) times less than a year ago.
It’s all very sad and I, as an ordinary person, would not like this to happen in my native country at all, but the situation is like this, and it needs to be accepted.
My forecast for the coming months is very negative: the remaining studios in Russia will soon finally run out of money and they will be forced to close.
You said a little earlier that Russian developers are more expensive than Western ones today. How is that at all? It is clear that the ruble is strong, that the market has been heated, but not to the same extent.
Sergey: No, Sasha, it’s up to this.
Look, a year ago, Unity-Senior-level developers turned up their noses at offers of 350 thousand rubles on their hands, demanded more.
It’s not even worth talking about the social package: give everyone a subscription to a Michelin restaurant and a Thai masseuse to the workplace. A joke, of course, but the meaning, I think, is clear.
Taking into account all taxes, deductions and other expenses, the employee could come out, roughly speaking, at least 700 thousand rubles.
When they began to give 52 rubles for a dollar, it suddenly turned out that such a specialist costs $ 13,500 a month. This is beyond the competition with any Western specialist..
And on the international market they are not worth the money that until recently they were willing to pay for them in Russia?
Sergey: Yes, that’s right.
Those who understand the situation have already reduced their requests to quite market ones, and were able to find a job in such an unstable period.
I know those who have relocated, also greatly reducing salary expectations relative to the past. The paradox is that they began to live much better than before.
But not everyone understands this.
Sergey: Far from everything yet.
We interviewed a lot of people who have not been able to find a job for three months, but at the same time do not want to lower their salary expectations.
Now it is especially difficult for “junas” and “midlams”.
The first came to game dev after hearing about huge salaries in the industry at various courses. We are still faced with “junes” who ask for 120 thousand on hand (at today’s exchange rate, this is, by the way, $ 2000). Will they find a job? I don’t think.
As for the “middles”, the “seniors” began to agree to their salary today. The latter literally flooded the labor market.
By the way, you have the most distributed team. How much has their comfort level changed after leaving Russia abroad?
Sergey: It’s sad to say this, but he has grown very much. Prices in Russia are rising, wages are falling, and the quality of products is only getting worse. There is no such thing here.
For example, I live in a very expensive place in Turkey. Even here, a very tight lunch in an institution for two costs a maximum of 1000-1500 rubles.
The last question is about the payment of wages in the crypt. How many gaming companies that have left Russia are implementing this practice? And are the developers ready for this?
Sergey: It is important to understand that, in general, few gaming companies in the world can legally operate with crypto.
As for Russia, it is officially impossible to start a crypt in an LLC with us. Legal entities are prohibited from operating on it.
At the same time, the developers, as far as I know, are ready to accept payment in the crypt. However, not from a good life. Given that there are fewer and fewer jobs in the country, they often simply have no choice.