In early February, VK Play announced the launch of the VK Play Investments division and plans to invest 300 million rubles through it in Russian gaming teams. We have sent the company a number of questions regarding the future work of the division. We share the answers we received.
Our questions were answered by Evgeny Polotnyanko, the head of VK Play Investments and the head of the Odnoklassniki social network gaming platform.
Alexander Semenov, Editor-in-Chief of App2Top: Zhenya, hello! Tell me, what is VK Play Investments? Is it a foundation, a separate company, an initiative?
Evgeny PolotnyankoEvgeny Polotnyanko, Head of VK Play Investments:
This is a new direction of VK, which is designed to help the gaming industry in Russia. This is not a fund in its classical sense, it is planned that it will be a set of initiatives – both to support teams in the Russian Federation and to support individual game projects. We plan to solve several tasks at once – both to support the domestic gaming industry and to provide VK with new high-quality content.
How many people work here, what is their background mainly?
Evgeny: The direction is new, so the staff will expand as the number of companies and projects with which we work increases. At the current stage, the team includes a producer, an investment manager and a business manager. The team can provide expert support by partners thanks to an extensive background in the gaming industry.
You are known as the head of the Odnoklassniki social network gaming platform. And you remain at the head of the platform. How do you manage to combine two positions at once?
Evgeny: Yes, indeed, I continue to manage the Odnoklassniki gaming platform, but on the contrary it helps – it allows you to look at new tasks with a broader view, use experience and resources to create new opportunities for developers. There are a lot of tasks and new challenges, but this only makes it more interesting!
Are there any employees of the foundation who will deal exclusively with it?
Evgeny: As I said, this is not a fund, but rather a set of initiatives, and, yes, the team I mentioned above will only work with VK Play Investments projects.
Given your experience in Odnoklassniki, isn’t there a conflict of interest here, shouldn’t we be afraid that HTML5 game developers will have preferences in receiving investments relative to other teams?
Evgeny: No, absolutely not. We have identified a number of parameters for priority investment opportunities and will be guided by them when making decisions. The parameters include certain genres, the current stage of project development, the experience and competencies of the development team, and others. If we see the prospects of the project, we will invest regardless of the platform.
Another personal question: why did they take you to the position? How do you formulate this for yourself?
Evgeny: I have been working in the Russian gaming industry since 2010, I know a lot of developers and I have a great idea of how the business works. I have been running a game studio for a long time and was looking for investments, so my experience is quite relevant for this position.
Is it possible to say that “VK Play Investments” have replaced MGVC?
Evgeny: We focus specifically on supporting Russian developers.
When deciding to launch the fund, most likely, research was conducted, some kind of analysis of the Russian game development. For sure, there were figures about its number (the number of LLC, indie teams, developers who decided to stay in the country). Accordingly, can you voice any of these figures?
Evgeny: We do have such data, but we do not disclose this information.
The size of the fund is 300 million. This is in the region of $4 million [we sent questions in February, at the time of publication we are already talking about $3.7 million]. Why exactly this amount? What are you starting from when deciding to form a fund of this size?
Evgeny: We start with this amount, and then, as VK Play Investments develops, we will review and expand the amount of available funds for investments. Now the budget really includes just such an amount, but in the case of good projects, we are considering increasing the volume of investments.
How many projects are VK Play Investments going to invest this money in?
Evgeny: We don’t have any restrictions. We plan to build on the needs of the teams and assess their prospects. As I have already said, we do not exclude the possibility of increasing the volume of investments.
How exactly will the money be distributed? There will be one or two favorites, and the rest of the money will go to small projects on a residual basis? Or will there be some kind of limit on the funds issued for each game?
Evgeny: Everything will depend on what the needs will be, but in any case we strive to have different niches and different genres.
What type of games will be preferred (genre, platform, type of monetization)? Or will there be some quotas for each direction (conditionally, we have to invest in three mobile hypercausals and two premium projects for Steam from indie developers)?
Evgeny: We are interested in ready-made projects for PC, mobile devices or consoles based on premium and free-duplex business models, projects under development with the potential to reach a wide audience, as well as projects with a prototype or an early version available for testing. At the same time, we strive for the maximum variety of formats and genres.
By today’s standards, $4 million is not much even for the development of one game (unless, of course, we are talking about indie and hyper—casual titles). Therefore, I would like to understand what, from your point of view, the funds issued should go to? Finalizing a project created in conditions of austerity / financing small start-up teams / creating a vertical slice to raise money for the next round?
Evgeny: We invest in the completion of promising projects, where there is no need for full investment, as well as the adaptation of existing projects on VK Play.
Will it be possible to get additional investments if the team does not have enough money previously received?
Yevgeny: Step-by-step financing presupposes this – we will move from point to point.
What KPIs should VK Play Investments achieve by the end of the year?
Evgeny: Our main task is to find the first promising studios and projects that we really believe in and conclude deals with them.
The press release mentions that games that have received investments can count on special conditions for publishing games in VK Play. What are these conditions?
Evgeny: Additional advertising inventory, separate promotion conditions and other activities that allow you to promote the product most quickly.
Will you demand exclusivity in terms of distribution in Russia and the CIS?
Evgeny: Basically, we will not require exclusivity, but we do not exclude such a scenario in certain cases and with an agreement with the studio.
What percentage of sales will you claim in Russia, what percentage when you launch the game abroad?
Evgeny: VK Play has a 5% commission, VK Play Investments does not claim an additional percentage of sales.
Will he apply for an IP or a share in the business (in the latter case, what kind of participation are we talking about)?
Evgeny: One of the possible models is the consolidation of talented Russian teams that have released commercially successful projects.
I see, thanks for the answers!