We continue to summarize the results of 2023 together with the game teams. Next up is an interview with Sergey Efremov, Chief Operating Officer of Astrum Entertainment.
What was the year like for the company? What have you done that I would like to highlight in terms of achievements?
The year 2023 was a landmark year for Astrum Ent. The company separated from the MY.GAMES business, was separated into a separate independent company and began to actively develop independently. Astrum Entertainment's portfolio was replenished with new products in 2023 and now has a total of dozens of popular games in Russia: Atomic Heart, Warface, Battle Teams 2, ArcheAge, LOST ARK, Perfect World, Allods Online and many others.
Our loudest release of the year was the Atomic Heart game, which we publish in Russia and the CIS countries. At the end of the year, we presented a new product — PvPvE shooter Xtract.
How has the market changed for game publishers?
The market has changed dramatically over the past two years. There was a mass exodus of large foreign publishers and large international companies from the country. The market was in crisis from the point of view of the games themselves and those who develop and publish these games. It has become difficult for a Russian developer or publisher to enter the Western market, and for Russian players to purchase games in Western digital stores.
In 2023, the market was actively reformatted and adapted to new conditions. Now we can say that several major Russian publishers and developers have strengthened their positions on it, as well as distribution platforms have developed rapidly.
Russia is still a major market for gaming companies, both local and foreign. There are more player users and their number is only growing. Russian gamers are ready to buy games and make in-game purchases.
In addition, the online gaming and esports market continued to develop in 2023, despite the departure of foreign sponsors and tournament organizers. Numerous tournaments with thousands of participants and millions of spectators are held in the country. For example, more than 2,000 players participated in the last Warface PRO esports tournament.
Despite the positive dynamics, the gaming industry in Russia is also facing some problems. For example, there is a lack of funding for startups and independent developers. But this is a global problem — according to InvestGame, in the first quarter of 2023, the volume of gaming transactions fell by more than 10 times. The volume of external investments in the Russian market has also decreased: the cost of game development increases from year to year, and the costs of marketing and product promotion also increase. Because of this, the pace of release of large products that are more interested in players is slowing down.
At the same time, the quality of new products is growing — video games are fighting with other leisure activities for the user's attention, and modern gamers place high demands on products. All this leads to healthy competition between game publishers.
In terms of investments in game development, there are also positive factors — in Russia, the state actively allocates grants for the creation of new games. This helps publishers to get new high-quality products. For example, the game "Smuta", expected in 2024, was developed with the involvement of a grant from the ANO IRI. At the same time, it is important to understand that grants from the state require a sufficient amount of time to prepare a significant amount of accounting documentation.
Of course, the development of our own Russian digital distribution platforms, where players can easily and quickly install games: VK Play, Ru Store, Yandex Games, has a positive effect on the market recovery. In 2023, Russian publishers integrated even more tightly into local platforms, where the bulk of the audience of Russian gamers moved. At the same time, a small part of the players still use foreign platforms (for example, Steam), although they have difficulties paying for purchases. That is, the market has not yet fully transformed and the process of localization of platforms will continue.
Russian publishers began to work even more closely with South Korea and China. Several meetings have already been held at the level of professional associations, where measures to develop the import and export of games were discussed. In particular, the development of standards, participation in developer events, etc. Astrum Ent, which has many years of experience in localization and operation of the Asian Games, is actively considering the introduction of new products from Korea and China to the Russian market.
Has the practice of working with developers changed, perhaps the developers themselves, their requirements, desires, and the level of proposed projects have somehow changed?
There are a lot of qualified and talented developers in Russia now.
Nevertheless, independent developers are currently experiencing a number of difficulties. We have already mentioned the weak investment market, which does not allow us to develop large AAA-level projects. In addition, developers are experiencing difficulties with the distribution of their games. It is quite difficult to recoup the costs of developing large projects only within the Russian market. Therefore, developers are trying to distribute their game to foreign markets, and there are a number of difficulties with this. Russian developers cannot directly upload projects to a number of foreign stores, for example, on Steam, and also cannot make profits from global platforms such as Google Play, App Store.
At the same time, cooperation with foreign publishers in Asian countries is actively developing, for example, in South Korea and China, as well as in Brazil and a number of other countries. But there is still no well-established distribution system for Russian games in these regions, and there are only isolated examples of successful release of Russian games in these markets.
In addition, developers are experiencing difficulties with the software. In Russia, the usual software for both development and management has already become or is gradually becoming unavailable, but companies are adapting and switching to Russian software analogues.
What are the company's plans for next year?
Next year, we plan to strengthen in a number of areas, including expanding our portfolio with new licenses, working with international partners (especially Asia), as well as publishing mobile projects. Of course, we will increase our own development. We are currently developing Warface, Xtract, Allods Online and the game Legend: Legacy of Dragons.
We are ready to consider a variety of formats of interaction and joint development with other companies: we are ready to share the expertise of publishing and localization of products on the Russian market, we are ready to consider publishing games from third-party studios, investing in new products, as well as M&A.
In addition, we are looking with interest at foreign markets — South Korean, BRICS countries. Asian developers' projects are traditionally popular in Russia. We are not ready to share specific plans for the games yet, but we definitely see a great potential for importing and exporting games with these countries. Right now we are in the process of signing contracts for the publication of several Asian Games in Russia.
Standardization and development of import-export relations with our Asian partners is a big task for the entire industry. We are actively working in this direction within the framework of the association A PRIORI.