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1C's games boss Nikolay Baryshnikov

Thu 30 Sep 2010 7:00am GMT / 3:00am EDT / 12:00am PDT
Emerging MarketsPublishing

The Russian gaming giant on a challenging market and the importance of niches

1C Company is perhaps the dominant force in Russian gaming: a developer, a publisher, a localiser and even owner of a 280-store retail chain. Its success has regularly crept beyond Russia and the CIS countries' borders, however - breaking through with revered flight sim IL-2 Sturmovik and its sequels, and carving out a decent niche on PC with strategy titles such as Men of War and King's Bounty.

With console availability relatively new to Russia, console development is perhaps in its infancy there. 1C is gradually moving beyond its PC roots though, making 360 forays with Captain Blood and IL-2 Sturmovik: Birds of Prey - but it does so in tough times for retail gaming. GamesIndustry.biz recently talked to 1C's head of gaming Nikolay Baryshnikov about the challenges the industry faces, the strategies it's pursuing to survive, and the Russian government's attitude to gaming.

Q: I'm hearing that the Russian government is looking to support the local games industry - has any of that filtered down to you?

Nikolay Baryshnikov: I'm not that involved. I know that in general there's some movement, that the president said we have to support high-tech IP. I know that there's some initiative that basically government understand the games have become media and a lot of people can be targeted with this media, as with TV and cinema. They're doing things in TV and movies, but they're not doing anything in games. So I've heard there's some idea that government should support local development, blah blah blah. There have been some discussion in the press, but I'm not sure there have been any real steps, that anybody has said 'take this million dollars,' make this great pro-Russian gaming. I haven't heard any single story that that's actually happened.

Q: Would you welcome it for 1C, though?

Nikolay Baryshnikov: Obviously. Our market is not big enough to support full development cycle just for local sales. Most of the Russian developers are predominantly on PC and even international market is not performing well enough to recoup high budget PC games. So any help that we can get from the government in terms of funding or tax breaks etcetera, obviously we would want it.

Q: Which is preferable for you – the funding or tax breaks that could lure experienced developers from other countries over here?

Nikolay Baryshnikov: I think that the idea is the government... how I hear it is that we should produce triple-A titles, properly international titles that would be based in our kind of culture. We have to introduce some facts the way that we see them. But is has to be of the quality level for international games. So I don't think the government's interested in wasting a million dollars on D-class titles that nobody wants to play.

Q: Could Russian games – or 1C games – get to that kind of level without any government assistance?

Nikolay Baryshnikov: [Long pause]. It would reduce a lot of commercial risk, I'm sure. At the moment it's more a buyer's market than a seller's market, so for example I would like to make, I don't know, Men of War 5. But now I would rather... instead of risking everything making the game, and finding out in two year's time that nobody plays strategy games anymore, nobody plays PC games any more, or nobody's interested in, I don't know, Afghanistan or something. I would rather meet some advice or better funding from the international publishing, yeah. I will sell you game and it prompts a great idea. Or my government say, we'll contribute 50 per cent of the budget. And then okay, our commercial risk is much lower, we'll do X amounts of units in Russia, we'll do X amount in France.

Q: Do you feel you have to move away now from things like strategy titles and into more potentially mainstream games like your hack'n'slash title Captain Blood?

Nikolay Baryshnikov: It's a good question. Moving to multiplatform development can open bigger market, but then I think the industry is in such state now that it's almost impossible to make money even on a good game. Because marketing budgets are tens of millions dollars, consumers are expecting that they're going to pay $40 or $60 and get amazing things. Hundred hours of gameplay, tens of thousands of hours of DVD footage, super multiplayer, this and this and this. If we did this it would be, I don't know, $200 million... If we produce something of great quality but it lacks this component or that component, then press says, 'oh, 85. I played the game, it's kind of nice, but it has no video or any of this shit'. And consumer says 'it doesn't have multiplayer, I'm not going to buy it.' So it's catch 22.

Q: How can you fight that kind of problem – when you've got something like Red Dead Redemption stealing all the air in the room, as Remedy put it?

Nikolay Baryshnikov: There are lot of industries that are competing for our time, which is our most important resource. So you might have 3 or 4 hours a day of free time, and you could play social game, buy iPad, go out with girlfriend to café... Time is precious. I think there was a time when there was less entertainment, so you had millions of people spending five hours a day playing a game. Now they have lots of tempting offers – fly to Germany for just £9.99, buy iPad, play this free-to-play game...

Q: What is 1C's response to that?

Nikolay Baryshnikov: [Pause]. We've been successful in niches, and I think that's a good way for us to go. Try to find a niche like we did with IL2 [Sturmovik] or Rig'n'Roll or Men Of War, and try to number 1, 2 or 3 – the top three in the niche. Not compete with hundred million dollar development, with Call of Duty 7 – but make the best game and target it at much smaller groups of fans. We have developed a couple of highly accepted IP so far, like King's Bounty, Men of War. I think it would be a good idea to continue development. We'll have a spin-off where we are actually developing King's Bounty massive multiplayer game, maybe one day we'll take it onto consoles and maybe to iPad. We managed to achieve something and we have some loyal fans that might be interested in buying few more products which are out there.

Q: How closely are you going to stick to those established brands now? Have you reached the point where it's too risky to introduce new ones?

Nikolay Baryshnikov: We'll still experiment bringing new ones. We'll not bring, you know, ten completely new titles a year, obviously, because one day we only had IL-2, then we had Soldiers [Heroes of World War II] and then [gestures widely with hands.] We will maybe try to have one new IP a year, but every year it's getting harder and harder and harder to come up with a property that would be an interesting proposition. Unless you put millions of dollars in marketing in. It's very sad that current market isn't only about games- almost any consumer product, it's about marketing money. The quality of product is not the main decision for the consumer. It's in all the channels, my friend's brought it, I have to buy it... That's crazy, how we have to compete not against great ideas, great graphics, great storyline but against spent money.

Q: That's true for everyone, however. Even Activision's most recent financials revealed almost all their money comes from just two games – Call of Duty and World Of Warcraft. They can't seem to get consumers' attention for their other titles.

Nikolay Baryshnikov: We are still in risky zone, on one hand yes we make great games and we can make innovative games because it costs a bit less money than America. But then the market is less accepting new things. My biggest fear is actually it's a problem of time. That our lives our changing, that we talk and talk and talk when there are important things to do, there's not enough for specific entertainment the way we are working.

Q: Some people think that's the reason for the rise of social games – not because they appeal to a new audience, but because they only require a few minutes to play.

Nikolay Baryshnikov: I think for me social games are little bit like another platform. At one point there was SNES and Megadrive, and then there's an Xbox... I think it's just another platform. I think those games are young, we'll see more sophisticated games in some years' time. To me social games look like the industry would have in the late 80s, early 90s, simple games... In fact, the majority of those games are actually stolen from the old titles. It's another platform, competing for time - somebody's going to play iPhone, somebody's going to play Xbox, somebody's going to play Facebook. I'm waiting with great expectation for Civilization on Facebook, because I believe this could be one of the few first games that will actually show there is more complex gameplay than putting something on your farm.

Q: Where are the decisions made in 1C? Do the shareholders mandate that you must pursue high-end titles, or niche-titles, or is it more collaborative?

Nikolay Baryshnikov: It's hard to say. Basically, we are a privately held company, which basically means that we have to be profitable, so we need to pay salaries, have enough money in the bank, support our business. We need to present an idea, say we're going to spend $100 and it's going to make $200, and will take x amount of time... If we present something and say the risks are mitigated by that, the projected profits are like this, the extra problems are like this but we're in the black, shareholders say 'well, we trust you as managers to work in business, it looks like reasonable plan, we'll do it.'

If we say 'oh, we have unproven concept, great idea, we have no idea how it's going to work', then probably it will be much harder. So it's more like in any other company.

Q: Do you still get projects shot down, or are you too aware of what does and doesn't work now?

Nikolay Baryshnikov: I might sound stupid but my honest belief is that, in the games industry, nobody has a clue, why that product is successful and that product is a failure. You can do everything right, you can have a proven IP, you can have a great marketing budget, a great game – but nobody buys it. Or you can have a game which the press say is worst game ever, has 10 per cent rating and sells like hundreds of thousands of units, day one.

Yeah, we try to analyse our sales and successes, we try to get what are the trends... That's one of the things of the games industry, we have to make the game now but it sells in two or three years' time. So that's the problem.

Q: How much do you feel you're up against a perception that Russian and CIS games are a bit different – odder, rougher?

Nikolay Baryshnikov: I believe that 80 to 90 per cent of gamers, they don't really care where the game was developed, who was the developer etcetera. To me, like a consumer of yogurts or movies... you ask me who was the director of that movie, I have no clue. Whether that was the same studio as Universal Studios or Warner Brothers... Except maybe movies like Star Wars, the Matrix, when it's so highly-marketed that everybody knows that this is the producer, this is the director. So I feel that most gamers, they want gameplay, they want experience, they're not people will say 'oh, made in Russia!'

That's one thing, nobody cares. Then whether our games are different... I agree that our games are different, they tend to be a bit more complex and the difficulty level is higher. So I have a big internal battle, I'm always trying to tell the producers 'make it easier, make it easier, make it easier.' But these studios when they make these games, they play these games, maybe they make them for a number of years, they think 'oh, it's so easy, maybe we should make it more complex.' So I think that is eternal problem. But the industry is young, not many studios have proper staff or experience. It's problems of being young.

Q: Have you and your developers had to give up some of their ideas and wildness as they've matured and looked more to the West?

Nikolay Baryshnikov: We have to be safe, so that's why we have sequel and sequel and sequel, but we're still making pretty much new IPs and new games. Even if we make Men of War 4 or 3 or whatever, it'll be our decision if it has to be on Mars or it has to be in Afghanistan, or somewhere else. So there is a lot of creative risk even in a proven property. So we had a big experiment by making IL-2 Sturmovik on consoles, and we were quite afraid that consumers would not get it. But a few hundred thousand people bought it, and many gamers actually entered the simulation genre on console. Many hardcore simulation fans said 'I am buying an Xbox because there's no other way to play it.' That was an experiment, so I think we can do something else. So I was talking to another publisher, they were saying 'we love Men of War, we believe it has to be massively online to be much more successful.' Well, okay – talk to us, explain to us why.

Overall, I believe that multiplayer is becoming much more important component. Some don't even have a singleplayer and are very successful. Sometimes these heavy story, great graphics, great dialogues games don't sell much, because the consumers say 'I spent 50 bucks and that's it.'

We'll see, because one of the upcoming Men of Wars, Assault Squad, is heavy multiplayer, is like Battlefield-type game, it's an interesting twist. We've got some players saying 'Men of War: Red Tide was singleplayer only, what the hell?' Ok, so this one will have almost no singleplayer, so we'll see.

Nikolay Baryshnikov is Head of 1C's Gaming Division. Interview by Alec Meer.

8 Comments

Jonatan Crafoord
Neuron

33 55 1.7
Refreshing interview and very interesting read!

Posted:3 years ago

#1
I find the down to earth comments refreshing.

"To me, like a consumer of yogurts or movies... you ask me who was the director of that movie, I have no clue"

Ace!

Posted:3 years ago

#2

Nat Kyriakis
Marketing Manager

2 0 0.0
A much better read than any of Kotick's usual BS.

Unfortunately, I suspect the page views this interview will achieve will be inversely proportionate to the quality of the opinions it expresses.

Posted:3 years ago

#3

Alan Wilson
Vice President

27 19 0.7
Nice interview, Nikolay! To echo the comments above - genuinely honest and open, unlike too many stock-price-obsessed CEOs. And there are some very good points in there - people should listen up some!

Posted:3 years ago

#4

Terence Gage
Freelance writer

1,288 120 0.1
I agree with the previous comments; nice to hear such a down-to-earth and refreshing review, which is probably a far more accurate reflection of the industry than some executive from Activision or EA shouting how they're going to sell X million copies and rule the genre, and so on.

Best of luck to 1C, and I hope they find that global big-seller they could do with. It would be great to see a few smaller publishers from central and Eastern Europe meet with more international success.

Posted:3 years ago

#5

Sergey Galyonkin
Marketing Director, EMEA

24 0 0.0
Good interview, agree with Mark on besk quote :)

Posted:3 years ago

#6

Sergey Galyonkin
Marketing Director, EMEA

24 0 0.0
Good interview, agree with Mark on besk quote :)

Posted:3 years ago

#7

James Ingrams
Writer

208 72 0.3
Keeping the customers you have is cheaper than getting new customer. Stay PC and you will end up with almost a monopoly given how so many games from the large U.S. publishers are console 'style' games converted to PC. Hence we have in the U.S. a game like Jade Empire and Mass Effect easily called an RPG, and yet in Europe we have The Witcher and Gothic 'PC style' games that are called RPG's. Well, I think Worldwide PC gamers who were playing RPG's in the 90's would recognise the Witcher's and Gothic's as cRPG's a lot easier than they would recognise Jade Empire and Mass Effect as cRPG's!

Posted:3 years ago

#8

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