Wargaming: Battleships, Belarus and Business Suicide
CEO Victor Kislyi has started a global conflict and he's welcoming new challengers
Wargaming.net is going at full pelt in the PC world, operating the huge World of Tanks and building two new companion games, World of Warships and World of Warplanes. The user numbers of World of Tanks dwarf the competition with 35 million registered accounts and 20 million players, a quarter of which are said to spend cash in the free-to-play game. The company, based in Belarus, has expanded from 250 to 1,100 staff with enough global offices that the sun never sets on the business.
This month Wargaming bought Australian engine maker Big World, because as CEO Victor Kislyi tells GamesIndustry International it "wanted to be at the front of the queue" rather than wait around and be treated like all the other Big World clients. While competitors are muttering about entering the free-to-play space to monetise players, Wargaming has already grabbed chunks of the market, feeding them content and updates as quickly as they can gobble them down.
In this exclusive interview with GamesIndustry International Victor Kislyi talks about the continuous work associated with the free-to-play business, why he's happy for competitors to step into the arena and the company's early mobile experimentation plans.
Q: Should we expect that all PC gaming as we used to know it will now become part of the free-to-play market?
Victor Kislyi: A lot of games will be free-to-play. What I hope and what I want is that some companies keep doing the classic franchises, the single player games. I think single player games are still viable, that experience is still viable for classic RPGs, empire building games and some first-person shooters like Half-Life.
"Free-to-play is still the wild west. We don't know free-to-play, we've just conquered this player versus player niche"
Q: So you think the free-to-play model can't be applied to single player games?
Victor Kislyi: Free-to-play is still the wild west. Nobody knows and nobody can predict where it will evolve to, where it will branch out to. I can see a single player experience being done on a server, like Gaikai or OnLive. At Wargaming, we don't know free-to-play, we've just conquered this player versus player niche, we're responsible for that.
Q: Your company used to make boxed games but you shifted to free-to-play, despite what you called an emotional attachment to that old business. Is that's what's holding back developers and publishers, they emotional attachment to the old way of doing things?
Victor Kislyi: To some extent, yes. But the fundamental reason is the bigger publisher and their historical tendency to go through retail as the safe business model. They knew how to do it for the last 20 years. The big publishers controlled distribution and they owned the shelf. And every year it was the same - developer, contract upfront, gold master, yearly reports, Christmas sales, a year at high price then go to discount boxes. It's understandable and an easy to follow business model. But then the consumer changed and the world changed.
Q: How are you finding the free-to-play market, because it's very busy right now. There are a lot of publishers and developers jumping in hoping to make an impact.
Victor Kislyi: Honestly, our competition is the European football cup. When Germany plays our numbers go down. It was the same with the Olympics. And maybe Diablo III because we'd all been waiting 10 years for it. The thing is that some think free-to-play is a little bit inferior than the triple-A box. Right now our company is more than 1000 people. We've just bought Big World and right now we control our pipeline of technology which is being used across our three games. We have 150 developers but 650 of our people are servicing World of Tanks, not developers. That's not a cheap thing to do. My answer to how do we see competition? Welcome to the club. You're going to need to build a global network. In Russia we have 200 people, in America 70 people. People perceive that kind of game, consciously or subconsciously, as a service. Even if they don't pay, and there are dozens of millions of them, they still require the service. If they have a bad experience they spread bad news.
So not only do you have to build a beautiful game you need to build an infrastructure to support that with 400 or 600 people. And that support has to be global, you cannot have a foreign call centre. You have to have local PR people, marketing, support. Right now there's a very high threshold to entry. We were lucky to be in a position to pioneer that some four years ago and are now ahead of the crowd in many senses. But even now we are strangled, we are stretched out giving our best performance. We hire like crazy, we invest like crazy, we build data centres. And then new physics, gaming modes, new bells and whistles all the time.
"My answer to how do we see competition? Welcome to the club"
It's easy to launch with an impressive concept but when you are already a hit game for two years you have to continue to give new content. People expect a new hit every two months. You need the content, the business structure, the network, the culture, the experience to sustain that mad pace of hit updates.
Q: You bought Big World for the technology recently, and previously you acquired studios in order to develop two new games (World of Warships, World of Warplanes) rather than distract from the World of Tanks teams. Can we expect more acquisitions as you continue to grow the business?
Victor Kislyi: Acquisitions are good. The Kiev studio and the St Petersburg studio, we acquired them 100 per cent. The hardest part of those deals is the fast integration. We have to synchronise the studios, the tech expertise and the game production process. With Big World it was not right because we were one of 40 companies they served and we had to deal with tickets and requests and we queued up. We wanted to be at the front of the queue, we deserve that.
Q: What I mean is you're running at top speed at the moment with three huge projects and staff to support them. Is it easier and cheaper for you to buy up technology and studios rather than grow them organically?
Victor Kislyi: It is difficult because we're smart and wise people now. Every business book tells you that doubling your business in a year is suicide. With our St Petersburg and Kiev studios they don't have to re-invent the wheel, they have a successful hit concept to work with that was pioneered by World of Tanks. But don't forget that with World of Tanks it took more than two years of development before it was live. To get to the same stage with World of Warplanes it took ten months.
We're not buying companies to disintegrate them and get the assets, we don't care about the assets. It's about working with talented people. With the Eastern European businesses it was culturally similar but let's see what happens with Big World in Australia, it's a challenge.
Q: As well as free-to-play being a big growth market, free-to-play on mobile it's the growth within that. What is Wargaming.net looking at in that space?
"World of Tanks took more than two years of development before it was live. To get to the same stage with World of Warplanes it took ten months"
Victor Kislyi: It's a tough one. Our main focus right now is the three big projects, we cannot screw that up. We have to keep going and deliver two more hits. Everyone's talking about mobile and the future belongs to mobile. Right now we have a small department, about 30 people, concentrating on mobile research. It was an acquisition, they were doing some small casual iPhone games. Right now they are working on experiments and researching, and working with Big World as well. It's probably too early to rush. But a game like World of Tanks wouldn't work on tablets with those kind of controls and with connectivity, 3G would not be as reliable as a web line. But so far we have World of Tanks Assistant for iOS and Android and they keep you connected with your statistics. But yes, we are thinking about some specific entertainment product.
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