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Russian market to recover in 2010 - Akella

Wed 09 Dec 2009 8:00am GMT / 3:00am EST / 12:00am PST
Emerging MarketsPublishing

But more developers will close before then, says company's VP of publishing

Akella

Founded in 1993 and headquartered in Moscow, Akella has become a leading developer, publisher and distributor...

akella.com

The Russian videogames market has taken a battering in the past year, and while it looks set to recover in the Fall next year, the region will see more developers fall by the wayside before then.

That's the view of Vladimir Koudr, VP of publishing at Russian company Akella, who told GamesIndustry.biz that one of the biggest problems has been that publishers have had less cash to spend on commissions because of the devaluation of the Rouble.

"Well, the economic situation in the last year isn't very good," he explained. "The retail market dropped twice, and the Rouble was devalued by about 25 per cent. In our sales structure we can see more than 70 per cent of sales are based on international licenses - so we pay for the license in Dollars or Euros... and there's a problem. The fall in the currency has really damaged the business."

That, coupled by a general rise in salaries as a result of the oil boom, has meant that many companies are facing wage bills that are unsustainable in the current climate.

"When it comes to development here, it's not an easy business - recently Russia's been the oil country, and wages were higher because there was more money coming into the consumer markets," he said. "However, in my opinion very few Russian studios can actually create really competitive international titles... but maybe that's like everywhere - 90 per cent of studios create average titles, and only 10 per cent can really make something special.

"I think there are two major problems for Russian developers - high salaries, especially in cities like Moscow (which is like a big European city now) where people expect good wages. For developers, that's not very good. Ten or fifteen years ago it was possible to make a decent game at a much lower cost than the rest of Europe, for example, but now that's not the case.

"The second problem is that we have a shortage of designers here with the expertise of making games that will appeal internationally - in the US market particularly - because of the cultural difference. So if a Russian developer wants to make a game for the US market, they need to hire an American producer."

"We can see some signs of recovery," he continued. "September was about 35 per cent lower than last year... but that's better than the Summer, which was about 50 per cent down. In my opinion we'll see a real recovery next Fall, but this year will just be year-on-year drops."

And in the meantime it'll be the creative teams that will bear the brunt of the continuing economic struggles, he added: "Before the crisis it was very difficult to get loans from the banks, so small- and medium-sized developers worked only for money from the Russian publishers.

"Now the publishers suffer from a drop in sales, so they don't have enough money to invest in the development - so those smaller companies are closing as a result."

The full interview with Vladimir Koudr is available now.

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