Market Report: Russia
Akella's VP of publishing, Vladimir Koudr, outlines a tough past year for the industry - but what of the future?
Continuing our ongoing look at videogame markets around the world - and particularly how they've been affected by the economic recession - here we get an update on the situation in Russia, a country that's often been nominated as a key growth region.
In this interview, Akella's VP of publishing, Vladimir Koudr, talks about the current split between platforms, which companies are facing the most pressure, and how the piracy situation is continuing to improve.
Akella is one of the oldest players in the Russian games market - it was created in 1993 - and during our history we've had a few very successful milestones. We were the first Russian company to fully localise a title in Russian, a racing game from Ubisoft called Pod. In fact, it's fair to say that was the start of the legal and European-standard market in the country.
Our first self-developed big title was Sea Dogs, a pirate game published by Bethesda, and later on we started developing another big product which was originally to be Sea Dogs 2 - but that changed to Pirates of the Caribbean.
Bethesda bought a license from Disney to publish a game after the success of the movie, so one year before the planned release, we made some big changes to the game and developed it on Xbox instead - so it was the first Xbox title developed in Eastern Europe. So far we've sold around 2 million copies of the games in Russia alone.
In 2005 we received investment from two companies, which has helped us to increase our activities - and up until 2008 we grew pretty quickly, along with the rest of the Russian market (in 2007 the market grew around 30 per cent, but that's fallen off now).
Now we're developing a new game called Disciples 3 - originally it was a franchise which belonged to Strategy First, but we purchased the brand and now we're developing the title.
Well, previous games in the franchise were very popular here in Russia, and we're expecting good results in the international market. We're going to release Disciples 3 after Christmas, it's really in the final stages of development. It's in the same genre as Heroes of Might & Magic.
It's a PC game, so our main expectation is from markets where PC games are relatively strong - Eastern Europe, Russia and of course Germany. We also have some pretty strong expectations from the US.
Yes, we're going to distribute it through the major digital channels, although unfortunately they're not very strong in Russia - but retail is pretty strong. Russia is a PC game kingdom - over 80 per cent of retail and online is PC-based. Consoles are less than 20 per cent - that's all the consoles together.
It's historical - for example, 15 years ago it was 100 per cent illegal, just pirated software, and it's easier to pirate a CD-ROM than it is a cartridge, so that made it harder for people to get pirated console games. It was much cheaper to get a PC, and get all the software for free.
So the installed base grew quickly - at the moment in Russia there are about 9 millions PCs that can play modern games. Compared to the consoles... the installed base for the PlayStation 3 is about 200,000, for example, while Xbox 360 is about the same.
For the big titles, the triple-A games, we want to create products that will sell internationally, but also in Russia. This year we're expecting more from the Russian market, because it's grown pretty quickly - and of course it's easier for Russian developers to create games that will be more popular here. We've got a better understanding of this territory; we're from the same culture.
It's possible to find a game that will be hugely popular in Russia, and also sell well in Europe - or the other way around. But for games that are hugely popular in the US, sometimes they're really not so popular here in Russia.
We have a really strong publishing line-up for next year - as I said, we've got Disciples 3 very soon, and a number of very strong titles after that, like Assassins Creed 2 and particularly Metro 2033 -which will be published by Akella on PC.
It's a game that looks like it will become extremely popular in Russia - we presented it at our specialised booth at Russia's biggest public games show, Igromir, last month, and the buzz was just great.