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Gunning For Russia: A Market Worth Investigating?

December 8, 2011 Article Start Page 1 of 3 Next

Russia is one of Valve Software's highest-grossing countries, says co-founder Gabe Newell. Indeed, outside of Germany, adds Newell, it is Valve's largest continental European market.

Russia? Is it really worth jumping some hurdles to penetrate that marketplace? Apparently, yes, according to those in the know. They enthusiastically recommend to developers -- especially those in the PC space -- that they consider putting in the extra effort to sell there.

"Russia is just like Germany -- a very PC-oriented game market that is today behaving a bit like an emerging market, like Brazil," says Peter Warman, co-founder and CEO of NewZoo, a Netherlands-based market research and consulting firm focused on the games industry.

"People there love PC games, especially free-to-play (F2P) games. So if you're in that sector, there's practically a guarantee of success. If you're in a different market, Russia may not be as interesting for you."

Warman estimates that there are almost 40 million gamers in Russia -- compared to a total population of about 140 million -- with about 25 million actually spending money on their gaming.

According to his research, 47 percent spend on boxed PC or Mac games, 36 percent on console games, 35 percent on MMOs, 29 percent on downloaded PC or Mac games, 26 percent on social network games, 24 percent on casual games, and 23 percent spend on mobile games. (The average Russian plays in 4.7 of these segments.)

And while only 50 to 60 million Russians have internet access, that is expected to increase to 80 million in the near future, creating a high potential for game market growth from the current size of the marketplace, which is about $1.5 billion (including an estimated $210 million spent on game downloads).

"High-quality PC games appeal to Russian gamers, regardless whether they are boxed games, downloadable, or played in a browser," says Warman.

But because many of those gamers don't have the budget -- or don't want to spend their money upfront -- free-to-play MMOs have a particular appeal because the gamers can start for free, and then either spend a little more on microtransactions or, according to Warman, "shell out ridiculously high amounts."

"Just as Russia is divided into really poor people and those who drive around in Ferraris -- with few people in the middle -- there is a big divide in gaming between those who spend nothing and a small group -- perhaps 10 percent -- who go over the top and can spend $5,000 a month within a F2P game," he explains. "It's obviously important to discover that very specific niche that caters to that latter group. You can see that reflected in, for example, the success of's World of Tanks. That's why that game is making such a huge amount of money."

World of Tanks

What developers ought to avoid in Russia, says Warman, is the console space, which is extremely small and which attracts the most piracy, a problem for which Russia is well-known.

Indeed, according to Warman, 72 percent of Russian gamers admit to ever having used online file sharing to acquire PC and Mac games for free, which is the highest percentage in the world, compared to 64 percent in Brazil, 37 percent in France, 35 percent in the U.S., 30 percent in the U.K., and 22 percent in Germany.

"That is one reason why the local developers and publishers have embraced the F2P business model where piracy, of course, isn't a big issue," he says.

Warman also recommends releasing games in Russia and elsewhere simultaneously. Otherwise, he says, Russian gamers get wind of a game they don't have in their country and they seek it out and download it from a file sharing site.

"Russia's hardcore gamers are fanatics about having the newest, coolest stuff first," he explains, "and if it's not readily available to them, they'll find it someplace."

This is just what Newell said. "The people who are telling you that Russians pirate everything are the people who wait six months to localize their product into Russian. The easiest way to stop piracy is not by putting anti-piracy technology to work. It's by giving those people a service that's better than what they're receiving from the pirates."

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Yuliya Chernenko
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Thank you for such an interesting article.

I have never thought about localization as the root of piracy in Russia. May eb ebcause of bias among my friends, we all know English and therefore prefer authentic games. However, it is true that little of Russians know English to play non-localized games.

And it is absolute true, that PC gamer dominate, that could eb explained from social-economic point of view. Even though, computers cost more they are more useful and it is easy to change one part of computer without changing others, whereas with consoles it is not that easy, even impossible. Computers are long-term investment for a family, as not only "gamers" would use it.

As it was mentioned in the Article, There is a lack of good pc games, some games that have a pc version are more console-oriented, that irritates some of gamers, see what have happened with Dragon Age II, I would notice that those who loved DAO where pissed off.

Steam - is one of the best opportunity brought to Russian gamer after piracy in 90th. Some of gamers do not like 1C, and Steam makes at least some competition, as there is an obvious oligopoly in publishing and 1C is the biggest company. There were some steps which seemed illogical for gamers, as a prohibition to buy Skyrim from Steam. I would say it is a pretty silly thing to do, as only a few went to the shop and bought a game other went to torrents.

So just Enter Russian market, still be wise to do it properly.

Maxim Samoylenko
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"There were some steps which seemed illogical for gamers, as a prohibition to buy Skyrim from Steam. I would say it is a pretty silly thing to do, as only a few went to the shop and bought a game other went to torrents."

This was not 1C's decision not to publish Skyrim in Steam in Russia.

Yuliya Chernenko
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My fault, but then why is this so? I am just curious about it)

Maxim Samoylenko
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Yulia, I guess, it has more to do with Steam and Bethesda negotiations. As you can see, all Bethesda products are absent from Russian Steam. Even id Software games have been removed from there.

Yuliya Chernenko
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Thank you for your answer, I did not noticed that Bethesda's product were absent, due to my little use of Steam.

Mark Barney
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Our RTS series of games has always been very popular in Russia and the CIS, our F2P MMORTS is no exception. When we started our Community Translation project to localize the game, our Russian fans were the first to complete a full translation of the game into their language! Overall Russian players tend to be very computer literate, but the community can be difficult for outsiders (non-Russian speakers) to penetrate.

MMOs aren't like single player games that can be shipped and deemed "finished". They require 24/7 maintenance and management, as well as regular development. Interacting with the community is an integral part of doing this successfully. Being fluent in German, English, and somewhat competent in French I am able to personally interact with these communities and hear about issues or concerns in their native language on their own geographically correct game worlds.

Naturally, finding a local partner had long been our barrier to launching a Russia-based Russian language game world. So the article is not solely an endorsement of 1C, I'd like to mention that the teams I've worked with at Akella have been very nice and quite helpful!

Great article!

Vitaly Vidmirov
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"This is just what Newell said.

It's by giving those people a service that's better than what they're receiving from the pirates."

It doesn't matter what he said anymore. After the conversion to roubles, a lot of interesting titles is no more available in Russia (including 100% russian games).

This is ridiculous. They even ban trailers and demo versions.

It is possible to buy Steam key for SOME titles, though.

Regional division of internet(!) is amazingly stupid.

*upd: I feel my post sounded a little rough. I really appreciate all the work Valve did with Steam. And I don't buy PC disc games anymore. 100% Steam.

Jakub Janovsky
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Complain to publishers - its their choice if game will be available on Steam for that region/country.

I have same problem with Skyrim here in Czech republic.

Harry Fields
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I would love to see more cross pollination between Russia and North America. There is some amazing talent in Russia and some real gems that will never see the light of day in the USA because none of our publishers have the balls to go into that market and start some importing and exporting of product.

Ruthaniel van-den-Naar
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I hope that the videogaming market will grows rapidly and in 3 or 4 years, will not majority of games too aimed at the American taste (mostly bad taste).