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Wargaming's expansion is relentless - and so far, it's working Exclusive
Wargaming's expansion is relentless - and so far, it's working
April 2, 2013 | By Kris Graft

April 2, 2013 | By Kris Graft
More: Console/PC, Social/Online, Business/Marketing, Exclusive, GDC

If you're making online and free-to-play games, and not watching Wargaming's every move, you should go ahead and start doing that immediately.

To refresh your memory, the company is the developer behind the free-to-play MMO World of Tanks, which has 50 million registered users. As of February 2012 the game had 120,000 peak concurrent players in Europe alone. Russia saw 500,000 unique players on one server at the same time.

The game is massively profitable, and has allowed Belarus-based Wargaming to make major technology and talent acquisitions, including online middleware company BigWorld ($45 million) and more recently FEAR 3 developer Day 1 and Supreme Commander studio Gas Powered Games. Wargaming is also expanding its World of series with warplanes and warships, and bringing versions of its popular franchises to mobile.

With Wargaming now at 1,500 employees and 14 offices all over the world, CEO Victor Kislyi isn't planning to let up on his company's aggressive expansion.

"[In the next five years], we'll probably open up a couple studios, or acquire one or two, just to get the best possible talent," he told us at GDC 2013. "We very aggressively moved into America, and we'll keep doing this, just because we realize our designers do not 100 percent understand Western audiences.

"That's why we need [Gas Powered head] Chris Taylor, that's why we need the Day 1 guys, that's why we need our people in San Francisco. We're acquiring expertise. We're not arrogant, we don't say, 'Russia has the best talent!' It's a good place to have artists and designers, but in order to attract an American market, you need to have American designers on-hand."

The company was founded in 1998, so it has been around to see all of the drastic changes in the online and free-to-play markets. Before, free-to-play was about badly-localized online games that were licensed from Chinese game companies. Monetization methods didn't match up with Western consumer expectations, and neither did the Chinese medieval themes and characters.

Wargaming's fundamental strategy is simple to understand, but incredibly challenging in practice: Take that free-to-play model that emerged in Asia, and combine it with high-production values, themes and gameplay that attract a mostly-male Western audience. With over a dozen locations worldwide, Kislyi says logistically, with time zones, and culturally, there are challenges that the company is trying to overcome.

He says it'll all pay off in the end. "When we plant that last flag in say, Australia or Brazil, the whole plan kind of takes care of itself. You don't need to worry where to go next, if you're everywhere. It's at that moment, quality takes over, and effectiveness at making your games, service and marketing better, because we'll have a very specialized staff. It'd be nice to release one big title per year."

And you won't be surprised to hear that Kislyi is the biggest free-to-play advocate around. "The whole world is your potential market [with free-to-play]. It's a transformation of the old days of physical distribution...You just have to ride this wave. You cannot withstand this wave."

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Michael Joseph
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" including online middleware company BigWorld ($45 million)"

World of Tanks is powered by BigWorld tech of course. Must be nice when your game becomes so successful you're able to purchase the entire company who's tech you've built your flagship product on.

Is F2P the key to Wargaming's massive success with WoT? I'm not convinced that a crippled demo that didn't expire combined with a one time full purchase version that unlocked all features wouldn't be equally successful. Crippleware has been around forever and has the advantage of keeping the business model separate from the game design.

Wargaming at least seems committed to making real games and their acquisitions reflect that. Contrast that with a company like Zynga that burned through hundreds of millions of dollars acquiring fad companies.

I think it's interesting that simulations are showing people that they're not dead. That they too can take advantage of the industry's broadened player base. And it's not surprising that it took devs from an eastern European country to demonstrate that.

Yuval Bayrav
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I don't think you understand the economic model of F2P. The most important factor is that there is never a finite amount of money that 'buys everything' in the game. There is always something to spend money on, most importantly key game elements which are perishable upon use, like power-ups, fuel, ammo, etc.

This 'no-upper-limit' to potential personal spending inevitably causes a small minority of players (usually a fraction of 1%) to become responsible for 50%-80% of the entire game's revenue, paying thousands and tens of thousands of dollars per player. This cannot happen with a one-time purchase like you described.

In the limited-demo model, everything rests on convincing players to make a big 1-time purchase. Only a small minority (usually under 10%) will do that. In F2P, you have multiple purchase options and price points, and even if a small fraction of players start spending money, some of them, even if very few, will spend so much that it will make the product profitable.

Let's go crazy and say a limited demo would have still attracted 50M players, and that 10% would have made a $40 purchase of the full game. This is absurdly unlikely, but NVM. That comes out at $200M. If, on the other hand, Wargaming is doing just OK by the F2P model, they should be doing $300M. If they are doing very well by the F2P model, they should be doing at least $1B. And I expect that the real number is much closer to the latter estimate.

To summarize: F2P is a lot less risky and has a much higher potential for revenues than any other current model.

Michael Joseph
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Thank you Yuval. I suspect you're right. I think I have underestimated what f2p financial success means compared to a traditional business model for the same product.

As I consider it now, I wonder if F2P might be close to some sort of optimal business model for game sales... to the masses. I don't know.

I think my reprehension to the f2p biz model may be due to some old fashioned notions I have. Old fashioned may not mean shrewd but it doesn't necessarily mean unwise either. I'll stick to buying games that I can buy completely at once.

WHERE ARE ALL THE SINGLE PLAYER F2P GAMES? Sounds almost comical but it is a serious question. Could one construct a single player game that required the player to purchase upgrades to complete?

Are there any F2P games out there where people proclaim "YOU ARE REALLY MISSING SOMETHING SPECIAL!" if you are not playing it? In this sense I'm trying to define what it means to be a great f2p game beyond how much money it generates. Because there is a difference between addiction and love. Millions watched "24" because they... got hooked,

but people still love "Firefly" or any "Trek" or "Babylon 5" and have re-watched multiple upon multiples of times.

Nobody watches re-runs of "24".

Shows like "24" are kinda like heroine. Nobody loves heroine. And if you're a developer, maybe you'd prefer it if people loved your game as opposed to just got hooked on your game.

Dave Ingram
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Russian components, American components - ALL MADE IN TAIWAN!

Jason Chen
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It is all now Made in China

Justin Speer
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"You cannot withstand this wave."

Don't 100% agree with the sentiment but I love this quote.

Justin Leeper
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What a great success story. I'm happy for Wargaming. After seeing their flight game at E3, I predict even bigger things in their future.

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Ramin Shokrizade
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World of Tanks was the first online game that I observed (during their beta) that substantially contained all of the characteristics of an effective monetization model, based on my 2009 research paper "Sustainable Virtual Economies and Business Models". It may still be the only game, though League of Legends comes close. I go into detail as to why in my Supremacy Goods microeconomic model which I published here on Gamasutra (
on.php#.UEs0NY1lThM). Both of those games are fairly small in scale. I am eager to see who will be the first to deploy an effective monetization model in an MMO. I don't consider games with up to 30 players in one play environment "massively multiplayer", and these games also have very limited persistence since play durations are generally under an hour and then you start over. I also think that it is possible to use the same techniques in mobile games, but no one has done this yet.

Chris Keeling
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Disclosure: I have worked at Wargaming for 4 years.

@Yuval As you alluded, free to play is definitely the current driving force in online and mobile games, and with more deep, high-quality games like World of Tanks the retail market will be doomed. However, Wargaming doesn't rest and you can expect us to diverge from both the PC platform (we've already announced our first tablet game, Blitz, a port of WoT) and our World War II combat theme. But online, free to play, and challenging fun? Definitely!

@Dave and Jason I'm guessing those comments were tongue-in-cheek, but we don't do any development in Eastern Asia (although the PRC mandates that we have a separate Chinese publisher there, the same as for any other game company).

@Joshua Naturally, with a name like Wargaming, you can always expect fighting in our games, but we have been pretty good about keeping blood, sex, and profanity out of our "toy tank" combat game, and even our previous titles. We've also continually reduced the game's pay points to make it "more free," and with Company battles and Clan Wars experienced players can indeed group up and pick their battles. Also, I'm not sure what nationalistic underpinnings you are referring to, but the company started in Belarus and our HQ is currently in Cyprus, with worldwide investments and major efforts to Westernize our products. There's no national favoritism or bias (or a political message of any kind) in the game itself, but the Russian-speaking community is certainly older, larger, and more active than our North American community.

@Ramin Definitely like your rules! These are the kinds of monetization methods we're trying to establish in our games to prevent overpaying (yes, that's right, bleeding players hurts LTV) and keep the game accessible to new players and free players at every level.

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