6:57 23/10/2014Cloudy-6°C
USD23/1040.9671-0.0830
EUR23/1052.1388-0.5080

BUSINESSRSS

© RIA Novosti. Vladimir Vyatkin

Game on in Russia

by Ed Bentley at 06/09/2010 20:05


Entertainment giants


Disney have become the first Western company to take the plunge into Russia’s online game market amidst worries over rampant piracy.


Playdom, bought by the media conglomerate in July, will team up with I-Jet Media to publish four undisclosed titles in eastern Europe.


Russia’s market for online games has doubled in the last year to between $60 and $80 million, according to data from I-Jet Media.


“The market of social games in Russia will go on growing further as Russian social networks will boost their popularity,” said Alexei Kostaryov, general producer at I-Jet. “However, it is worth noting that the period between 2008 and 2010 was ‘garage’ and amateurish to some extent, whereas the following year will be the time for restructuring.”


Playdom has also signed a deal with 101XP to release games in Russia which will be playable on the most popular social networks, such as Odnoklassniki and Vkontakte, as well as Facebook.


When pirates ruled the net


Previously, Western firms had refused to get involved with Russia’s online game market due to concerns over piracy.


Tentative government action has so far failed to yield results.


“While the government has reiterated its commitment to stepping up its efforts regarding intellectual property protection, the preponderance of free content in Russia means that many users are unwilling to pay for content,” Boston Consulting Group wrote in a report on internet growth in emerging markets.


Game manufacturers are worried that hackers will steal the code, using it to produce ripped off versions.


I-Jet Media say that it is a matter of allowing the market to mature, and then the quality of large manufacturers will begin to dominate the market.


“Those who deal with hackneyed cloning will be given the sack,” said Kostarev. “Companies that are incapable of supporting their games will go away too.”


Local manufacturers say that although piracy remains a major problem for the entertainment industry, its effect on online games is minimal.


“We have a completely different budget [from the pirates], and work to start a pirate social game is more complex than, for example, selling cracked copies of any popular shooter,” said Ekaterina Cherkasova of Mail.ru, which owns producer IT-territory.


The Disney tag team, however, have said they will step up the fight against copyright violations, with little evidence that government action is working.


Playdom say they will identify illegally reproduced games, while I-Jet Media will take complaints from developers harmed by piracy.


The development of social networks will also help limit the level of piracy since they will take steps to ensure there are no applications that could damage their business.


“Local social networks would not like to be identified with piracy and therefore will toughen the requirements they apply to applications and work with mature distribution networks,” said Kostarev.


Winner takes all


But Disney is likely to face a battle from local publishers to corner the market, with a host of games already existing and dominating search engines’ advertising spots.


Russian companies, however, say that the entry of the world’s largest social games company will improve the market and force them to become more competitive.


“Firstly, users will receive quality localised hits instead of poor piracy versions, [and] secondly Russian publishers and developers will find new stimulus to release quality, interesting and competitive products,” said Cherkasova.


Copy and paste


Playdom’s entry is also likely to encourage its American competitors, such as Zynga and Playfish to look east.


“The American social games market is close to its saturation,” said Kostarev. “That is why all these companies are searching for new outlets and new audience.”


Farmville, made by US-based Zynga, is one of the most popular social games worldwide, but most competitors have a similar rival.


I-Jet Media offers “Happy Farmer”, while Mail.ru’s IT-territory has “Lovely Farm”.


Many of the popular games, however, have their origins in China, where online games are thriving. Cherkasova of Mail.ru said that while there are copyright issues, it is similar to the auto market, where consumers move towards the best quality.


“The ideas and mechanics are not fully protected by copyright, therefore cloning, especially at the initial stage of development of the market, is an inevitable evil,” she said.


Best of the BRICs


But whatever the problems and increasing competition mean, analysts have marked the Russian market out as one of the most lucrative, despite the fact that there are more Chinese people already plugged into social games.


“Russians have more disposable income on average than consumers in any other BRICI [including Indonesia] market, and many are willing to pay for services such as online games,” the Boston Consultancy Group wrote. 

  • Send to friend
  • Share
  • Add to blog



Advertising in The Moscow News

Most read

Рейтинг@Mail.ru