VK Restarts Games

VK Restarts Games

VK intends to invest about 300 million rubles in Russian video game studios in 2023 and launch educational programs at universities to train specialized personnel. Previously, the holding company within the framework of My.Games, which was sold in 2022, invested more than 6 billion rubles in the creation of video games around the world over four years. Given the budget deficit of the industry in the Russian Federation, strategic investors are needed, experts admit. But VK will focus on low-budget projects with a short development cycle, because it will be difficult to recoup triple-A games only at the expense of the Russian market.

VK Restarts Games

According to VK's presentation “The Development of the Game Industry in 2023-2024", which was presented at the meeting of the Ministry for Digital Technology, Communication and Mass Media with representatives of the video game development industry, that the holding company plans to launch specialist training programs at universities: HSE, VSU, ITMO, PSU, ISPU, MIREA, that will allow it to grow dedicated experts, and VK Play division will invest about 300 million rubles in video game studios in 2023. 

In 2022 the holding company started to attract actively the audience and developers to its VK Play platform. In fact, VK continues the strategy of My.Games, which was sold by the holding company in September 2022 for $642 million to the manager of LETA Capital Alexander Chachava. In December, My.Games announced its exit from the Russian market.

My.Games Venture Capital (MGVC) investment fund has been actively investing in Russian and foreign game studios until 2022. For four years, the company has invested a total of more than 6 billion rubles in the aggregate in the creation of video games, said Vladimir Nikolsky, co-founder of My.Games, said in an interview with RBC in 2021. By mid-2021, MGVC portfolio, according to its own data, will include more than 40 studios, including foreign studios. At that time the company, according to InvestGame, make the top 15 15 world's largest strategic investors in the video game industry.

VK’s strategy is "clear and productive" because the Russian market has a demand for video games, there are teams capable of creating studios that can develop a product in a few years, believes independent expert Vyacheslav Makarov: “Now we just need an investor to give us enough money." At the same time, he adds, now Russian developers “are not able to bear more than 200-300 million dollars in three years.” 

The Russian video game market is in a unique situation, according to Artur Martirosov, Investment Director of Voskhod Management Company: in one respect, many foreign companies are suspending the sale of their games in Russia, and a number of studios have left Russia, but at the same time the vendors who stayed put in the country have received an inflow of new personnel and are now working to fill vacancies. “Now there are definitely investment opportunities in Russia, and the teams that have stayed put and continue to work are likely to grow into local leaders in a few years," he clarifies. The key point when making an investment decision, according to him, will be the strategy and geography of the studio's promotion, the possibility of buying traffic. 

According to a top manager of a major Russian video game developer, the market today lacks strategic investors "who are ready for long-term investments, and at the same time do not expect a 300% return”. Investments in low-cost projects with a short development cycle are more likely to be attractive, since the development and release of an AAA project (high-budget, high-quality games) cannot be recouped by selling copies only on the Russian market. "A game that is attractive for investment should be inexpensive from a development point of view," the expert notes, "and it should also be a service game (GaaS — Games as a Service, a way to monetize games), that is, it should bring profits not through the sale of copies, but through microtransactions of users within the product.”


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