Relevance of the research topic. The video game industry is the fastest growing of modern economic sectors and has achieved enormous success over the past two decades. The industry is also a pioneer in digital developments, as an example: interactive 3D technologies, virtual reality systems, software development (Sony, Microsoft), etc. In addition, the growing popularity of video games provokes an increase in the number of IT specialists, artists, graphic designers, composers and even e-sportsmen.
However, the increase in popularity not only provokes people to develop in, but also attracts the attention of states, and therefore censorship is introduced on some video games or, in some cases, video games are developed jointly with the state. We should not forget that quite a lot of children play video games, and this only makes it more interesting whether it is possible to use video games in teaching geography. The experience of European countries shows that it is possible to use some video games in the school education system, for example Minecraft is used to study the basics of programming or architecture.
Object research serves the video game industry of the world.
Subject of research — economic and geographical features of the video game industry.
Objectives of the study: studying the possibilities for the development of the video game industry in Russia and analysis of the Russian video game community.
In connection with these goals, the following tasks were set:
1. Study the history of the video game industry;
2. Identify patterns in the distribution of the largest development studios;
3. Identify problems in the development of the Russian video game industry in Russia;
4. Develop recommendations for integrating video games into geography teaching at different stages.
Theoretical basis The qualifying work included articles by users of the sites DTF, Playground and StopGame, the book by journalist Jason Schreier “Press Reset”, materials from the Higher School of Economics, news articles from the sites NewZoo and Gamespot, the work of Kutlaliev T.X. “Genre typology of computer games: the problem of systematization of artistic means” (2014).
Research methods. The following research methods were used in the work: comparative descriptive, cartographic, quantitative and qualitative assessments, survey method.
Research information base Used by: Accounting reporting sites such as Yahoo! Finance and audit-it, investment site Investing, file with financial statements of CD Project Red and Sony Interactive, results of a survey of the Russian video game community conducted by the author of the work.
The scientific novelty of this work lies in the systematization, description of the specifics of video game production and the compilation of a number of maps; identifying features of the development of the video game industry in Russia; conducting an analysis of the Russian video game community and developing recommendations for the integration of video games in teaching geography.
Practical significance qualifying work. The results of the study can be used to familiarize yourself with the history of video games and their significance in the modern information environment. As well as recommendations for integrating video games and video game technologies into education, instead of distancing from them.
Volume and structure qualifying work. The thesis consists of 3 chapters, a conclusion, a list of references and an appendix. The volume of work is 57 pages, including 25 figures and 11 tables, as well as applications. The list of sources contains 53 items.
Chapter 1. General characteristics of the video game industry
§ 1. History of the video game industry
The video game industry is considered one of the youngest in the world, relative to the automotive industry, cinema, and other things, due to the fact that at the moment it is only 50 years old, along with arcade machines, the development of video games for personal computers began only in the 90s and is currently only 30 years old. The beginning of the era of video games is considered to be 1971, when the first arcade video game Computer Space was released, but it was not a financial success due to complexity and incorrect marketing, so the brainchild of Nolan Bushnell is forgotten by many. The year 1972 was marked by the release of two high-profile projects:
· Pong from Atari is a game for arcade slot machines that sold 19 thousand copies (Fig. 2).
· Odyssey from Magnavox is the first video game console in history, marking the beginning of the first generation of consoles (Fig. 1).
However, Magnavox was unable to maintain leadership in home console sales for long, due to the fact that the company did not modify the console with the much-needed sound. Thus, within 3 years, Atari was able to take over the leadership in the sale of game consoles with a smaller version of “Pong”.
The popularity and simplicity of Pong led to a large number of “clone games”, which provoked an industry crisis in 1976-1977, bringing the industry to the brink of death. However, in 1978, a new arcade game, Space Invaders, was released onto the market, which was tasked with regaining the interest of players. Together with this, Atari released the second generation console “Atari 2600”, to which Space Invaders was later ported, becoming a system seller.
In 1980, the legendary Pac-Man, developed by Namco (Japan), entered the arcade market. The publishers were Namco themselves in Japan and Midway in North America (Fig. 3). In the first year of sales, more than 100 thousand machines were sold in Japan and more than 400 thousand worldwide. This project was able to attract an audience of all ages due to its simple gameplay and easy visual style, which increased sales of the game. The game was also published on the Atari 2600, where it sold 8 million copies. copies. The overall commercial success of Toru Iwatani’s brainchild exceeded the profitability of the Star Wars films.
In 1983, shortly after the release of a new generation of consoles (Atari 5200), a second crisis occurred that called into question the existence of the video game industry. The causes of the crisis were the following:
1. Oversaturation of the market with low quality games;
2. The emergence of home computers;
3. Loss of publishers’ control over the market;
The series of unfavorable factors ended with a project based on the Steven Spielberg film E.T. – “E.T. the Extra-Terrestrial" (Fig. 4). This project went down in history as “The worst game of all time and generations”. All specimens were buried in the New Mexico desert. The crisis lasted until 1984 and led to the collapse of video games in the United States, as Atari went bankrupt. This was the result of their investment in the aforementioned "E.T. the Extra-Terrestrial".
However, against the backdrop of the crisis in the United States in Japan in 1983, Nintendo entered the video game arena with the release of the third generation Famicom (Nintendo Family Computer), better known as the NES (Nintendo Entertainment System), which gradually gained popularity. Subsequently, Nintendo did not lose weight in the industry and to this day are members of the “Big Three” (Sony, Microsoft, Nintendo).
Also in the 80s, new genres appeared, such as RPG, and more complex projects. This was facilitated by the increase in the number of personal computers. But the main industry was still arcade machines. Also in the 80s, the first printed publications related to video games, manuals, magazines, etc. appeared.
In the 90s, with the development of digital technologies, 3D modeling and the introduction of CD-ROMs, the relevance of arcade slot machines began to decline. They began to be replaced by personal computers and, accordingly, computer games. In this decade, new genres began to appear, for example, shooters, the ancestor of which was Wolfenstein 3D (1992) from the studio “id Software”, which in the next decade would forever write its name and the names of John Carmack and John Romero into video game history by releasing “Doom” (Fig. 5, 6).
Also in the 90s, television programs about video games became widespread. And in connection with the emergence of games aimed at a large number of players, the first computer clubs began to appear, which can be considered the base of e-sports.
In 1994, the world’s first university training video game developers, the DigiPen Institute of Technology, opened in Vancouver [30].
The past 20 years have been a time of very rapid growth and development for the video game industry. Mobile platforms began to appear on which games could be developed, for example iOS and Android, the development of the Internet and its appearance in players’ homes provoked the closure of computer clubs, and the emergence of games such as World of Warcraft and other MMO RPGs. But at the moment, in Russia, computer clubs have begun to appear again, this is due to the fact that emerging video cards and processors are quite expensive for Russian players.
The development of technology also provoked the development of video games in terms of images, the complexity of mechanics and increased the cost of production. However, the increase in cost has also created a demand for qualified specialists in IT, audio designers, 3D designers and others like them. Thus, specialized universities and/or departments began to appear, for example: in 2003, an educational institution, Guildhall at SMU, appeared in the state of Texas, specializing in training in the field of game development, in particular game design [39].
Accordingly, this provoked a constant technological race between the three leading companies: Sony, Microsoft and Nintendo, due to the fact that these video game publishers bought and/or absorbed development studios. Thanks to this race, three console generations have already changed over the past 20 years. The 9th generation of consoles is currently underway.
§ 2. Economics of the Video Game Industry
The cost of developing video games at the moment can reach several hundred million dollars, for example, the most expensive game of our time: Star Citizen, the development of which has already spent 380 million. Doll. List of the most expensive games in history in ascending order:
10. Shadow of the Tomb Raider – from 75 to 100 million. Doll.
9. Metal Gear Solid V: The Phantom Pain – 80 million. Doll.
8. Battlefield 4 – 100 million. Doll.
7. Max Payne 3 – 105 million. Doll.
6. Grand Theft Auto V – 137 million. Doll.
5. Marvel’s Avengers – from 170 to 190 million. Doll. taking into account marketing;
4. Red Dead Redemption 2 – from 170 to 240 million. Doll.
3. Cyberpunk 2077 – 174 million. Doll.
2. Star Wars: The Old Republic – 200 million. Doll.
1. Star Citizen – 380 million. Doll.
Sponsors are usually video game publishers such as Electronic Arts, Ubisoft, Activision Blizzard and others. The games of these studios are called AAA (triple play) projects.
But it happens that money for the development of a game is collected, as they say, from around the world. This is called crowdfunding, this is how money was raised for the development of games such as Star Citizen, Pillars of Eternity, Shenmue 3 and others.
List of the most expensive games on KickStarter [46]:
1. Shenmu 3 — ~6.3 million. Doll. (supported by Sony, exact budget unknown)
2. Bloodstained: Ritual of the Night – 5.5 million. Doll.
3. Torment: Tides of Numenera – 5 www.irishspinscasino.co.uk million. Doll.
4. Pillars of Eternity – 3.9 million. Doll.
5. Mighty No. 9 – 3.8 million. Doll.
6. Star Citizen – 2.1 million. Doll. (the bulk of the funds were collected on the developers’ website).
As for the mobile sector of the video game industry, it is impossible to speak unequivocally about development costs. As a rule, mobile games in development are quite cheap and, accordingly, pay off much more successfully. Most of them are free to play/F2P and the majority of their revenue comes from in-game transactions such as purchasing in-game currency, premium accounts, or unique characters, skins, or weapons. In this regard, in the community it is customary to speak about mobile games in less than flattering terms, precisely due to the heavy emphasis on microtransactions. One of the most famous mobile game development companies is Rovio (Angry Bird) located in Finland. The company’s income in 2021 was: 30,911 thousand. Doll.
Vasily Skobelev, level designer, explained what the game budget consists of.
Tell me what the game’s budget consists of as a percentage?
The game budget consists of a huge number of components. They include such things as: the cost of a workplace (hardware, software, area, etc. n.), employee salaries, building/office rent, marketing, PR, merch, insurance, organizing internal and external events, purchasing traffic (if we talk about mobile phones), paying for audience research and consultations with external specialists and much more. It really depends on the specific project. If you make an indie game in an apartment, all costs can be reduced to regular purchases of provisions and payment for plugins for the engine. While AAA projects involve fabulous sums and great risks.
Vasily Skobelev
What are the costs of an advertising campaign from the total budget as a percentage??
Large buy2play projects in the premium segment (PC/console) can spend the same amount on an advertising campaign as on development, if not more. At one time, Ubisoft made a news story about the fact that the cost of advertising for Watch_Dogs was equal to the development. Now there is a rather painful retreat into AAA, when the audience has stopped accepting projects that are advertised at a higher price than they are in development. At the same time, in mobile games you can do without an advertising campaign in the usual sense of the word: you take an early build, select a suitable region of the world for your target audience and simply pay for traffic in order to catch up with user installations and view analytics.
Vasily Skobelev
But it’s not just Western countries that have succeeded in developing both “big” and “small” games. In 2012, the development studio MiHoYo Co was founded in China., Limited (hoYoverse) (pic.7). In 2020, the studio released the highly successful multi-platform* game Genshin Impact. The success of the game is based on the free distribution model and availability on various platforms, such as mobile phones based on iOS and Android, PlayStation 4/5 consoles, xBox One/Series X/S and PC. In addition, the external style of the project in the form of Japanese animation also provoked an increase in the popularity of the game. The basis of the project was gacha* mechanics. Genshin Impact is unique in that it combines Action Adventure, Action RPG and gacha mechanics, unlike other studio projects such as Honkai Impact 3rd. According to Sensor Tower, the majority of Genshin Impact players are located in China. More than a quarter of the game’s total first-year revenue ($577 million) came from the Chinese iOS mobile market. Japan ranks second with 23.7% market share, and the US is third with 21%.
In the context of payback, it is worth noting the division into genres. Genres are in turn divided into subgenres.
Table 1. Video game genres and subgenres by T. Kutlaliev, 2014 [33]
Subgenres are formed when a game is released that is distinctive enough to be imitated, such as the Metroid and Dark Souls games. The former, in turn, gave rise to the “metroidvania” subgenre, the latter to the souls-like subgenre.
But what genre of games pays off the best?. It’s difficult to say specifically, but most often it’s Action games, due to the fact that they have exciting gameplay and story. Some game series, such as Call of Duty, are called conveyor series, due to the fact that games in the series are released annually, and accordingly, the production of “conveyor” games is quite cheap. This approach also reduces the cost of an advertising campaign, because similar games are released regularly every fall.
It’s worth starting with employment. Despite the rapid growth and development of the industry, the huge number of people who have connected their lives with the world of video games and want to create these games, it is not difficult to get into the industry. It is more difficult to gain a foothold in it for a long enough period of time. In his book “Hit Reset,” Jason Schreier writes that the turnover rate in the industry is so high that some employees do not stay in their jobs beyond one or two stages of development. Fewer people reach project completion. There are even fewer of those who remain for the studio’s upcoming projects; as a rule, these are heads of development departments, but they are not immune to layoffs. It is also worth noting that working in game development involves frequent moving, this is justified by the fact that large studios, such as Electronic Art, have divisions in different cities. Thus, when applying for a job in Los Angeles, an employee can be transferred to an office in another city, for example, in Seattle.
Work in this industry is very associated with stress, and therefore emotional burnout and nervous breakdowns among workers due to constant crunch (overwork) are not uncommon, and many employees specifically rent hotel rooms near the office or even spend the night at work. As an example, employees of the Naughty Dog studio. In this regard, a full-time psychologist is available for employees of video game companies.
Table 2. Professions and salary levels in rubles [3]
In addition to the listed IT professions, the industry also employs marketing, advertising and public relations specialists, as in other companies.
Regarding wages, according to Vasily: “I can only assure you that wages are the most volatile part of the budget and you should always be ready to be flexible and quickly adapt to the mood of the labor market.» Game directors are responsible for salaries.
3. Share in the economy and the role of the state in the production of video games
The video game industry is part of the entertainment industry and therefore part of the tertiary sector of the economy, characteristic of economically developed countries such as the USA, Canada, countries of the European Economic Union, China and Japan. Also, many video game studios, such as 4A Games, have their offices in Cyprus, due to the fact that there are some tax breaks for IT companies that facilitate development, for the same reason there are many branches of large publishers and developers, such as Blizzard, EA, Ubisoft and others, in the Canadian city of Montreal.
Video game distribution occurs in two models: digital distribution and physical media. The advantages of one distribution model over another are quite clear. Digital distribution is more beneficial for players, firstly, because it is convenient. Secondly, amid the pandemic, this has become the only way to purchase video games. Thirdly, purchasing digital copies saves space in the room.
While purchasing games on physical media does not have any special advantages other than the aesthetic pleasure of the purchase. In this regard, chain stores such as GameStop are in great decline. However, such stores continue to exclusively supply figurines or collector’s editions.
There is no economic difference in purchasing one way or another, because the prices are equal. In the world they amount to $60, in terms of rubles – 4000. However, these prices are typical for the console market, where regional prices do not apply. In the late 1990s and early 2000s, regional prices were introduced for the Russian PC games market in order to suppress unlicensed distribution of products. This is due to the fact that the domestic market was unprofitable for publishers. As of 2021, regional prices remained only for indie projects; large publishers such as Electronic Art, Activision Blizzard, Sony, Microsoft, Nintendo and others abolished the regional price system, which caused a wave of discontent in the community.
As for revenue, it is influenced by many factors; in recent years, the video game industry has been most affected by the COVID-19 coronavirus pandemic, such that at the end of 2020 it grew by 20% and amounted to 179.7 billion. Doll. While the film industry grew by only 100 billion. Doll. Of course, this happened as a result of the proliferation of digital distribution stores, which allowed players from all over the world to purchase games without leaving home. However, the development itself dropped greatly during this period, as studio employees were transferred to a remote work format. In this regard, 2020 and 2021. are considered quite poor for AAA releases. In addition to the premium segment (PC, PlayStation, Xbox, etc.). d.) the mobile segment also showed significant growth: in percentage terms, even higher than premium, revenue from mobile games, excluding advertising, grew by 24% compared to 2019 and amounted to 87.7 billion. Doll.
States do not often interfere in the development process, and as a rule, there is no order for projects, at least explicitly. However, there is influence at the stage of publishing and distribution, for example censorship. As an example: in games with a setting* of World War II in Germany, the swastika is replaced with a more neutral image of Balkenkreuz. In China and Japan, developers are replacing the color of blood and kill animations with something more neutral (the exception is games from From Software). In Russia, censorship applies entirely to projects, for example, Call of Duty: Modern Warfare 2019 was not released in the Russian segment of PlayStation, due to the obvious anti-Russian agenda in the game. However, it also happens that the game itself enters the Russian market, but some content is cut out of it, for example: Call of Duty Modern Warfare 2, from which the mission “Not a Word in Russian” was cut out in Russian distribution due to the demonstration of a terrorist attack in one of the fictional Moscow airports; from more recent news, the ban in Russia of additions to The Sims 4: Wedding Stories, under the pretext of LGBT propaganda+.* But most of all, obscene language is subject to censorship, which is prohibited in Russian media, mostly deservedly, but sometimes this approach harms the artistic content of the game.
What determines the possibility of banning the game on the territory of the Russian Federation?? The root cause may be excessive cruelty, as in the game Manhunt, or an obvious anti-Russian statement, as in some games in the Call of Duty series.
However, censorship can be not only at the state level. For example, in view of recent world events, many video game companies are leaving Russia. By limiting access to its titles in the Russian Federation, for example, the Polish studio CD Project Red has limited access to games in the The Witcher and Cyberpunk series. Of course, this decision is politically motivated. In addition to simply limiting the distribution of the studio’s games, some publishers, Sony, went even further and limited Russians’ access to the PlayStation Store, while other distributors did not do this. However, the disconnection of the Russian Federation from the non-cash payment system also does not allow purchasing games on Steam and Microsoft Store.
Summarizing the above, I would like to note that the video game industry is conventionally divided into two stages:
1. Slot machine era
2. The Age of Video Games on Home Computers
And dividing history this way, we can say that the current industry is only 30 years old, which makes it one of the youngest and fastest growing industries. With a huge influence in the media sphere, but also highly susceptible to modern social trends such as SJW and LGBT+, which causes polar reactions in the community, due to the fact that publishers and developers do not focus on the target audience, indulging in modern trends.
As for the influence of the industry and its reach, it is the number of video game exhibitions, presentations, and press conferences that annually gather tens of thousands of people either on live broadcasts or in the audience.
However, despite the influence, the video game industry still remains quite isolated from the state, in Russia this is due to the fact that it is not taken seriously, but in the West, namely in the USA, the state directly cooperates with studios, helping in development and pushing its own ideas. This concerns development, but censorship of games in Russia is done quite strictly.
Getting into the industry is quite easy, because qualified personnel are always needed. As for Russia, video game development can provide a good income for ordinary employees, when a simple C++ Developer can earn more than 100 thousand rubles per month. However, this work is associated with a lot of stress and over time it loses any creative component, unless you are a game director.
Chapter 2. Geography of the Video Game Industry
§ 1 North American mega-region
The placement of studios of publishers and developers can be divided into 3 mega regions (Fig.8):
Each of them is unique in its own way and has its own value systems, and, of course, its own orientations towards sales markets. Thus, video game industry products from the United States are mainly aimed at the international market, while Asian games are focused mostly on the domestic market, and are often not even translated into Russian.
The North American mega-region is the most developed video gaming region. The headquarters of many major publishers are located in the United States, such as Electronic Arts, Activision Blizzard, Microsoft, Bethesda, Valve, Take-Two Interactive, Epic Games, Atari, Sony Interactive Entertainment, LLC and others. Studios are scattered across this country from New York to Los Angeles. Most often the location of the head offices is located in the same city where they were founded, but due to economic and technological considerations it can be moved to cities with more favorable taxation.
Start with Activision Blizzard. This is a public company, one of the largest video game studios specializing in the development and publishing of video games. Formed in 2007 through the merger of two studios: Activision and Vivendi Games, which included Sierra Entertainment and Blizzard Entertainment. Activision Blizzard currently consists of five divisions: Activision, Blizzard Entertainment, Major League Gaming, Activision Blizzard Studios and King Digital Entertainment. Headquartered in Santa Monica, California.
The CEO, from the moment of the merger until now, is Bobby Kotick. A very controversial figure among gamers and the press, who has been repeatedly criticized due to his politics. The public accused Kotik of sacrificing the quality of his products in the pursuit of profit in the long term.
However, this policy bore fruit for the company. By 2019, the company’s capitalization amounted to $36 billion., net profit: $1.5 billion., and turnover: $6.5 billion.
In 2022, Activision Blizzard was purchased by Microsoft. The transaction amount was $68.7 billion.
The second largest studio after Activision Blizzard is Electronic Arts,
in terms of revenue and capitalization, but ahead of Take-Two Interactive and Ubisoft. Founded in 1982 by Trip Hawkins, director of strategy and marketing at Apple Computer. Since its founding, it has been one of the first video game companies that has managed to popularize the professions of designers and programmers. Currently, the studio is known for at least forty-three titles, including:
· American McGee’s Alice;
· Medal of Honor and other game series.
In the community, EA studio products have been repeatedly criticized, as have the company’s policies. Over the past few years, Electronic Arts have released many controversial projects, such as the example of Battlefront 2, which, although it sold a large number of copies, was not without technical shortcomings and an internal store that imposed a Pay-2-Win system. Another example is EA Sports titles such as FIFA and Madden, which are released every year with minimal changes, but the FIFA series is one of EA’s most profitable franchises.
The company has more than 20 divisions located in different cities and countries. As an example, Moscow, Montreal, Vancouver, Baton Rouge, etc. d. Headquartered in Redwood City, California. The community’s favorite studio is Valve. Private company engaged in the development, publishing and digital distribution of video games. Founded in 1996 by Gabe Newell and Mike Harrington, former Microsoft employees. The studio’s very first project, Half-Life, brought Gabe Newell worldwide fame and his first money.
Valve studio differs from other large companies in the absence of a vertical hierarchy, which allows studio employees to have creative freedom and the right to independently choose the project they want to work on. Over the past years, the company has been actively developing its e-sports areas in Counter-Strike: Global Offensive and Dota 2, the digital distribution platform Steam, VR technologies, the portable gaming console Steam Deck and support for the studio engine – Source 2. The studio’s headquarters are located in Bolevue, Washington.
Epic Games is a private company specializing in the development and publishing of video games. It was founded in 1991 by programmer Tim Swinney and was called Potomac Computer System, in the same year it released its first game, and the studio was renamed Epic MegaGames and only a year after the release of the 3D shooter Unreal the company was renamed Epic Games.
The studio also developed a series of video game engines called the Unreal Engine, the current iterations of which are considered the easiest engines to master. In addition to creating video games, Unreal Engine 4 can be used in creating films or TV series, such as The Mandalorian. However, the studio’s most successful project was Fortnite, released into early access in 2017. In 2019, the game’s revenue was $1.8 billion.
Epic Games is also developing its digital store Epic Games Store (EGS), but in 2020 the store’s revenue showed no growth. The company is headquartered in Cary, North Carolina. And the studio itself has 8 divisions in different countries:
Epic Games Berlin
Epic Games Japan
· Epic Games Korea
Epic Games Seattle
· Epic Games Stockholm
· Epic Games Publishing
Epic Games Tools LLC
Take-Two Interactive is a publicly traded AAA video game developer, distributor and publisher founded in 1992 by Ryan Brent. Currently located in New York, with international headquarters in Windsor, UK. Fully owns development studios such as Rockstar games, 2K, Private Division, Ghost Story Games and Sociapoint. The studio’s products are extremely popular among the community; many games have remained top sellers for several years, for example GTA V.
For 2021, the company’s turnover amounted to $3.37 billion., net profit amounted to $589 million., and capitalization at the beginning of 2022 amounted to $17.8 billion.
§ 2 Asian mega-region
The second developed video game sector (Fig.10). Its distinctive feature is its focus on the domestic market. Not many projects are released worldwide, even fewer are translated into Russian. It is better to talk about this region in the context of countries.
The third largest video game market, behind the USA and China, is Japan [48]. A distinctive feature of Japanese video games is their emphasis on the domestic market, due to their external style and type of gameplay. They are distinguished from other industry products by their visual design, gameplay and interface. It is also worth noting a large number of niche games made based on anime. However, there are also large international releases. Several studios are responsible for them: Bandai Namco, From Software, Nintendo, Capcom and Konami.
Japan is also mistakenly considered the birthplace of video games. This is not entirely correct due to the fact that thanks to Japan the industry continued to survive. The industry itself originated in the USA.
Next China. is the largest market in terms of product turnover, for which it is nicknamed “the capital of the world video game industry”. However, it is difficult to fully call it the capital due to the fact that the products of the Chinese region rarely go beyond the Golden Shield and the most famous games at the international level are Genshin Impact, Honkai Impact 3rd. However, the most popular video games in China are MMORPG or online shooter games such as Cross Fire. There are a huge number of similar titles coming out and they are all similar to each other. However, Tencent games are particularly popular among the Chinese.
Tencent. The peculiarity of this company is that it does not itself create video games, as it is an investment holding company. It owns, in whole or in part, several American development studios, such as Riot (100%), Epic Games (48%) and a number of European studios: Supercell (84%), Funcom (100%), GluMobil (21%), Grinding Gear Games (80%) [34].
The South Korean video game industry is poorly developed and, like the Russian industry, is mainly aimed at developing MMORPGs. The most famous South Korean developers are: NCSoft, known as the developer and publisher of Linage and Linage2, and KRAFTON, known for the following titles: Subnautica and PUBG. For fiscal 2021, the studio’s annual income was: $280,559,100. Or 352,382,230,458 Korean Won. And the income of KRAFTON studio for 2021 amounted to 519,877,658,000 South Korean won, that is, 419,614,052 dollars.
§ 3 European mega-region
The most diverse video gaming region, from mobile game studios to media giants like Ubisoft. Also, some studios located in Europe, especially in the East, prefer to publish games that reflect the historical or cultural flavor of the region, for example, games in the S series.T.A.L.K.E.R., Metro or The Whitcher. Accordingly, such games sell well, not only in the CIS and Eastern Europe, but also in other countries (Table. 5).
In table. 6 shows the income of European developers. A distinctive feature of the entire European mega-region can be called a very closed financial policy. That is, there is no way to obtain information from open resources such as YaHoo!" or "Investign". The reason for this is the private nature of the studios, or their dependence on larger ones, for example 4A Games is a subsidiary studio of Saber Enteractive, but this studio is also private.
On the maps you can see that the presence of large developers is typical for the countries of Western, Northern and Eastern Europe. Also, this suggests that these cards have a well-developed tertiary sector of the economy, and a well-developed IT sector. However, some studios, for one reason or another, prefer to move their headquarters to Cyprus, this is due to tax incentives for IT companies, as in Canada. But one way or another, the number of development studios in Eastern Europe suggests that there are not just a lot of talented programmers, designers, artists and others like them.
Summarizing the above, it can be noted that development companies tend to locate their headquarters focusing on economic centers, since there is no direct link to natural resources, but there is a strong dependence on highly qualified personnel. However, not everything is so simple, because there are companies, such as Valve, that leave their headquarters in the cities where they were founded.
Regarding the success of the industry during the COVID-19 pandemic, it is safe to say that company revenues only increased during this period despite the fact that not as many products were produced as the community desired.
Also, many development studios, especially from European countries, publish their financial statements to closed sources, or they are published by the studio that owns it, which in turn do not divide income between studios, reporting only on sales volumes, and even then not always.
Chapter 3. Video game industry in Russia.
§ 1. The current state of the Russian video game industry.
The Russian video game industry is a topic that has been debated for the last 20 years. Some say that she is “dead”, others say that she is quite “alive”, but in her own way. This opinion was formed based on the fact that there were no large and high-profile single-player projects. In the period from 2000 to 2010, some projects were released that were aimed primarily at the domestic market, where they were successful.
Among these projects were:
2. IL-2 Sturmovik (2001)
3. Space Rangers (2002)
4. Ex Machina (2005)
5. Pestilence: Utopia (2005)
6. Dungeon Orderlies (2006)
Therefore, many agree that domestic game development is “dead”. However, not everything is so simple. Completely unnoticed by everyone around, domestic developers concentrated on developing mobile games, where they achieved enormous success, not only in Russia, but throughout the world. Thus, in 2020, the market for games for smartphones amounted to 933 million. Doll. with an increase of 25% compared to 2019. In 2021, the Russian Federation ranked fourth in the world in terms of the number of downloads of mobile games – 1.5 billion. For example, studios such as:
And, of course, due to the lull in the premium segment of the industry, indie developers are entering the arena. It is impossible to evaluate the development of the indie segment based on statistical data, since there are many, many independent developers, and new projects are released to the public on the Steam or Microsoft trading platform every month. Of course, different quality.
The most famous Russian Indie games:
3. Please don’t Touch Anything
This list is by no means complete, only the most famous in the community are listed.
Why is it still not correct to talk about the death of the domestic game developer?. While there have been no single-player games that have been successful on the international market from Russian developers, there are very big figures in the session multiplayer segment, for example, Battlestate games, which developed and independently released the game “Escape From Tarkov” into early access. At the moment, the average number of players in the game reaches 500 thousand. Thus, you can approximately calculate the minimum possible revenue from sales of the game, which is at least 800 million. rub. or 12.6 million. Doll.
However, even Battlestate games can’t compete with Gaijin Entertainment. The studio was founded in 2002 in Moscow. Currently known for the following projects:
1. War Thunder is a military arcade combat simulator.
2. Enlisted is a multiplayer shooter in the setting of World War II
3. Crossout is an arcade session multiplayer shooter in a post-apocalyptic setting.
As of 2020, the studio’s net profit was 2.465 million rubles, while revenue amounted to 131.316 million rubles [26].
In order to better understand the situation, Vasily Skobelev, a level designer, mentor and scientific editor, was able to answer my questions. To the question “What is the current state of the Russian video game industry,” he answered [27, 41]:
Russian industry enjoys a rather positive soft start for premium games. Moreover, from the developers’ side, everything looks quite ironic. AAA games require many years of development, even before announcement. There are currently a LOT of ambitious projects of various genres in development in the Russian Federation. Yes, there are freemium ones among them, but these are still AAA games. But you shouldn’t expect news on them before 2022, especially considering the current political situation. And people have been working on these projects for years, but the audience still believes that there are no games on the local market. Just wait, the process has been going on for a long time and the exhaust will be extremely noticeable. By the way, by known IPs too.
Vasily Skobelev
§ 2. Geography of development centers in Russia
Most development studios for both mobile and computer games are located in Moscow and St. Petersburg. However, small indie developers are scattered throughout Russia, in cities such as Ivanovo, Togliatti, Krasnoyarsk, Kaliningrad, Nizhny Novgorod, Volgograd, Vologda, etc. d.
Vasily was also able to reveal the screen of this aspect. To the question “How widespread is the development of video games as indie projects in the Russian Federation?. and “Big” developments?" he responded with the following: "Colossal. If you dig deeper, you will find that it is actually easier to find a job as a game developer in Moscow and St. Petersburg than in Edmonton or Madrid. The only difference is that in Madrid you can go to work directly for EA, but in our country it will more often be either a startup or an outsource studio working under contract for the same EA. In recent years, we have accumulated a huge number of cool specialists and, fortunately, they have begun to “leak” from outsource studios to projects that have their main development here. They will thus be able to show their skills in the primary IP or at least in one of the main development teams of existing franchises.".
The following are the largest video game distributors and developers in Russia.
The most famous company in Russia – 1C – is the largest IT company in the Russian Federation, founded in 1991. Specializes in software development for companies. The most famous are 1C: Enterprise, 1C: Tutor, 1C: School, under the auspices of 1C: Education. As for video games, since 2010 1C has acted mainly as a publisher and localizer. For these purposes, starting in 2008, it was purchased for 80–90 million. dollars, video game developer, publisher and localizer – Buka. In 2009, a merger was realized with the SoftClub studio. In 2010, a merger agreement was signed between 1C and Snowball Studios. However, the localization results of these studios disappoint the Russian video game community due to the underdeveloped dubbing industry.
A subsidiary video game studio of 1C, whose achievements include the development of such games as IL-2: Sturmovik, Men of War, Through the woods and Royal Quest.
SoftClub is the largest video game publisher and distributor in Russia. The company was founded in 1994 as an independent enterprise focused on the development and localization of video games. Thus, the first project localized by the studio was the game MediEvil 2, in 2000. In 2009, the studio announced a merger with media giant 1C and became their subsidiary. In 2010, SoftClub became the official exclusive distributor of Sony Computer Entertainment in Russia.
Buka is a leading publisher, localizer and distributor of video games in Russia. "Buka" operates on the global market and has its own international distribution network. Currently operating in more than 50 countries around the world and collaborating with well-known companies in the electronic entertainment industry: Valve, Deep Silver, Ubisoft, Square Enix, Alawar and others. Since 2014, Buka began publishing games and applications for mobile devices.
Mail.ru Group stands apart from the rest, mainly because it develops its own projects, the most popular of which is described below. Currently purchased by VK Company. The most famous project is Warface – a multiplayer shooter that is popular mainly among gamers in the CIS countries and is distributed using a free-to-play model. In this regard, the age of the game’s audience is 19–30 years old, people in this age category in the game are ⁓50%, the remaining 50% are people under 18 or over 30.
“In the second quarter of 2021, the Warface franchise reached 117.4 million players worldwide on all platforms and remains in the top three in terms of revenue among projects of the Russian company MY.GAMES.» [39] MY revenue.Games for the third quarter of 2020 amounted to 10,672 million. rub., which is 33% higher than in 2019 [39]. Of the 117 million players, approximately 24 million. accounts for PS4/5, Xbox One/Series, and Nintendo Switch consoles as of the second quarter of 2021 [39].
In table. 8 presents data on the income of some companies for 2021 with dynamics against the background of 2020.
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