1C: "The Retail Market in Russia Is a Huge Segment With Hundreds of Millions of Dollars"

Nikolay Baryshnikov, head of gaming department at 1C Company, tells about Russian retail market and what his department is responsible for.

Before the crisis of 2008 1C Company was the main Russian publisher. And then the games retail market collapsed. After that crisis a lot of things changed, you merged with “SOFTCLUB” and took up distribution, everything was quiet. Could you reconstruct the chronology of what happened with your games department from 2009 to 2016?

It’s funny to hear such phrases as “retail market collapsed”. Sure, some part of the market changed its focus to mobile gaming, MMOs, and digital distribution, but the retail is still here. It simply became more similar to the market of Europe and the US, where you can see console games on the shelves, not PC ones.

Nikolay Baryshnikov

At the moment, the retail market in Russia is a huge segment with hundreds of millions of dollars in turnover, despite the falling ruble.

Normally we do not post loud press releases about our achievements or huge sales figures. We sell huge amounts of games. Just like we did before. And now there are no more cheap jewel-box CD games, though it was quite common in Russia before.

Our publishing strategy also has changed a little – previously we worked with dozens of Russian developers, now there is few of them. We try to work with potentially successful projects only, and I do not care where the team is situated. For example, we released a “Men of War: Assault Squad” series (Digitalmindsoft, Germany), also we recently signed an agreement with a team from Columbia. It is not a well-known fact that we took part in Red Orchestra development, financing a team from the US when they had no money for the development of the first game.

We keep on launching big titles from Russian developers, like “IL-2 Sturmovik: Battle of Stalingrad”, “IL-2 Sturmovik: Battle for Moscow”. We are also working on some interesting projects like “Ilya Muromets”. Also, for the centenary of the First World War, together with RVIA (Russian military historical society), we released the game about the world’s first bomber, created by our legendary engineer Sikorski.

New “IL-2 Sturmovik”

Frankly speaking, I didn’t expect to hear that 1C is still publishing, that’s good news! Could you please tell us what today’s 1C Publishing is?

“1C” is a very large company. AS for the 1C Publishing, it was established in 2005 and has always been involved in the organization of our international sales, working with both retail distributors and with websites. So there is nothing new here. It’s just a branch of 1C.

As I see, 1C is now focused on the Western market (there is even no Russian version of the site). In general, the strategy isn’t clear. In what direction are you planning to move?

Our strategy was quite simple – to make popular products for the mass market. Russian gaming market is about 1% of the world one, so I think it’s strange to focus on Russian market only. We are proud of the fact that our “IL-2” series is sold worldwide. In fact, the sales distribution of our games are very similar to the distribution of users in Steam: Americans, Germans, British, French, and so on. Of course, our site is in English. In Russia, games are sold through our distributors “SOFTCLUB” and “Buka” in Eastern Europe through Cenega.

What projects are you looking for?

Various! Perhaps the only genre that does not interest us is sports games. It makes no sense to compete with EA and 2K. We have always achieved success by developing and distributing unusual projects: “Hard Truck”, “IL – 2”, “Space Rangers”, “Men of War”. I’m looking for such kind of games at the moment.

As a publisher, what do you offer developers? Do you finance the development? How tight do you work with a team on projects?

A little has changed in the publishing business. Yes, we offer financial support, assign a producer, do the promotion. We also offer localization and testing of our brunch Qloc from Poland. How tight do we work with developers? It depends on the team. A mature team needs a little help or even no interference. With an inexperienced team we have to help – sometimes to tell how to do, praise or scold.

The Watchmaker

Let’s step back from the previous question. You actively worked with developers, when there was only retail. You are working with them still, though everything turned digital. What changed in your approach? Did developers change?

I promote a new thesis when dealing with developers. In my opinion, before digital, publishing was a real challenge as it was hard to sell games. We had to reach out to thousands of stores around the world. The process of publishing and distribution was more difficult and expensive. Now we are surrounded by such wonderful platforms like Steam. Before that it was necessary to spend considerable money on promo, even for a hit game, now a cool game sells itself by virality. Therefore, I am ready to say “the developer can and should receive more”. I think that 1C has the most attractive conditions for game development studios and especially indie teams.

How much do you finance in good projects?

I have never thought of publishing as investments only. 1C is a large organization, we have the money. However, we ask ourselves: Do we believe in the project? What PnL can we build, what can we earn from sales? How do we share the revenue with the developer? Is there a common sense in a project? If mathematics is good, we take it. We had projects with zero upfront and projects on which we spent seven or eight-digit figures before the release.

What projects are preparing for the release?

Nearest are Assault Squad 2 and Renoir. In a few days, we will announce sequels of our super-successful games from previous years, including mobile versions. At the moment, more than a dozen products are set for release in 2016-2017 on PC, consoles, iOS and Android. We will show a dozen of games on GC in Cologne. Promotion strategy has changed. We will do ads, show materials of games just before the release. We want players to buy a game right after they watched a video or saw screenshots without waiting for six months.

My last question is about the Russian market. 1C was with the Russian gaming market almost from the jump You can easily keep track of milestones in the industry based on the history of the company. From this retrospective, in what state is the Russian gaming industry today?

The market is growing. However, we are still very small compared with US or China. Year after year more and more people play games. Probably two generations of kids have grown up with games as an essential part of life and culture. I believe that we’ll be fine.

Thanks for the interview!