Results of 2021: Roman and Kirill Gursky from GEM Capital about the main thing for the year
We continue to summarize the results of 2021 together with top managers and experts of the gaming industry (and related ones). Next up is an interview with Roman and Kirill Gursky, the leaders of the gaming direction of the GEM Capital investment group.
How did 2021 go for the company?
Roman: Any investor is first of all proud of the success of his projects. We started the year by announcing the news of Tencent‘s entry into our portfolio company Mundfish, the developer of Atomic Heart. GEM Capital together with Anton Yudintsev (co-founder of Gaijin Entertainment) became the first investors of the studio in 2019, and we were pleased to welcome the world’s largest profile corporation as shareholders.
Kirill: Also in September of this year, the Pathfinder: Wrath of the Righteous game from Owlcat Games was released, which we were an investor in. The project became the second Russian product in history to receive the main feature on Steam. In addition to, of course, excellent financial indicators, the game can also be proud of the love of players and recognition from the professional community. It was very nice to see that the project was nominated for the Golden Joystick Awards 2021 in the category “PC Game of the Year“.
Roman: GEM Capital itself also has something to be proud of. According to the InvestGame analytical agency, we took 11th place in the ranking of international funds in terms of activity in the gaming market for 9 months of 2021. In the first 3 quarters of 2021, GEM Capital invested in 6 companies. GEM was the leading investor in 5 transactions for $8.3 million. It is planned to close several more deals by the end of the year.
Kirill: I would also add no less important events for us this year: Weappy (developer of This is the Police), Unfrozen (developer of Iratus: Lord of the Dead), VEA Games (developers of Nikoderiko: The Magical World) and the social network for gamers Gameram, founded by the former head of Pixonic Philip, joined our gaming family Gladkov. As a result, at the moment our investment company has one of the largest gaming portfolios in Eastern Europe and the CIS.
Roman: A landmark event of the outgoing year can also be called the launch of The Games Fund (TGF), one of the founders of which is GEM Capital. TGF has successfully launched its activities and has already invested in 6 mobile gaming companies.
What event or trend of 2021 do you consider central within your niche?
Kirill: The issue is very complex. I think every participant in our market will highlight something of their own, because as many people, so many opinions. First of all, I would like to highlight the successes of our developers, recognized by the international community. Two domestic games received nominations for prestigious awards at once. Loop Hero is nominated for the best indie game at The Game Awards and, as we have already mentioned, Pathfinder: Wrath of the Righteous is nominated for the Golden Joystick Awards 2021 in the PC Game of the Year category. This speaks to the talent and great prospects of our region and once again confirms that in 2019, when the GEM Capital gaming direction was founded, we correctly formed our strategy.
Novel: I would also note the victories of Russian-speaking teams at international esports tournaments. Team Spirit became the champion of The International 10, and NaVi won the PGL Major Stockholm 2021 and BLAST Premier: Fall Finals 2021. These events have definitely increased the interest of the general public in domestic esports. I think thanks to this, in the long term we can expect an influx of even more young people into our industry and an increase in the quality of personnel.
Kirill: The central event for the international mobile market was the court decision on the dispute between Apple and Epic Games, which obliged Apple to change the rules of the App Store and allow third-party developers to add links to third-party payment systems to applications.
Romin: And, of course, it is impossible not to highlight the output of Nexters on NASDAQ. This is perhaps the most important event for the domestic mobile market. The guys are great fellows, we congratulate them from the bottom of our hearts. We hope that in the near future even more logos of companies with roots from our region will decorate Times Square.
Kirill: We are also witnessing the growing struggle of large corporations for the VR market. Following Apple’s purchase of NextVR in 2020, in the second half of 2021, the acquisition of the manufacturer of Pico VR headsets by the Chinese giant ByteDance followed. Also, the head of Meta Platforms (ex. Facebook) Mark Zuckerberg (Mark Zuckerberg).
Roman: Summarizing, we see a huge interest from investors, large corporations and the general public in the gaming market and near-game stories. According to the InvestGame analytical agency, 667 transactions worth $58 billion were closed in our core market in 9 months of 2021, which is 2.5 times more than the same period in 2020 in terms of investment volume. The volume of investments in gaming is growing, and we are very glad that we entered this trend before the current hype. In general, as we expected, the market is actively growing, new ambitious studios are being formed in the CIS, which, we are sure, will still make themselves known on the world stage.
What will be the stake in the development of the company in 2022?
Kirill: We will sum up the results of the year closer to its end, but in general, we are already seeing quite positive indicators on investment profitability and clearly understand that in 2022 and beyond we will continue to follow the strategy we have chosen. We are sure that next year developers from Russia, Ukraine and Belarus will delight gamers with even more cool, unusual and interesting projects. Our main efforts will be aimed at entering new studios in the CIS, significantly expanding the investment portfolio and providing comprehensive support to those teams that previously became members of the GEM family.
