In 2014, i-Free earned $16 million on games

Some time ago, the i-Free group of companies announced in its results for last year that in 2014 its sales volume decreased by 48%, and net revenue by 29%. We asked Kirill Petrov, one of the founders of the group, how its problems affected the i-Free gaming business.

Last year turned out to be far from easy for the company. According to its representatives, the main problem was the introduction of amendments to the law “On Communications”, which tightened the conditions for the provision of additional SMS services. This resulted in a 60% reduction in the market in which the group was actively working.

To minimize losses, i-Free was reformed, as a result of which the staff decreased by 40% to 380 people. In particular, some game studios that were part of the group were disbanded. Among other things, Kirill Petrov and I talked about this.

The official press release reports that “separate game studios” were closed. What kind of game projects had to be abandoned and why?

Kirill Petrov
Games are a very large but very competitive market.

Moreover, the competition here has increased so much recently that fewer and fewer teams manage to repel their projects, and many companies have had to leave the market. We tried to come from different sides – in particular, we did in-house developments, invested in both large companies and small projects. Some of them have failed, others have been successful, some have not yet gained full strength.

In 2011, we invested in the Russian division of Creat Studios, creating on its basis, together with its founder Anton Petrov, the Frontier company. Creat Studios is one of the veterans of the Russian gaming industry: she appeared back in the early 90s – at first she specialized in 3D, and then she started playing games. In the 2000s, the company worked in the console market and implemented many successful projects for Sony PlayStation and PSN.

Together with the Creat Studios team, the rights to create mobile versions of Creat Studios’ own titles were transferred to Frontier. Unfortunately, at that time we also had insufficient experience in publishing, and it was difficult for the Frontier team to reorient from premium games to modern f2p mobile products. As a result, they launched several new projects and adapted a number of old Creat Stuidos titles for mobile.

In general, it turned out to be not the most successful experience, but it cannot be called unsuccessful either: although most of the Frontier projects did not show the expected results, the Mushroom Wars franchise, nevertheless, turned out to be very profitable for us. Now, with the active support of Anton, we continue to develop this project already within the framework of the Zillion Whales development team and are confident that it has excellent prospects.

After the successful launch of Mushroom Wars Original, the game Mushroom Wars: Space enters the market! It can already be downloaded on iOS, but we plan to launch the main commercial launch in May. Mushroom Wars: Space! It is a prequel to Mushroom Wars 2, work on which is in full swing today. We expect the release of this game on all platforms, including PC and consoles, in the fall, and in the summer we will open the alpha version for PC users.

We have intentions to return to a number of other Creat Studios titles, for example, Cuboid and Magic Orbz. Among other projects in which we see good potential is Evilibrium: this card butler, created by in–house studio Ork Works, went very well, and we hope for its success.

Among those projects that we abandoned is a project jointly with AMT Games: after a while we left this business, because it was bought out by the team that worked on it. Our paths also diverged with the Laika Boss team, who created the very first version of the Road Smash game, which has been downloaded by more than 20 million people to date. We made a number of games on our own, and some of these projects were also closed.

What model of interaction with game studios have you come to?

Now Zillion Whales is working as a publisher with external studios whose product is already ready or is at the final stage. But our main bet is on product development inside – as in the case, for example, with Mushroom Wars. Herocraft has a similar approach, although they work much more with external studios and at different stages. But Aigrind does everything by itself, and sometimes attracts whole teams for this, but there we are talking, first of all, about online games, where such an approach is justified.

Do not tell us how, in general, the i-Free gaming division looks like now. Which studios are included in it and what do they do?

Today, several companies and teams are engaged in the gaming direction in the i-Free group at once:

Zillion Whales, whose specialty is publishing and producing games. Here we are making Evilibrium, the Mushroom Wars line, Plastiland, Road Smash have recently been published, and we are planning to publish six more games by the end of the summer. Basically, these will be fairly simple casual projects plus our headliner strategy Mushroom Wars: Space!.

Herocraft is one of the veterans of the mobile games market: they started on the first j2me phones. Not many companies managed to successfully move into the segment of games for smartphones, and for Herocraft it was also not an easy path. Now the company is growing, releasing games not only in the mobile environment, but also on Steam, there are separate projects in social networks. Among the latest high–profile launches is Warhammer 40,000: Space Wolf. By the way, work on this game continues, and there will be many more releases and improvements. The main team of Herocraft is located in Kaliningrad, but they have studios in other cities of Russia, as well as in Ukraine and Belarus. And this year they will delight the market with excellent new titles.

Aigrind is a company created by Herocraft founder Andrey Petrov together with his partners. Even then, in 2007, their main goal was MMO games for smartphones. It took years to dive into this market, but in the end, today it is a very successful team. Its flagship project is the mobile MMORPG Warspear Online, but they are also working on other products.

i-Free China is a company headquartered in Beijing, specializing in publishing international and Russian games in China.

inApps is a company that cooperates with mobile phone manufacturers in the field of updating and pre–installing products, mainly mobile games, on smartphones. The inApps team is also represented in China and works with the largest factories producing mobile devices.

TakeAway Games is a studio in which we invested together with our partner, the Estonian company Creative Mobile. Now they are just in the release period, and it’s too early to talk about the results, but we really hope that their games will be a success.

Motion Entertainment is a small but very energetic team that created the games First Wood War and Road Smash 2. Now they are working mainly on Mushroom Wars 2.

MoneyTapp is another joint project with Creative Mobile, a company engaged in advertising mediation. The MoneyTapp platform allows developers to maximize the effect and revenue from advertising in their games. The built-in SDK Mopeutarrots access to advertising offers from hundreds of advertising networks around the world, and the internal logic of the solution determines at what moment and in which country there are the best advertising offers, not only ensuring the full involvement of the entire inventory of the developer, but also filling the inventory with the most profitable advertising blocks for the developer.

As for the income of the i-Free group from the production and publishing of games, last year it amounted to about $16 million (the total income of the group for the same period was $130 million, – approx.editorial offices).

In an interview with Roem, you noted that the Chinese division of i-Free has successfully released several gaming products. What kind of games are these? How much did they bring to the company in 2014? How much, in general, did gaming companies bring to the i-Free group last year?

As I noted in an interview with Roem, in 2013, the sales volume of games published by us in China exceeded $ 5 million, but in 2014 it decreased significantly, we lost several products from our portfolio. Since September, we have been growing again, but we have not yet reached the previous indicators. Among the products that demonstrate excellent dynamics, for example, MadSkills Motocross 2 from the Swedish company Turborilla: it entered the top 5 racing games in more than ten Chinese appstores.

In addition, now i-Free China is also engaged in the creation of tool platforms for developers. Just imagine how many pirated copies of any successful game can be sold in China before the developer turns his attention to this market! That’s millions of copies, and that’s the developer’s lost money. One of the technological solutions of i-Free China successfully copes with this problem: by embedding it in any product before release on the main appstores, the developer will be able to earn money, including on Chinese pirated copies of his game, which, by the way, will even help the full launch of this game in China.

Thanks for the interview!