GDEV isn’t a widespread identify in gaming nevertheless it has one of many trade’s most success cell recreation franchises in Hero Wars.
The corporate’s Nexters subsidiary has seen Hero Wars generate greater than 190 million whole downloads and $2 billion in whole bookings because it was launched in 2016. That helped propel Nexters, which went public in 2021, to $480 million in revenues in 2022, up 11% from a yr earlier. Income development is slowing as cell recreation corporations cope with new dynamics and a combined world financial system.
I spoke with Anton Reinhold, the COO of worldwide gaming holding firm GDEV, on a current journey to Lisbon, the place the corporate introduced its Hero Wars Universe growth past gaming. It’s launching an animated film, comedian e book and extra within the newest transfer to reap the benefits of transmedia.
The corporate is working on separate Hero Wars video games for cell and desktop, titled Hero Wars: Alliance and Hero Wars: Dominion Period, respectively. And it launched a Google Play recreation, the action-RPG recreation Deploy Heroes in alpha type. And it’s working on hybrid informal video games akin to Hero Wars Survivor, Dungeon Escape, and Wendy’s Taverna, which delve into the Hero Wars characters’ tales by way of sequels, prequels and spin-offs.
It additionally launched Raging Blades, a comedian e book accessible on Webtoon, the most important on-line comedian e book platform, and produced by Mild Comedian Studio. And its animated movie is being produced by Primal Form, a studio behind сinematic films for Apex Legends and League of Legends. And it opened Wendy Store, a net retailer of distinctive gadgets, unique provides, and particular promotions.
Reinhold stated it was a pure evolution of the characters and tales crafted for Hero Wars. GDEV has different subsidiaries like Cubic Video games and Dragon Machines. We talked about each the challenges and alternatives dealing with GDEV and its divisions. Among the many challenges: the corporate confronted increased working prices because it relocated individuals out of Russia within the second half of 2022. Now it’s based mostly in Limassol, Cyprus.
Right here’s an edited transcript of our interview.
GamesBeat: And the most recent, how’s it going? Something particularly you wished to replace on?
Anton Reinhold: Yeah, really, right here within the Internet Summit, I’ll be speaking about multi-platform video games, how gaming’s future is in spreading multi-platform. So, type of we’re all in a cell disaster. The brand new video games don’t hit the top-grossing 100 that a lot as they used to previously. And the UA isn’t as straightforward because it was once for everyone. So, the capital isn’t that accessible because it was once.
And we’re at Nexters eager about what have we constructed earlier than and what really will help us of the property that we have now created might transfer us ahead and which trajectory we should always take. And we very a lot imagine in constructing gaming tales and gaming manufacturers. Now we have invested a lot in Hero Wars earlier than, so it’s a big model with so many impressions. We’ve proven our advertisements so many instances to all of the customers, so a lot of individuals do acknowledge our predominant character. And we determined that we might construct upon that and we might perhaps go there as individuals love our recreation.
Now we have Hero Wars that’s on cell and we have now Hero Wars on desktop, so on the Internet. These are two separate video games, so one is a bit extra core recreation and the opposite is a lot extra informal, so individuals don’t learn that a lot the story of the characters. We attempt to present, give to faucet, to not present a lot of time, to not delve into the story like studying texts and texts concerning the heroes.
Quite the opposite, our gamers try this on the Internet, so principally on the Internet recreation. In order that they go forward and benefit from the story of the world, of the characters and the way all the things is interconnected.
However nonetheless we see that by way of totally different unwanted effects, we see that the advertisements that we present on cell alone are efficient by way of buying customers and bringing them to the platform, however there may be additionally this rising impact that it helps to construct the model on the Internet, so individuals do acknowledge this recreation.
As soon as we seen that, we determined that perhaps there’s something to video games on cell aside from, you understand, purchase a consumer, monetize consumer, go forward, purchase one other consumer and go forward monetize the consumer.
We’re considering of constructing a franchise of Hero Wars, so we see that there are very profitable tales like Offended Birds, for instance. It’s a profitable franchise, a very recognizable model with these Offended Birds.
And we at the moment are making an attempt to check the water to see what sort of issues we might do by way of this Hero Wars universe, how we might broaden it. We’re eager about making the historical past of every of the heroes deeper. Now we have began off with a comedian e book on Webtoons, and it performed off fairly nicely, so we see that there’s a recognition among the many group. So our gamers like the sort of format, and the Webtoons have responded additionally very curious about it.
GamesBeat: The story sounds acquainted to me. I keep in mind interviewing Kent Wakeford from Kabam, a COO method again when, and he was speaking about how they noticed this sample with iPhone video games and a lot of the income was all concentrated within the palms of the highest 10 video games or so. It was beginning to really feel extra just like the console recreation market now.
You understand, the brand new video games that had been arising, they used to do like a dozen video games a yr or one thing like that, after which they switched to do perhaps one recreation each couple of years, and so they got here up with Marvel Contest of Champions. That they had a big model related to it, and that type of recreation went to primary, and it kind of arrived on the proper time when the market was altering in that market. So it sounds nearly just like the Apple music had a story.
Reinhold: Yeah, yeah. See, we’re not making an attempt to make use of anyone else’s IP. We have already got an IP, and we wish to construct upon that. So principally, we see that we have now invested like so many lots of of hundreds of thousands of {dollars} into the UA, so we have now already one thing that’s recognizable.
So why not use that to construct new video games, new cartoon films, for instance, for our YouTube viewers that may very well be very fascinating for gaming. So we all know that our characters are very likeable, and you’ll really construct a entire story round them. So a few of the biggest names within the free-to-play market say Sweet Crush Saga. They don’t have so many characters within the recreation, and we do. So our recreation relies on characters. So this is the reason we wish to type of wrap this up.
GamesBeat: Does that sound like we’re in a cycle that repeats itself?
Reinhold: In fact, after all. I see additionally a cycle in cell market which is type of much like the Fb recreation. So as soon as the platform was launched, it was longing for customers, it was longing for content material. And the platform was feeding their customers the gaming content material, and for recreation builders, it was like free customers.
In order that they had been constructing very low cost, however having many, many hundreds of thousands of installs that had been free, that had been natural. After which all of it turned like a pink ocean with the UA with very excessive costs for each consumer, after which all of it went to cell. And cell type of has the identical sample. So now it’s like a pink ocean, and being solely on cell on this pink ocean, it’s actually laborious to beat these high 10 video games and supply one thing new.
As a result of they’ve tons and tons of content material. They’ve invested a lot cash into constructing each recreation, much more than any AAA title that goes in console. For instance, Playrix has, or say, I don’t know, every other firm perhaps has like 500 builders constructing only one recreation. And the way might the brand new developer beat them?
GamesBeat: What number of are there on your workforce as nicely, and the way a lot does it get devoted to one thing like Hero Wars?
Reinhold: I believe round 400 individuals at Nexters work in Hero Wars, each in advertising and marketing and the event workforce. So it’s additionally a big workforce.
GamesBeat: And what number of all collectively are there?
Reinhold: At Nexters studio there are round 600 individuals.
GamesBeat: So how do you make use of the opposite 200? Are they unfold throughout a lot of video games?
Reinhold: Now we have one other recreation that’s a farming recreation with adventures. So we have now these two streams. Now we have the Midsport stream with Hero Wars as the primary flagship product, and we have now the informal streams. We used to have a informal recreation of the identical sort on Fb and on cell.
We noticed that it’s very appreciated by the viewers, however again then the monetization was a bit off.
And we have now constructed a recreation that’s known as Island Hoppers. It’s additionally each on cell and on net. So the progress is interconnected. When you progress on net, you possibly can go on cell and play there and return. These are two predominant issues that we do, so the Hero Wars and Island Hoppers.
Now we have an R&D division as nicely that’s in search of new video games, exploring new genres.It’s constructed principally on a small cell workforce foundation, like 5 – 6 individuals, working on getting a small prototype that they fight on Fb and see the way it works. After which they go to retention one take a look at.
In order that they do the retention day one. They have a look at the benchmark. If it was overwhelmed, they transfer to the fifth stage. If not, then they’ve a few tries to make it higher, after which they only throw it away and go subsequent.
GamesBeat: How did you guys do so far as pulling individuals out of the areas? Did you guys have individuals that you just needed to transfer? Are all of them in several international locations?
Reinhold: Yeah, nice query.We had a fairly big workforce based mostly in Russia earlier than the struggle. As soon as the struggle began, we determined that we wished to maneuver all people out. We didn’t wish to have any individuals positioned in Russia. Now we have closed all our subsidiaries there and have moved. So we have now opened a few places of work. The most important one now’s in Armenia. That’s a former Soviet nation. And one other one is in Kazakhstan. And we have now acquired a few European places as nicely that aren’t but places of work, however we have now acquired subsidiaries there after we are eager about opening places of work there.
GamesBeat: And the headquarters is?
Reinhold: It’s in Cyprus. And so we have now moved a part of the workforce to Cyprus and the remainder of the workforce to Armenia and Kazakhstan. And naturally, round 10% of the workforce is now various in several international locations, like remotely in several international locations, like in Serbia, within the U.Okay., in Germany, in Georgia, in all places.However no one, no one, so all people, we have now taken all people out. In fact, it value us a fortune.
GamesBeat: Did a lot of individuals go away the corporate simply to remain as nicely, or did you really handle to get most of them out?
Reinhold: Now we have let some individuals go final yr. So we determined that the plans for the expansion by x-ing the variety of big video games that we have now isn’t going to occur. And we have now let go round 25% of the corporate. However for essentially the most half, we have now managed to maintain the core workforce. In fact, there have been a few circumstances when individuals didn’t wish to go away and so they simply stayed in Russia.
GamesBeat: After which, I suppose, greater corporations are even saying that they aren’t going to do new video games anymore.
Reinhold:They don’t seem to be what?
GamesBeat: They don’t seem to be actually doing new video games anymore. Like Warner Brothers, perhaps the largest instance of that, the place they stated, no, we’re simply going to do our franchise video games. We aren’t going to speculate so closely into new video games. Now we have no manufacturers proper now. So it looks like you’re going in that path and you aren’t going that far. Since you nonetheless are creating some model new issues.
Reinhold: I might say that Hero Wars for us is a nice IP already. And principally, constructing new methods to play our characters, so construct new gameplay across the previous IP, that’s one thing that we expect might work for us. So principally, we’re utilizing the IP as a nice theme.
That could be very vast. It’s a generic fantasy recreation with which Interi connects totally different sorts of heroes from totally different worlds. You may have a Robocat and you’ll have a medieval knight that may blast swords from the sky. They reside in the identical world. So principally, you are able to do an idle tycoon on this setting or you are able to do a runner on this setting. And it might type of broaden on the story and never kill the story.
GamesBeat: Do you’ve gotten extra flexibility with the IP?
Reinhold: Yeah, we imagine so. It may very well be additionally a path to purchase some IPs which can be already on the market and to make use of them for our R&D initiatives. We’re exploring on that as nicely.
GamesBeat: You guys haven’t accomplished a lot of that earlier than?
Reinhold: What?
GamesBeat: Shopping for different corporations?
Reinhold: We did. Simply earlier than the struggle began, we have now closed a few offers. The most important one was the acquisition of Pixel Gun 3D. That’s a very big on-line cell shooter recreation in pixel setting. It’s the quantity three pixel recreation on the market after Minecraft and Roblox. It’s actually big and the viewers is big. We’re working that recreation and we’re going to launch on Steam in a few months. Now we have over 150,000 wishlists, add-ons.
We even have bought lower than 50% stakes in a few corporations like RJ Video games and corporations in Royal Ark. They do mid-core video games. Now we have expertise and we’re constructing relations with the builders proper now.
GamesBeat: I simply surprise if the market stays this fashion for a whereas now or if there are nonetheless a lot of modifications to return?
Reinhold: You imply the cell market?
GamesBeat: Sure.
Reinhold: From what I see, the revenues are going barely down. The downloads are going barely down. We see this yr that hyper informal doesn’t work anymore and that is a large change. Mainly, we’re dropping placements by way of selling our video games. This isn’t a straightforward state of affairs.
If we add on the hybrid informal video games to this combine, they aren’t solely offering the advert placements for our video games, however they’re additionally competing with the video games greater than themselves for the advert impressions. This makes the atmosphere a lot extra aggressive and the margins decrease on condition that the financial system isn’t in a nice form. Mainly, individuals don’t have that a lot cash to spend on video games.
This tells me that the market gained’t be straightforward subsequent yr. I believe that everyone needs to see the following big factor on the market. Our take on that is that the franchise is constructed from cell and unfold round into totally different different platforms and media may very well be this new big factor. What do you suppose?
GamesBeat: A lot of it, I believe, individuals have stated was financial system pushed. After we had extra financial downturns taking place, that was the place cell was impacted as a result of these followers weren’t as dedicated to the IPs as they had been.
In order that they misplaced extra customers, I suppose. They gained a lot of customers in the course of the pandemic and so they misplaced a lot of customers too. Whereas the console video games didn’t lose as many customers. Or loyal console recreation customers.
It appears like we have now one other yr of that to undergo. The place there’s more durable financial conditions for gamers.
So then you definitely would logically have the entire trade preserve dropping for a whereas in order that the financial system improves. That seems like a troublesome operation.
Reinhold: Completely agree with you. What we see on our net undertaking, which is type of beneath the hood as a result of there usually are not many sources of monitoring the competitors from exterior the corporate.
We see that we’re not dropping as many customers because the cell market as a entire and that’s our cell product. So principally our participant base stays actually loyal. We’re constructing on high of that, so making an attempt to offer as a lot worth as we will to these customers. Present them with new gameplay, new issues to spend their time with. So that is type of why we expect that constructing one thing extra than simply an app on the cell platform may very well be a flip.
GamesBeat: Do you see this as extra funding in reside operations or do you see it as one thing totally different? I suppose it’s extra funding in what you would possibly name a transmedia.
Reinhold: That is how we give it some thought.
GamesBeat: On the similar time, is reside operations nonetheless getting a lot of funding?
Reinhold: In fact. Stay ops has been a precedence and stays in focus. Constructing seasons, constructing one thing for gamers to spend time on in-game, that’s very essential proper now. In order that they have to be entertained.
GamesBeat’s creed when masking the sport trade is “the place ardour meets enterprise.” What does this imply? We wish to inform you how the information issues to you — not simply as a decision-maker at a recreation studio, but additionally as a fan of video games. Whether or not you learn our articles, hearken to our podcasts, or watch our movies, GamesBeat will allow you to be taught concerning the trade and revel in partaking with it. Uncover our Briefings.