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3Feb/11

Alexey Kostarev on the Publishing Business, the Russian Market and his Favorite Social Networks

By Sebastian Sujka

i-Jet Media CEO Alexey Kostarev

i-Jet Media is one of the biggest social game publishers worldwide. Until recently, it was one of the most underrated ones as well. Especially in the US i-Jet was flying under the radar as they do not have a dominant Facebook presence. What most people did not know is that i-Jet games dominate most other social networks. We talked to i-Jet CEO Alexey Kostarev, who was recently nominated for the Mashable Entreprenuer of the Year Award.

SocialGamesObserver: One year ago at the Casual Connect in Hamburg you said that you want to be bigger than Zynga. Do you see yourself on a good way?

Alexey Kostarev: I think we are on a good way and I think that we get closer to Zynga’s position. When I was talking about this I was mainly referring to the histories of our companies. There was a time in Russia in 2009 where we were in a similar position as Zynga’s position in the US. At that time we had a market share of about 95% on social games in Russia. Today our distinction and advantage is that our portfolio and the number of games developing groups are boundless unlike Zynga’s – we cooperate with detached developers, and have 40 unaffiliated teams with 5,000 game development specialists, and we expect to have these numbers doubled by the end of 2011. Another point is that we also know that when you operate on just one social network there is high risk: something in the relationship can happen or the rules can be changed which could kill the business. The way I see things right now, Zynga is also trying to operate outside Facebook. They start operating on Yahoo and on Mixi in Japan and I think this is the right strategy. As for us, we launched our partners’ games on 27 social networks as of December, and do not want to stop at 27.

SGO: Do you only focus on social networks or is this referring to toolbars, browsers and any kind of game sections on other websites?

Alexey: It just means that we are focusing on the distribution, and it is not that important for us whether we are putting games on a social network or any other website. The market for i-Jet Media is not limited to a hundred social networks, but potentially every website that wants to be social is our potential customer as a place for games we publish. To be social the website only needs two things: friends and social applications. With applications I do not only mean games, it depends on the web community, but it can also be ecommerce or other services that can be interesting for the users. We use our own technological platform – API – which helps developers distribute their games. Now we are continuing our innovative work and developing a unique solution which will allow us to distribute social games not only on social networks, but also on various websites across the Internet. It is to be finished in a couple of months, and I will be able to tell you more then.

SGO: You said that no social game developer can be successful on the long run with games on only one social network…

Alexey: Yes, and I have mentioned the most significant reason that developers should diversify their risks since the game market is growing and changing. For example you have a game that is a hit product in Germany or Poland or Hungary but if you place a similar product to other markets it could be only a Top5 or Top10 or Top20 game. This means if you do not get the brilliant results that you get on Facebook or another social network, you can get those results on other markets of European, Asian and American countries. Or if you have amazing results on Facebook you can get even increase your success worldwide. If you do not know where your game can be more successful, we know. Also, having the game widely distributed you accumulate revenues both from Facebook and others social networks, and it is already a great sum. This is the opportunity that we bring to developers.

SGO: Many developers just do not have the resources to spread their games on multiple social networks. What is the biggest problem and how do you solve it?

Alexey: When we started the publishing business the developer still made the integration himself. However, for example even if the developer has the resources to publish his game on three social networks, it is very difficult for him because it is at least three different versions of the game that he has to support and to manage. Consequently he needs three different product managements which is very expensive. According to our experience the result is that the developer is unable to manage anything successfully after one month without any help. You have to hold negotiations with every social network (most of them are not that open like Facebook or Vkontakte), do integration for every social network, get users, do the marketing, set the right prices, ensure the game is adapted under needs of certain audiences – there is a lot to do before you will get return. As for us, we have special professional teams of game producers, designers and marketers performing all the necessary work for games we publish.

SGO: You are live on 27 social networks. If you had to go give up all social networks but 3, which ones would it be?

Alexey: The core of our strategy is not to have any general preferences of which social networks to chose. It does not only depend on size or traffic of the social network. Sometimes you have a game that can be monetized better in Estonia than in Germany. It really depends on the product, the competitors etc which networks are the most valuable.

SGO: Operating on multiple social networks there must be many issues. If you had one wish to address to social networks, what would it be?

Alexey: If I had only one wish for all social networks, of course I would ask them to make i-Jet Media their exclusive provider of social games permanently! To be more serious, I would wish them to remain as closed as they are and not to lower their requirements to their partners and content. With social networks being more and more exacting, the market is getting rid of piracy, as well as improper content which is often called just ‘trash’. Thus the market will be more mature and professional.

SGO: Let’s talk about the Russian market. How much of a problem is piracy in Russia?

Alexey: It is not as bad as it was one year ago. There are less and less cases of piracy now. But if you have a successful game, chances are high that someone will copy it and publish it in Russia. i-Jet Media, Drimmi and other big players monitor games that are overly similar to existing games, and we leverage our good relationships with the networks to get these games removed from the network. So piracy still exists, but foreign developers, especially large and prominent ones, do not need to be afraid of that. The best way to defeat pirates is forestalling them. It means that if you have a good and successful game, you should not wait until someone launches its clone in another country. Just publish it everywhere.

SGO: There are 3 big social networks in Russia that many people do not really know. Can you briefly sketch them and their main characteristics? You may use inside knowledge…

Alexey: Vkontakte is a network where the audience is 18 years old and younger. It is the network for high school graduates and first year students, but most of all this is the network for the youngest social network users. There are also regional aspects – most users on Vkontakte are from Moscow and St. Petersburg. MoiMir@Mail.ru is the network which attracts many users from the regions of Russia, as well as CIS countries like Kazakhstan. Odnoklassniki was initially a network like classmates.com so it is a network for a rather older audience.

SGO: Is there any difference in monetization of the networks?

Alexey: Of course it largely depends on the product. Vkontakte was the network that started games and that is where the most money was earned at the beginning. Now things have changed and Odnoklassniki manages their audience better and offers many advantages such as the best monetization opportunities. For example, catalogue of games on Odnoklassniki is much better structured. If you take a look at the mobile version of Odnoklassniki you will see that you can play social games on the network with the mobile browser which is really cool stuff. We helped them realize this and we see that about 15% of all users play the games in the mobile browser. (m. Odnoklassniki).

SGO: Another question about the Russian market: How does the average Russian user differ from an average central European user?

Alexey: Well, Russian social networks differ from each other. I have recently mentioned some of their demographic features. ARPU of some of them can equal to the average European one, but in some cases it is a little lower. But the Russian social games market continues growing and people pay more and more. Of course the average Russian users have different social and cultural backgrounds. That is why they have different preferences both in terms of game plots, game features they pay for and payment methods. For example, games like Moon Wars were highly popular on Vkontakte but not a hit at all at Odnoklassniki. There are examples where special native Russian preferences are reflected in the games. One example are fishing games. Russians like to fish and they are ready to pay for their fishing games.

One Response to “Alexey Kostarev on the Publishing Business, the Russian Market and his Favorite Social Networks”

  1. [...] certainly affect the popularity of games genres across countries and their social networks. Fishing games in Russia, as pointed out by Alexey Kostarev, or resource management and strategy games in Germany are common [...]

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