First expert estimations of Russian Internet economy in the past year claim that online games are becoming a billion-dollar industry and will go on growing even regardless of lagging telecommunications development in some regions of the country.
Stepan Zotov, CEO for NIKITA ONLINE
In October of 2012 The Russian Association for Electronic Communications (RAEC) published a follow up report on a large-scale research of the economy of Internet services and content markets in Russia. Experts representing the leading Internet companies such as, for instance, Google were asked to fill in the questionnaire and give their vision of current situation on various Internet-based markets. It turned out that all the eleven studied markets (SMM, e-commerce, advertising, web development etc.) are growing with rather impressive rates. Digital content and games were listed among the major markets with the growth rate of 26-27% through the three year period (2010, 2011, 2012).
Online Games: Expectations and Reality
Almost at the same time with RAEC J’son and Partners Consulting came up with more specific study focused entirely on online games industry. The analysts built their estimations on data provided by the market leaders including our company NIKITA ONLINE.
It appears that in the Y2012 MMOs generated approximately $636.5 million which constitutes 67% of the entire Russian online games market ($950 million) and thus significantly surpassed social ($266 million, 28% market share) and casual ($47.5 million, 5% market share) games.
A year earlier J’son and Partners predicted that the value of Russian online games market would pass the $1 billion milestone. Well, possibly now as you are reading online games in Russia are exceeding the predicted $1 billion threshold.
According to J’son and Partners Russian online games market with its 28% growth rate is soaring faster than the global one (21% growth rate, $24.5 billion value).
Market Factors: Positive and Negative
Russian online games audience increased by 26% and now counts for 37.07 million unique users. By the Y2016 it is expected to exceed 56 million users and it’s mostly due to the fact that digital entertainment is becoming more and more popular among the adults. This tendency is observed not only by J’son and Partners but by our own survey as well.
In March 2012 NIKITA ONLINE conducted the research of its users’ demography and consumer preferences. Particularly we saw some considerable increase in the number of adult gamers: 30-39 y.o. age cohort grew from 8% up to 13% in 2012. Increase in financially solvent groups is always positive, especially for F2P games.
Smooth acceptance of online games would be impossible without solid ground for PC gaming: according to PricewaterhouseCoopers in 2010 Russian PC games market was the largest one in Central and Eastern Europe with more than $1 billion sales revenue. That is more than impressive in times of vast worldwide decline of PC gaming.
Now new games are the main market growth drivers, some of them can even attract those who never played before. There is some kind of snowball effect to it. The more people like to play, the more game titles hit the market: increase in the audience size results in increase of the number of games and so on.
Along with positive market factors there are also certain hindrances. One of those is a low level of the Internet penetration in Russian regions: the farther from Moscow you get, the slower and the more expensive connection you would have.
Though very likely that is just a temporary inconvenience because the Runet (a term for the Russian-speaking zone of the Internet) is widely recognized as one of the most actively developing WWW segments.
What further perspectives for Russian online games market can be seen from the height of the past year achievements? There is definitely no doubt about the growth of online games — it will go on. It’s a matter of a few years when this market becomes multibillion.
One of the distinct features of Russian online games market is its diversity — both Eastern and Western-style titles are welcomed here. The other is capability of engaging non-hardcore cohorts of audience in gaming. That is why the main growth driver for upcoming years will be new game titles. The market is still hungry for games.