GDEV makes an enormous wager on Hero Wars Universe

GDEV isn’t a standard title in gaming but it surely 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 complete downloads and $2 billion in complete 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 progress is slowing as cell recreation firms take care of new dynamics and a combined international economic system.

I spoke with Anton Reinhold, the COO of worldwide gaming holding firm GDEV, on a latest journey to Lisbon, the place the corporate introduced its Hero Wars Universe enlargement past gaming. It’s launching an animated film, comedian e-book and extra within the newest transfer to benefit from transmedia.

The corporate is engaged 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 kind. And it’s engaged on hybrid informal video games similar to Hero Wars Survivor, Dungeon Escape, and Wendy’s Taverna, which delve into the Hero Wars characters’ tales via sequels, prequels and spin-offs.

It additionally launched Raging Blades, a comic book e-book obtainable on Webtoon, the most important on-line comedian e-book platform, and produced by Gentle Comedian Studio. And its animated movie is being produced by Primal Form, a studio behind сinematic motion pictures for Apex Legends and League of Legends. And it opened Wendy Store, an online retailer of distinctive gadgets, unique provides, and particular promotions.

Reinhold mentioned 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 folks out of Russia within the second half of 2022. Now it’s primarily based in Limassol, Cyprus.

Right here’s an edited transcript of our interview.

GamesBeat: And the newest, how’s it going? Something particularly you needed 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, sort 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 up to now. And the UA shouldn’t be as simple because it was once for everyone. So, the capital shouldn’t be that accessible because it was once.

And we’re at Nexters fascinated about what have we constructed earlier than and what really might help us of the property that we’ve created may transfer us ahead and which trajectory we must always take. And we very a lot imagine in constructing gaming tales and gaming manufacturers. We now have invested a lot in Hero Wars earlier than, so it’s a massive model with so many impressions. We’ve proven our advertisements so many instances to all of the customers, so lots of people do acknowledge our primary character. And we determined that we may construct upon that and we may possibly go there as folks love our recreation.

We now have Hero Wars that’s on cell and we’ve Hero Wars on desktop, so on the Internet. These are two separate video games, so one is a little more core recreation and the opposite is much more informal, so folks don’t learn that a lot the story of the characters. We attempt to present, give to faucet, to not present a whole lot of time, to not delve into the story like studying texts and texts in regards to the heroes.

Quite the opposite, our gamers do this on the Internet, so mainly on the Internet recreation. So that they go forward and benefit from the story of the world, of the characters and the way every part is interconnected.

However nonetheless we see that by way of totally different unintended 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’s additionally this rising impact that it helps to construct the model on the Internet, so folks do acknowledge this recreation.

As soon as we seen that, we determined that possibly 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 pondering 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 really 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 may do by way of this Hero Wars universe, how we may increase it. We’re fascinated about making the historical past of every of the heroes deeper. We now have began off with a comic book e-book on Webtoons, and it performed off fairly properly, so we see that there’s a recognition among the many neighborhood. So our gamers like this kind of format, and the Webtoons have responded additionally very occupied with it.

GamesBeat: The story sounds acquainted to me. I keep in mind interviewing Kent Wakeford from Kabam, a COO means again when, and he was speaking about how they noticed this sample with iPhone video games and a whole lot of the income was all concentrated within the fingers of the highest 10 video games or so. It was beginning to really feel extra just like the console recreation market now.

, the brand new video games that had been developing, they used to do like a dozen video games a yr or one thing like that, after which they switched to do possibly one recreation each couple of years, and so they got here up with Marvel Contest of Champions. That they had an enormous model related to it, and that sort of recreation went to primary, and it type 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 narrative.

Reinhold: Yeah, yeah. See, we aren’t making an attempt to make use of any person else’s IP. We have already got an IP, and we wish to construct upon that. So mainly, we see that we’ve invested like so many a whole bunch of thousands and thousands of {dollars} into the UA, so we’ve already one thing that’s recognizable.

So why not use that to construct new video games, new cartoon motion pictures, for instance, for our YouTube viewers that could possibly be very attention-grabbing for gaming. So we all know that our characters are very likeable, and you may really construct an entire story round them. So among the best 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 is predicated on characters. So that is why we wish to sort 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 sort of just 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.

So that they had been constructing very low cost, however having many, many thousands and thousands of installs that had been free, that had been natural. After which all of it grew to become like a pink ocean with the UA with very excessive costs for each consumer, after which all of it went to cell. And cell sort 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 arduous 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, another firm possibly has like 500 builders constructing only one recreation. And the way may the brand new developer beat them?

GamesBeat: What number of are there in your group as properly, and the way a lot does it get devoted to one thing like Hero Wars?

Reinhold: I believe round 400 folks at Nexters work in Hero Wars, each in advertising and the event group. So it’s additionally an enormous group.

GamesBeat: And what number of all collectively are there?

Reinhold: At Nexters studio there are round 600 folks.

GamesBeat: So how do you make use of the opposite 200? Are they unfold throughout a whole lot of video games?

Reinhold: We now have one other recreation that’s a farming recreation with adventures. So we’ve these two streams. We now have the Midsport stream with Hero Wars as the primary flagship product, and we’ve the informal streams. We used to have an informal recreation of the identical kind 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’ve constructed a recreation that’s known as Island Hoppers. It’s additionally each on cell and on internet. So the progress is interconnected. When you progress on internet, you’ll be able to go on cell and play there and return. These are two primary issues that we do, so the Hero Wars and Island Hoppers.

We now have an R&D division as properly that’s searching for new video games, exploring new genres.It’s constructed mainly on a small cell group foundation, like 5 or 6 folks, engaged on getting a small prototype that they struggle on Fb and see the way it works. After which they go to retention one take a look at.

So 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 just a few tries to make it higher, after which they simply throw it away and go subsequent.

GamesBeat: How did you guys do so far as pulling folks out of the areas? Did you guys have folks that you just needed to transfer? Are all of them in numerous international locations?

Reinhold: Yeah, nice query.We had a reasonably large group primarily based in Russia earlier than the struggle. As soon as the struggle began, we determined that we needed to maneuver everyone out. We didn’t wish to have any folks positioned in Russia. We now have closed all our subsidiaries there and have moved. So we’ve opened just a few places of work. The largest one now’s in Armenia. That’s a former Soviet nation. And one other one is in Kazakhstan. And we’ve received just a few European places as properly that aren’t but places of work, however we’ve received subsidiaries there once we are fascinated about opening places of work there.

GamesBeat: And the headquarters is?

Reinhold: It’s in Cyprus. And so we’ve moved a part of the group to Cyprus and the remainder of the group to Armenia and Kazakhstan. And naturally, round 10% of the group is now numerous in numerous international locations, like remotely in numerous international locations, like in Serbia, within the U.Okay., in Germany, in Georgia, in all places.However no one, no one, so everyone, we’ve taken everyone out. In fact, it value us a fortune.

GamesBeat: Did lots of people depart the corporate simply to remain as properly, or did you really handle to get most of them out?

Reinhold: We now have let some folks go final yr. So we determined that the plans for the expansion by x-ing the variety of massive video games that we’ve shouldn’t be going to occur. And we’ve let go round 25% of the corporate. However for probably the most half, we’ve managed to maintain the core group. In fact, there have been just a few instances when folks didn’t wish to depart and so they simply stayed in Russia.

GamesBeat: After which, I suppose, greater firms are even saying that they aren’t going to do new video games anymore.

Reinhold:They aren’t what?

GamesBeat: They aren’t actually doing new video games anymore. Like Warner Brothers, possibly the largest instance of that, the place they mentioned, no, we’re simply going to do our franchise video games. We’re not going to speculate so closely into new video games. We now have no manufacturers proper now. So it looks like you’re going in that course and you aren’t going that far. Since you nonetheless are creating some model new issues.

Reinhold: I’d say that Hero Wars for us is a good IP already. And mainly, constructing new methods to play our characters, so construct new gameplay across the previous IP, that’s one thing that we predict may work for us. So mainly, we’re utilizing the IP as an incredible theme.

That could be very extensive. It’s a generic fantasy recreation with which Interi connects totally different sorts of heroes from totally different worlds. You’ll be able to have a Robocat and you may have a medieval knight that may blast swords from the sky. They stay in the identical world. So mainly, 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 sort of increase on the story and never kill the story.

GamesBeat: Do you could have extra flexibility with the IP?

Reinhold: Yeah, we imagine so. It could possibly be additionally a course to purchase some IPs which are already available on the market and to make use of them for our R&D initiatives. We’re exploring on that as properly.

GamesBeat: You guys haven’t finished a lot of that earlier than?

Reinhold: What?

GamesBeat: Shopping for different firms?

Reinhold: We did. Simply earlier than the struggle began, we’ve closed just a few offers. The largest one was the acquisition of Pixel Gun 3D. That may be a very massive 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 massive and the viewers is large. We’re working that recreation and we’re going to launch on Steam in just a few months. We now have over 150,000 wishlists, add-ons.

We even have bought lower than 50% stakes in just a few firms like RJ Video games and firms in Royal Ark. They do mid-core video games. We now have expertise and we’re constructing relations with the builders proper now.

GamesBeat: I simply surprise if the market stays this fashion for some time now or if there are nonetheless numerous 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 it 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 setting much more aggressive and the margins decrease provided that the economic system shouldn’t be in an incredible form. Mainly, folks don’t have that a lot cash to spend on video games.

This tells me that the market gained’t be simple subsequent yr. I believe that everyone needs to see the following massive factor available on the market. Our tackle that is that the franchise is constructed from cell and unfold round into totally different different platforms and media could possibly be this new massive factor. What do you suppose?

GamesBeat: A lot of it, I believe, folks have mentioned was economic system pushed. Once 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.

So that they misplaced extra customers, I suppose. They gained a whole lot of customers throughout the pandemic and so they misplaced a whole lot of customers too. Whereas the console video games didn’t lose as many customers. Or loyal console recreation customers.

It looks like we’ve one other yr of that to undergo. The place there’s harder financial conditions for gamers.

So then you definately would logically have the entire trade hold dropping for some time in order that the economic system improves. That feels like a tough operation.

Reinhold: Completely agree with you. What we see on our internet undertaking, which is sort of below the hood as a result of there should not many sources of monitoring the competitors from exterior the corporate.

We see that we aren’t dropping as many customers because the cell market as an entire and that’s our cell product. So mainly our participant base stays actually loyal. We’re constructing on high of that, so making an attempt to present 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 sort of why we predict that constructing one thing extra than simply an app on the cell platform could possibly be a flip.

GamesBeat: Do you see this as extra funding in stay operations or do you see it as one thing totally different? I suppose it’s extra funding in what you may name a transmedia.

Reinhold: That is how we give it some thought.

GamesBeat: On the similar time, is stay operations nonetheless getting a whole lot of funding?

Reinhold: In fact. Dwell 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. So that they have to be entertained.

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