Alawar Entertainment is a company on a roll – especially in its native country, Russia, where it owns more than 80 percent of the casual gaming marketshare. After absorbing five studios over the past two years, the company boasted during Casual Connect in Hamburg that it planned to release 50 titles in 2009. Gamezebo spoke with Kirill Plotnikov, Alawar’s VP of Publishing, to get the scoop on what kind of impact the company is having on casual games in Russia, Eastern Europe and beyond.
Kirill started his career as a game producer with Alawar in April 2003, and within a year he had moved up to the role of Head Game Producer. So far, he’s produced more than 90 games for Alawar, including The Treasures of Montezuma, Stand o’ Food, Farm Frenzy, Farm Frenzy 2, the Natalie Brooks series, Beach Party Craze, Pet Show Craze, Sprill – The Mystery of The Bermuda Triangle, Virtual Farm, and The Treasures Of Mystery Island. He graduated from Novosibirsk State University’s Mechanical and Mathematical Faculty with a degree in programming.
Alawar Entertainment is the leading developer, publisher and distributor of casual games in Russia. When and how did you decide to enter the casual games business? How long have you been open for business?
The history of Alawar dates back to 1999, when a financial crisis dubbed "Black Tuesday" hit Russia hard. At that time, Alexander Lyskovsky and Sergey Zanin were developing a computer game based on a fantasy book series by a Russian writer. The investors funding the project were to pay for Alexander and Sergey’s work in several installments but discontinued their involvement for financial reasons. So Alexander and Sergey used their own money to finish the game and decided to change the format of future products, as they knew their small company wouldn’t make it through another crisis.
At that time, a new type of entertainment was becoming popular in North America — small puzzle and arcade offerings that would soon be called "casual games". Alexander and Sergey believed the format had a lot of potential, so they founded Alawar in 1999 specifically to develop these kinds of games.
The rest of Alexander and Sergey’s story is simple: 12-hour workdays, $50 paychecks and a passionate belief in the rightness of their course, followed by their first successful game and publishing contracts. In 2009, almost 10 percent of the casual games downloaded worldwide will be published by Alawar. I think that’s a great outcome for a company founded on money borrowed from friends.
How did you come up with the name "Alawar?"
Our old timers say when they sat down to give the company a name, Alexander recalled a fantasy book he’d read in the ’90s. In that book, there was a capital city of dark elves he thought was called "Alawar". "City of Elves" is a good name for a company developing small computer games, so the team approved the name.
Why are so many casual games being developed and published in Eastern Europe and Russia?
Studios in Eastern Europe develop around 30 percent of the casual games sold worldwide. There are several reasons for that, but the main one is the cost of development — creating a game in Eastern Europe is much cheaper than in North America. This explains the interest of Western publishers in this market. Even though it takes longer for new technologies to penetrate Eastern Europe than the West, this region is home to a great number of skilled professionals capable of making fantastic products literally out of nothing.
There are literally hundreds of companies in Eastern Europe and Russia trying to come up with their own game ideas. This is because casual games require significantly smaller investments than hard core games, and because the task of finding an investor to sponsor a large scale project is very complex. Many studios simply invest their own money in their projects.
I also think national character plays an important role. A Russian proverb says "You can’t buy the joy of life". So I guess there’s something inside Eastern European developers that enables them to create such beautiful and exciting games.
People know a lot of casual games are developed in Russia and Eastern Europe, but that region is fast becoming a large market for selling casual games as well. Tell us more about the casual games market in Russia and Eastern Europe. How large is it? How is it similar to the US market and how is it different?
North America had long been the prime casual games market, with established distribution and payment mechanisms. But our owners have always looked for new opportunities, and in 2004 made a strategic decision to start selling casual games in Russia. Note that Alawar had to start from scratch: there were no marketplaces, no convenient payment methods and no Russian-language casual games.
Yet over the last five years, the casual games market in Russia has reached $28 million, with our share exceeding 85 percent. According to recent research, the market grew by over 180 percent in 2008, the highest rate in the Russian game industry. We plan to increase the market to $50 million by 2010, despite the down economy.
As for the differences between the two markets, there are several. First, the payment methods. Unlike in the US, where payment by credit card is common, up to 95 percent of all casual games in Russia are purchased using SMS. This is a more convenient payment option for our customers, as the majority of Russians don’t have credit cards yet.
Pricing is the second difference. A game from Alawar costs around $7 in Russia. This is the optimal price for this kind of content. This is also the price of a movie ticket. Until recently, the standard price for a casual game in the US has been $19.95. The global recession, however, led many distributors to make special offers, hold sales and issue club memberships. Therefore, prices in the U.S. are likely to be in the same ballpark soon.
The third factor is the target audience. Personal computers have long been an expensive toy few people in Russia could buy, let alone learn to use. They only became affordable eight to 10 years ago along with the proliferation of broadband Internet in many regions of the country. Until then, most users had slow and unreliable dial-up connections. That’s why the most active consumers of casual games in Russia are office workers aged 25 to 45 — with the market split almost down the middle between men and women. According to research by Casual Game Association, middle-aged housewives purchase the majority of casual games in the US.
You have casual game portals in the US and Russia. What’s your fastest growing games portal? To where do you plan on expanding next?
Currently, the Russian market demonstrates the highest growth rate. In 2007, sales increased 270 percent compared to the previous year. Sales in 2008 grew around 180 percent. Alawar focuses on distributing games in fast-growing Internet markets, such as the BRIC countries (Brazil, Russia, India and China) and some countries in Europe such as Finland, Poland, Germany and Israel. We plan to launch our own affiliate programs in these countries, which we believe will allow us to partner with their large entertainment portals. We’ve tested this approach in Russia and plan to apply our experience and know-how to other markets.
At Casual Connect: Hamburg, you told me you were planning to release 50 casual games in 2009. Aside from not sleeping, how do you plan to release so many games in such a small window of time?
It won’t be as hard as you might be thinking. We have internal studios working on sequels to several popular Alawar games as well as entirely new titles. On the whole, we expect them to produce around 20 games this year. We also cooperate with over 30 independent developers, so if we get at least one game from each of them, then we’ll have the 50 releases I mentioned in Hamburg. We might encounter some delays, however, as we have stringent QA requirements, but that’s okay. We’d rather release fewer products than have quality issues.
You acquired five companies in the past two years, including DreamDale, Stargaze, Five-BN, Friday’s Games and Melesta. What do you look for in a company you plan to acquire? Are you planning on acquiring more casual game companies?
We didn’t acquire these companies, but rather created new studios within Alawar. The teams and management staff remained the same. This gave these studios a certain degree of artistic freedom and allowed them to concentrate on game development while we assumed all administrative, marketing and financial burdens.
We had a long-standing business relationship with each of these companies, so we had a clear picture of the people with whom we’d be dealing. We estimated their creative potential, the number of successful projects in their portfolios and their desire to develop new and exciting titles. We also paid attention to the integrity of these teams, as it’s hard to get consistent quality when using lots of freelancers.
We have no plans to create additional studios in the near future, as we’re concentrating on polishing our current titles. Our internal studios will develop over 20 games this year, accounting for almost a half of our releases in 2009, so our primary task is to make these titles as close to perfect as possible.
Your most recent hit is Farm Frenzy – Pizza Party. I have to ask: How did your developers come up with the idea of adding a pizza twist to the farm management simulation?
Pizza is my favorite food! I’m always ready for a slice, especially pepperoni. When the guys from Melesta discussed the third part of the game with us, we came up with the idea of pizza production quite naturally, especially since we already had all of the ingredients already in place. We only had to add a few things for the player to buy in town.
You also created the popular Natalie Brooks series of hidden object games. Give us some insights into the development of these games.
The idea to create Natalie Books was born at Friday’s Games after the release of Dream Chronicles. The team there loved the simple mechanics and the idea of solving a casual quest, but Dream Chronicles lacked the most important elements: a good story and interesting characters. The developers of Natalie Brooks decided to fill this gap and give gamers a chance to empathize with the protagonists and watch a story gradually unfold.
The girlfriend of one of the game’s designers, Natalya, became the model for the main character. And the team chose the detective angle because of their fascination with the adventures of Nancy Drew.
Like the "National Treasure" movies, the Natalie Brooks games also blend reality and fiction. For example, part of the first game takes place in San Francisco. Although we never mention the name of the city, you can easily recognize the location. And the sequel features such places as a top secret room for US presidents, a ghost train in the Grand Canyon, a secret mechanism in Big Ben, a bomb shelter in a pillar of the Brooklyn Bridge and Al Capone’s cell in Alcatraz.
Alawar Friday’s Games is currently working on a third Natalie Brooks game that will feature tons of exciting puzzles, a great story and a bunch of new characters — everything we believe are the trademarks of a Natalie Brooks game.
How is the global recession impacting your business and the casual games market in Eastern Europe and Russia?
The only problem the global recession has caused for us so far is slightly delayed payments from content providers. We’re not going to cancel any of our planned releases or fire anyone. In fact, we doubled our staff over the last year. The crisis actually helped us, as we were able to hire top-quality professionals that previous employers had let go. On the whole, the situation remains stable and is even improving in certain areas. For instance, our sales increased by around 30 percent in the last six months.
As I said, casual gamers in Russia are rather young and the crisis made them review their family budgets. People aren’t eating out and going to the movies as often as they used to. They don’t spend the same amounts of money on outside pursuits, so home-based entertainment, including casual games, is becoming more popular.
Farm Frenzy 2 recently won the "Best Family Game" honor from Disney’s iParenting Media Awards. Although this won’t mean much to Russian consumers, I think it’s a clear sign of our current standing.
What do you think the casual games market will look like in five years?
I believe the growing popularity of game consoles will attract more developers and publishers, leading to an increase in the number of casual titles for those platforms. Also, casual games could have a majority market share in five years.
What’s your favorite Alawar game? Your favorite casual game overall? What casual game are you playing right now?
My favorite Alawar game is The Treasures of Montezuma, developed by Visual Shape. My favorite casual game overall is Mystery Case Files from Big Fish Games. Right now, I’m playing Dream Farm, an upcoming game from Alawar Melesta. It’s gonna be huge!
Any last words for your fans?
Watch for new games coming soon from Alawar. We’ll do our best to surprise you!
Along with the interview, Alawar sent us some great concept art from the Natalie Brooks games, which we’ve included below. Enjoy! (Click on any of the images to look at the larger version.)