The Stanford US-Russia Forum (SURF) teamed up with the student-run initiative Emerging Silicon Valleys Tuesday evening to host a panel of Russian entrepreneurs in a forum titled, “The Russians Are Coming: Global Online Games, Entrepreneurship & Innovation in a Changing Society.” The event aimed to inform students of the prospects of the Russian online gaming market and encourage collaboration between entrepreneurs in the United States and Russia.
The forum, which attracted undergraduate and business and law students, featured prominent members of the Russian gaming industry, including Sergey Titov, CEO of Arktos Entertainment Group, and Sergey Klimov, founder of Snowberry Connection and Snowbird Game Studios. The speakers emphasized the opportunities to be found in the emerging Russian online markets, which they said have been developing rapidly in recent years.
Titov and Klimov underlined the possibilities stemming from the exponential growth of the online gaming industry. Even through the financial crisis of 2007-08, the gaming user base grew by approximately 70 to 80 percent in Russia. Many gaming companies can be sold for several hundred million dollars once they develop an avid user base and advertising revenues, the pair said.
Furthermore, vast possibilities remain in the mobile gaming market in Russia, which has remained relatively flat in recent years. Developing social games that use platforms such as Facebook to attract users is also promising, the speakers said.
Klimov remarked, however, that there is more to the industry than compensation alone. He said that it is more important that entrepreneurs remain passionate and believe in what they do.
“I chose to do something with more creative freedom and a business that is not really established,” Klimov said. “That just doesn’t exist in the car industry or the insurance industry. The mix of technology and creativity gives you a lot of freedom.”
The emerging Russian online technology market enables a great deal of creativity and flexibility, as it has yet to become a stable market, he added.
The SURF panel examined recent economic changes in Russia, which have helped contribute to the success of the online gaming industry. The panelists explained that there were few barriers to entry in the industry, as salaries were relatively low but comparable to other lines of work. Globalization and an increased availability of capital from venture capitalists have helped many companies find success.
Despite the improving economic environment, the panelists noted increased regulation and increasing costs as a negative consequence.
Dmitriy Devishev, vice president of online games for mail.ru, noted that these obstacles make far greater capital necessary to start a company, whereas previously a group of friends could start a company at minimal cost.
However, there remained a general consensus among the panelists that the barriers to entry generally have been reduced over the years, despite the few difficulties that have arisen through increasing regulation.
Finally, the panel discussed the increased prospects of collaboration between entrepreneurs in Silicon Valley and Russia. They said that, surprisingly, language barriers prove a relatively minor inconvenience, with cultural barriers being a far more complex issue. The entrepreneurs explained that it takes knowledge of the local market to be successful in the industry, making collaboration between U.S. and Russian entrepreneurs necessary.
Titov told the audience, however, that even with increased cooperation, it remains difficult for a company to be equally successful in the United States and Russia, as the countries are very different marketplaces, each with its own dominant culture.
Titov offered one solution: closer work between graduates from the United States and Russia to achieve a greater international understanding and cooperation between the two dynamic markets.