WN St. Petersburg 2022, a conference for game developers and publishers, starts today. Here are opening remarks by Pavel Ryaykkonen, CEO and founder of WN Media Group.
I would like to share some thoughts with you about what is happening in the industry right now.
It’s going through some very difficult times. Today we are holding a conference in St. Petersburg, where the changes are especially noticeable.
There is no doubt that the participants of the conference will spend a lot of time discussing how they’re dealing with new challenges. Which business architecture seems to be more sustainable in turbulent times, what works and what does not.
The time of the pandemic and subsequent events have already taught us that everything can dramatically change very quickly. But while the pandemic, especially in its early stages, even gave momentum to the development of the gaming business, the current challenges have much more negative attributes.
And it’s not just local issues. There are also global challenges as well, such as inflation and instability of financial systems. The old ones don’t work well, the new ones are yet to arrive.
It’s hard to find a safe haven right now, but game makers are arguably best equipped to weather the storm due to a variety of business features:
- Diversification by region. Games are a global product;
- Affordable price for players. Even in the most difficult times, users can afford a small joy for $0.99;
- Digital distribution. We kind of take it for granted, but with many supply chains now disrupted, it feels like an ultimate advantage.
This list goes on.
At the same time, when the previously hard currencies are seeing a double-digit inflation, companies will have to reduce their profit margins. Those who were struggling to break even will have a hard time keeping their footing. Moving forward, companies will have to factor inflation risks into the cost of games and content.
On the investment side, those who command the capital are seeing it slip away: assets recently considered stable become a risk. Investors feel the growing pressure to invest in a promising project as soon as possible. But finding that gold nugget has never been easy, and now even more so.
Moreover, it is very difficult to manage risks in a balanced way. All the processes within the games industry itself are changing at a different pace.
Then there is the advertising market with its own prices for traffic — and it’s also mutating.
There is the labor market, which was overheated six months ago and now is experiencing multidirectional movements and even shocks in some places.
There is demand from players who are now reconsidering how much they are willing to spend on games, given the fact that their monthly income is changing.
There is no universal answer to these challenges. Except perhaps what Charles Darwin suggested a while ago: the key to survival is the ability to quickly adapt to change. Of course, in each case, adaptation will take its own unique form, and only time will tell how viable it will be.
So, what’s next?
As difficult as it is right now, I am confident that the gaming industry will continue to grow. Any crisis is not just about difficulties and challenges. These are always followed by a new wave of growth and development of markets, models, and approaches. The harder the fall, the stronger will be the growth on the wave of recovery.
New partnerships and companies will be created, new projects will be launched, which after a while might become new stars of the industry.
I hope that what we are doing here at WN Media Group will contribute to the emergence of these new stars. It may not be a bright supernova right away, but if at least one more star is born in the video games universe, if there’s even slightly more light shining on your way, then what we are doing is well worth it.