To Victor the spoils

To Victor the spoils
Michael French

By Michael French

September 4th 2012 at 10:00AM

Wargaming's CEO Kislyi on winning the publisher battle

World of Tanks has been hard to miss since its launch in 2010. The military MMO has done extraordinarily well for an independently made game in a tough sector. It now courts the attention of an army of users – and was rewarded last month with a Develop Award for Use of Online.

Much of that success is down to the colourful, driven and immensely enthusiastic CEO of the game’s studio, Wargaming.net. Like so many others, Victor Kislyi started coding games in his home in his late teens.

Unlike many bedroom coders, however, today he runs a studio that employs over over 1,000 staff, and has two more MMOs – World of Warplanes and World of Warships sunderway.

How did your company come to make World of Tanks and specialise in MMOs?
Before World of Tanks, we made 13 titles and that was a good – let’s say at was a ‘university of life’ experience. All of those games were specifically retail titles, single-player with a couple of multiplayer aspects. About four years ago, we realised this industry was going nowhere, when you talk about retail and single-player things.

There’s piracy, $50 price tags, competition and the developer-publisher relationship, which very rarely works because of contracts, deadlines, money, acceptance, quarterly reports for big publishers which affect your schedule, and other stuff.

Our last big foray was with the London arm of Square Enix with Order of War, but again, at a time when not many titles did very well in retail. Even some of the really big franchises failed.

At the same time, we had a sidekick business of advertising and technology called AdRevolver and, to cut a long story short, after a couple of acquisitions and mergers, technically we sold the technology to Yahoo in 2007. We got, I’d say, $12 million, and we wisely did not buy Lamborghinis and Palm Islands and stuff.

Instead we invested in our MMO. At first we were playing with the technology because it was a whole new world to us; server side tech, connectivity, all that stuff.

We were thinking about a fantasy theme first, but then we realised going against World of Warcraft and 400 other MMOs out of China and South Korea was probably not a good idea, so we decided to turn around
and do something niche. We thought: ‘What were we doing best before?’. The answer was tanks. We had done sci-fi tanks and WWII tanks, so we thought we should do an MMO about tanks.

And you built the entire tech base and studio system needed for an MMO?
We realised that we not only had to be a good developer. We knew that any MMO is a service, so we, from scratch, built a publisher. We hired some good people; we trained some other people, and put some of our own initiatives on the table.

Right now, the whole company is made up of over 1,000 staff, and we had just 120 employees a year-and-a half ago, so impressive progress was made.

Half of that number is developers, making more warplanes, more battleships; and other on-going things. The other half is the publishing arm. It’s the same company but it’s a different thing they do. It’s community management, it’s customer support, financial and fraud stuff, PR and marketing. Of course, we have the luxury of being a publisher and developer.

So you built your own publisher because you weren’t happy with other publishers?
The truth is that none of the traditional retail publishers, even now, know how free-to-play works. They are big guys trying to do something like Company of Heroes Online, which went nowhere.

But we’ve been inside the industry intensively for the last five years. Before the decision not to go with the publisher, we did many round the world trips meeting each and every online publisher. Before that we had known all the big publishers from the retail space, and we realised they could not do anything.

The big companies are too big to be democratic and too slow to react to the reality, and these things are moving really fast. The medium online publishers are probably not very powerful and could not provide enough marketing and PR muscle.

So we said ‘we’re doing it on our own’. The good news for us is that as soon as it was launched in Russia it exploded. We started to have a very healthy revenue stream, so through the development and hiring and updates and patches, it all became ­­possible.

What’s the secret to your success given you built this operation from scratch?
We went the niche way. First we hand-picked specialists in tank history, WWII historians, museum guys, authors, writers, bloggers, military history enthusiasts and plastic model collectors – you would be surprised at how many of those are in existence. We hand-picked them and created a very small, but very united and passionate community and we called it ‘the nucleus’ – the core.

Around it was a little bit of advertising and traditional PR and marketing. We pulled in waves of Counter-Strike players, other shooting game players, and strategy game players.

So it was a very natural growth but it had this exponential component to it. Right now its also growing really fast, so that’s where the community management kicks in, because if there’s a problem or demand, our community can go to the developers and demand what they want. And if that’s not possible then our community guys go back to their work stations and work with apparently millions of angry people on the forum trying to explain to them why it’s not possible, or why ‘change is good for you, stupid’.

It’s like a presidential campaign going on every day for seven years. It’s political technology stuff where you have millions of angry mails trying to demand something from you collectively. It’s difficult so that’s why we have very strong guys in community management.

At some point you’ve gone from being super niche to critical mass though.
Don’t forget, we’ve put a hell of a lot of quality in. With World of Warplanes for example, I can claim, and very soon it will be true, that when it’s finished, and probably around a couple of months or half a year after launch, the amount of investment in this game will be equal to all of the flight simulators made before it combined.

That’s millions and millions of dollars, hundreds of thousands of man-hours, and richer and richer technology and testing all the time, and it will go on for five, seven or ten years.

What keeps those users playing?
That’s an art. It’s personal relationships, it’s atmosphere, and of course it’s rewards. When the times are bad, you talk to people and explain it to them. It’s like war, it’s like life and it’s like politics. You do it every day. It’s hard work and you combine of all your possible means. Financially, we are much more in a position to offer top of the launch kind of guys. We have ten offices around the globe.

Paris covers France and the head of our Paris office, Frédéric Menou, was, for four years, running Blizzard in Europe. He was behind the Rabbids and World of Warcraft and after Blizzard – where else can you go and work? He’s a healthily ambitious guy so we invited him to meet, we showed him what we have and he said ‘yeah, that’s ambitious enough after Blizzard.’ Some people say that we’re the next Blizzard and some people from Blizzard work with us.

It’s a multicultural corporation now that still preserves an informal, family style but not in every aspect because with that size we would collapse. We have to balance good valuable things from the old days of informal college stuff and also have to employ good business people and become a businessperson yourself – I’m talking about myself and some other guys who founded the company.

Why were you able to get into the online opportunity quicker than the big publishers?
Too bureaucratic, too large, too slow, too much job-hopping. We have so much critical mass. For the West, we combined the hardcore military simulation from our previous single-player experience, we had that and we knew the consumer already, it’s just that box wasn’t the right moment.

Then we were inspired by Chinese and Korean style of free-to-play and we had the money to fuel that and the experience to staff and create a rock-solid management team, including myself. All that focused on one point produced the ‘break through the wall into the blue ocean’ effect. It’s not a lucky incident; it’s hard work for fourteen years now doing the right things and keeping on doing the right things.

Are you interested in consoles or launching something at retail?
For free-to-play/online, retail is rather a nice addition. So we’re probably about to do a very nice retail collector edition just for those people who weren’t playing the game for a year and a half who want to put something on their shelves and have some goodies.

It’s made in Germany, 1000 pieces only, and limited edition. So retail is a nice addition when the game has already kicked off. We will not make our fortune on retail. Consoles are a different story.

Microsoft and Sony are very protected, very bureaucratic and have divisions within themselves, sometimes fighting each other, so it’s hard and slow even talking to them. We don’t make consoles things now. We might do in the future. Nobody knows what will happen with consoles, it might be mobile, it might be all-online.

What’s next for you?
Being an experienced businessman in the gaming industry, of course I can tell you the fairytale of how we will conquer the world, and we will.

Geographically, the publishing arm is spreading to Asia, Brazil, Turkey, the Middle East, Japan, Taiwan and Singapore, so we’re going international. For the next 12 months, it’s a very clear business goal – to make the best-of-the-best warplane game so that hardcore flight simulation guys and those who are not very familiar, but would like more casual controls, will be able to enjoy the game.

Also, nice graphics, nice PR, nice packaging, virtual or physical; we’ve done the same for Warships. That’s our goal. While conquering the world virtually, don’t forget to put your feet back on the ground and think about what your consumers want now. And, of course, we’ll be upgrading World of Tanks, so that consumes a lot of our powers and time.

Here’s the thing: World of Tanks is an obvious hit and we’re the company that made it, so our future pretty much depends on whether or not we will be able to prove we can make more successes.

If we can make a conveyor belt for the production of hits – we will be more successful.

www.wargaming.net