As Russian President Vladimir Putin rolled tanks across Red Square in May last year to commemorate Russia’s victory over Nazi Germany, thousands of gamers across town had just finished celebrating the triumph with an epic battle of their own.
Over at a packed Olympic Stadium, a venue normally hosting the likes of Madonna, Beyonce and Metallica, bands of virtual warriors manned banks of computers along the venue floor to hunt each other with Allied and Axis war machines. Bright orange bursts of cannon fire lit up 10m-wide screens as flickering black-and-white war footage of Red Army advances in World War II played to the delight of the crowd.
The “Portraits of Victory” tournament was sponsored by the World of Tanks video game and marked the culmination of a lifelong fascination with both history and technology for the game’s creator, Victor Kislyi.
Photo: Reuters
Two decades ago, Kislyi began melding the two passions in his family’s Minsk apartment with his brother, eventually building the company they created, Wargaming PCL, into a growing army of 150 million global users.
The effort has valued the business at US$1.5 billion and given the 39-year-old a net worth of US$1 billion, according to the Bloomberg Billionaires Index.
Kislyi declined to comment on the Bloomberg valuation, saying only that he has a “very modest” lifestyle and has never tried to put a number on his fortune.
“World of Tanks has created its own subculture and that’s the most important thing,” said Oleg Shpilchevsky, head of the games business unit at Moscow-based Mail.Ru Group, the maker of Armored Warfare: Project Armata, a competing product named after Russia’s most advanced real-world tank.
Wargaming is one of the industry’s most successful creators of free-to-play online games, which produce revenue through premium accounts offering players more credits that enable them to move faster through increasingly difficult levels of play.
Kislyi controls 64 percent of the Cyprus-based business in his name and through a 25.5 percent stake held by his father, according to Wargaming’s 2013 semiannual financial report. The business has 4,000 employees on four continents and revenue of US$590 million last year, according to data compiled by Bloomberg and analysts’ estimates.
World of Tanks features 400 models of actual 20th-century vehicles ranging from the German Panther and the Soviet T-34 to the US’ Sherman and the British Cromwell. The game became an instant hit when it was released for personal computers in 2010 in Russia, where the Great Patriotic War, as World War II is known, continues to elicit intense national pride.
“The combination of creative brilliance and business acumen is what drives Wargaming’s success,” SuperData Research chief executive Joost van Dreunen said.
Kislyi moved the game onto smartphones and tablets with the 2014 release of World of Tanks Blitz, which has been downloaded 40 million times. He has released two followup PC titles, World of Warships and World of Warplanes, which already have 6 million and 10 million registered users respectively.
He has also expanded into China, the biggest multiplayer game market by far, where a subsidiary, KongZhong Corp (空中網), runs Wargamings operations.
For the moment, the growth prospects for the business remain strong. Global revenue from free games advanced 6 percent last year to US$16.5 billion, accounting for almost a third of the entire digital games market, and could reach US$18 billion next year, according to SuperData Research.
In China, League of Legends earned billionaire Pony Ma’s (馬化騰) Tencent Holdings Ltd (騰訊) an estimated US$1.6 billion in revenue last year, helped by the company’s promotion of the fastest-growing trend in the gaming world — so-called E-Sports, or organized leagues comprised of professional players who vie for real money.
Newzoo, an Amsterdam-based research company, forecast that the number of E-Sports enthusiasts will reach 145 million next year, up from 58 million in 2012.
Two of the world’s savviest technology investors — Jeff Bezos and Alisher Usmanov — are also getting in on the action. Amazon.com paid US$970 million in 2014 to acquire Twitch.tv, a platform for streaming gameplay. Usmanov, once Russia’s richest person, followed suit last year with a US$100 million investment in Virtus.pro, the country’s largest E-Sports company.
Kislyi is not squandering the momentum. At home, he stokes the flames of patriotism by helping to fund re-enactments of battles fought along the Stalin Line of fortifications that ringed the Soviet frontier, using real tanks and fake explosives. Abroad, he has become a recognizable figure in the Cypriot banking world, joining investors Wilbur Ross, Daniel Loeb and Viktor Vekselberg, Russia’s second-richest person, in recapitalizing the nation’s two leading banks after the 2012 financial crisis nearly drove them to ruin.
Wargaming is investing in European start-ups to develop its own live-streaming service and pushing into the US, where it bought Chicago-based Day 1 Studios for US$20 million in 2013 to adapt World of Tanks to the Xbox and PS4. Kislyi has also invested US$26 million to develop Wargaming’s E-Sports league, which held online tournaments in cities including Moscow, Las Vegas and Warsaw last year that attracted 850,000 players and paid US$3.3 million in prize money.
“We must become a conveyor belt for the production of quality games,” Kislyi said by telephone from Cyprus. “We are the company that explores big markets. If there are a billion microwave ovens with joysticks and it is possible to play games on them, we will develop the software for them.”
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