In April 2019, Bloomberg included the brothers Igor & Dmitry Bukhman on the list of billionaires. The brothers were born in Vologda, a city in the north of Russia. In 2004, they established a video game company in their hometown. Today, Playrix has more than 1,000 employees. Games such as "Dream Home" and "Dream Town" have been loved by players all over the world, with daily active users reaching about 30 million. The first few games of the Bukhmans brothers were created in Vologda’s apartment, and they paid back almost immediately after they were put on the shelves. Igor is 37 years old and Dmitry is 34 years old. It is said that both have a net worth of 1.4 billion US dollars. We talked to the Bukhmans brothers about how they made their fortune through games, why they chose to leave Russia, and the current status of the Russian game market.
Do you remember the first game you played when you were a kid?
Igor: When we were young, computers were very rare things. We didn't get the chance to touch them until the fifth and sixth grades, which was the mid-1990s. We started playing games at about the same age, about 12 or 13 years old, Dima was 3 years younger than me. We play "Tank Wars", "Mario" and Dandy, just like other kids.
Dmitry: Our growth experience is the same as that of children from other non-rich families in our hometown. Our father was a veterinarian and worked as a mentor in a meat processing factory. My mother has always worked in a ball bearing factory. Our life is very simple, and we go to a very ordinary school. The computer was given to us by grandpa. This is a milestone in our lives. Computer research has become our first hobby. In 1996 and 1997, we faced the Pentium 100, studied its operating system, tried to write programs, and of course, played games. But we are not all around the game all the time.
When did you decide to make the game yourself?
Igor: In 2000, I was studying applied mathematics at Vologda University. A teacher sold his own game online, and we wanted to try it. At that time, I just finished my freshman year and Dima finished the ninth grade course. We connected to the Internet for the first time. We didn't think about making money from this at the time, we just wanted to write some code and put it online.
We didn't have any great ideas, so we decided to make a game in the end. At that time, the online game sales model generally allowed you to play for a short period of time for free, and then you had to pay to continue. We use the night time to play games, make up for sleep during the day, and our first game will be completed a month later. It is very simple, a bit like Xonix: you use the keyboard to control the cursor, and while avoiding enemies (actually just a few dots on the screen), you clear the background of the picture.
In the first month, four people bought our game for $60. I even remember the first person to buy a game. At that time, there was an email informing us that someone in the United States had purchased our game, which was incredible.
Game optimization took us a long time, and our monthly income increased to $100. At that time, the monthly income of our parents was about US$200 per person. For us, this is real money.
Does this income give you the idea of making another game? When did you start the new game?
Igor: Half a year after the first game was released. We were playing games while going to school. For some graphic effects, we also found a local painter to cooperate. It took about 4 to 5 months before and after. In the first month of the game’s release, revenue reached $200. This is a big breakthrough. We have two sources of income. Later, we had the money to buy a second computer, and the efficiency was doubled, because two people can work at the same time and no longer have to take turns using the computer. But we still insisted on being in the same room.
When did you decide to formally establish a game business?
Igor: In 2004, three years after our debut, we could earn about $10,000 per month. At that time, a monthly income of $300 was considered good in Vologda.
Dmitry: In the beginning, our parents couldn't believe that we could make money online. At that time, everyone knew little about the Internet. Even if we make more money, our lives are still the same. Did not buy anything gorgeous and luxurious.
Igor: I can't even remember what we did with the money, it should have been saved. The only thing I remember is that before graduating from university, I bought a car, also in 2004. But it's not a good car, it's a used Lada 21099. I saved enough money to buy a car in less than a month. We need some time to reposition ourselves, figure out the purpose of this money, and adapt to this income state. Before this, we had never touched on business matters. I don’t even know the locals doing business at all.
Dmitry: After the company was founded, I stayed in university for three years. I don't know why I did this, but we have been instilled in the belief that "everyone who can't graduate from college is a loser" since we were young. I don't even know that some people choose to give up their studies.
Why did you choose to establish a company in Vologda instead of a big city like Moscow? Is it out of love for hometown?
Dmitry: No, but it's not that we don't love our hometown. We were born and raised here and never thought of leaving Vologda. For us, living here is the norm. I don’t think moving to Moscow is a necessary decision. We have seen some very good people move to Moscow, and then they can only return to Vologda when they run into a wall.
Igor: In addition, there are many outstanding talents around us. So at the beginning, we recruited people we knew in school. If we move out and start over in Moscow, we may have to go through a difficult running-in period.
Dmitry: In Vologda, we ushered in rapid growth. In the beginning, we only had four people. We rented a few rooms in a library, and it took us a few months to get rid of those wanton rats. We worked there for a few years, and the team expanded to a dozen people. Two or three years later, Playrix's employees are close to triple digits. Before, we moved from one office to another, but then we decided to build our own studio.
Was the video game market growing so fast at that time?
Igor: When we first started, there was almost no fixed target market and business model. Whether you can make money or not depends on your luck. When Playrix was founded, downloadable casual games were on the rise. This type of game does not require a lot of time investment, and anyone can easily play it. In addition, large online game stores have also begun to appear.
One type of target user is growing: 35+ year old women. We want to know what types of games these people like, what attracts them, and what is a thundering spot. We strive to make a detail perfect, even if it takes a lot of time. The first game took more than a year, and the second was even longer. Before 2009, we had been focusing on target users of this age group and produced about 30 games. They have all achieved commercial success, and some of them are the most profitable among similar products. In short, our company's revenue was one of the best at the time.
What was Playrix's revenue at that time?
Igor: It's about 5 or 6 million US dollars a year. But we have a problem: no matter how cool your game is, your user scale will peak sooner or later, which also means that revenue will reach the upper limit. We realize that we can't get very considerable growth in this market, and there is no incentive to do new things. Now, we are committed to the mobile game market, and the income ceiling only exists in theory.
Playrix’s revenue reaches millions, but you still choose to stay in Vologda, and you even built a new studio. Why?
Igor: At that time, we thought that building a studio would be more cost-effective than renting or buying, but it turned out to be a bad idea. In Russia, there are some problems that you never expected.
Does anyone ask you for bribes?
Igor: It's worse than this. We spent three to four million rupees (about five to sixty thousand US dollars) to buy that piece of land to build a studio, and the construction began more than a year later. We laid the foundation and found out that the person who sold the land was not the real owner. This land belongs to the city government and also to us, because that person managed to get the government to register all the land documents under our name.
After that, we paid another payment, otherwise we would have to tear down everything that was built. The person selling the land can no longer be reached. We have learned our lesson and we will never do such a thing again.
How many employees did you have at that time?
Igor: About 140 or 150. We have been actively expanding our scale. When "Dream Town" appeared on the mobile platform (App Store in 2012 and Play Store in 2013), we made a breakthrough. As soon as the game entered the market, it evoked a enthusiastic response, and it has maintained a growth state for five years. Now its user scale is larger than ever before-daily active users reached about 6 million, more than ten times more than when it first started.
"Dream Town"
Dmitry: In the farm & city construction category, "Dream Town" is now ranked first. The reason behind the success is hard to say clearly, maybe just because it is a good game. In the past five years, we have continued to optimize and upgrade, adding more new content. A team of 60 people has been supporting it.
After a game like this is released, how do you ensure that players will notice it? After all, there are a bunch of games on the shelves every day.
Igor: Today, these are all related to traffic purchases (online advertising). For a successful game, it is absolutely necessary to buy traffic for it, so as to make your income higher than you paid. This is common practice, and it is true for us. In today's market, not knowing how to sell products is doomed to failure. The competition is too fierce.
Where do you promote the game? How did you do it?
Dmitry: Mainly through the two platforms Facebook and Google. When you browse the pushed feed content on social media, you will see an advertisement for our game, and then you may click on it to start the download process. Of course, we will pay a sum of money to the platform for this. We pay per user, and then see if the average revenue after promotion is higher than the average revenue that users bring us when they play games.
These people have been playing for a long time, and some people have been playing for 5 years since the beginning. About 90% of the players have never paid a penny, because you can enjoy the game without spending any money. But if you want some extra options, you have to spend money to buy in-game currency. A player may spend $5 or $10 a month, but after two years, this figure is quite impressive.
Bloomberg put you two on the list of billionaires, and they wrote that Playrix’s annual revenue is $1.2 billion. Is this number accurate?
Igor: We are a private company and we will not talk about money when it is not necessary. There is a professional data company App Annie, they released an analysis report at the end of 2018, Playrix ranked ninth among all mobile product companies.
Dmitry: If you compare it with other IT companies in the Commonwealth of Independent States, we are one of the largest companies; if you look at the game company alone, we are definitely the largest, not one of them. But few natives know about Playrix. Everyone knows and loves our games. They are among the best in the Russian rankings, but almost no one knows the Playrix brand. Partly because Russia is a very small market for us: the revenue generated here only accounts for 2.8% of the total. Our biggest market is the United States, then China and Japan. Players in the US accounted for 40% of the total revenue, which is in sharp contrast with Russia.
How many players do you currently have?
Dmitry: There are about 30 million daily, but we are growing very fast. Our most successful product, "Dream Home", has about 12 million daily active users. 90% are non-paying players, but you can look at the data of paying players in the US, their average monthly spending is $32.
Why was the headquarters moved to another city later?
Dmitry: When we released "Dream Town", we only had one studio, and then we moved into that ill-fated building. Everyone wanted to maintain this rapid growth momentum, and we began to consider more options-including moving to another city, establishing a studio there, and so on. Talents are scattered all over the world. It is very difficult to gather them in one city, so we let some people work remotely.
We have been working like this for a long time-an office, a lot of telecommuting employees. But many of them do want to work in the office. So we have also opened studios in Moscow, St. Petersburg and other cities, where there are many employees. In this way, people can choose to work from home or go to the office. It is very important for us to let people choose a more convenient way of working.
Now Playrix has 15 studios and 1,100 employees in the CIS and Ireland. We plan to open another large studio outside the CIS.
Igor: Because of this way of working, we call Playrix a decentralized company. This means that our employees are not only scattered in different studios or telecommuting, our project team is also composed of talents living in different cities. It's not that the team in the same studio is dedicated to a certain game. All teams are decentralized. And, judging from our data, we are the largest company in this way of working.
What are the reasons for the new headquarters in Dublin?
Igor: We considered it from a legal point of view. We believe that the Irish legal system is the most ideal for us. Mature company law and low corporate tax-12.5%, this is what we like. There are also cities with lower tax rates, but the reviews of those places are not as good as Ireland. We are not the first people to come here. The European headquarters of Facebook and Google are also here. Dublin is the center of high technology.
Do you think Playrix is still a Russian company?
Igor: We think Playrix is an international company, headquartered in Ireland, with some studios in the Commonwealth of Independent States. Our management is in Dublin, where is the company's locomotive. But our roots are still in Vologda. Most employees still communicate in Russian.
Have you ever thought about keeping your headquarters in Russia before?
Igor: Of course, we have nothing to hide. Unfortunately, Russia’s restrictions on potential investors have raised concerns. They believe that anything can happen in Russia, and the prospect of investment is hard to say.
Have you also moved out of Russia?
Dmitry: We have lived in Vologda for a long time. About five years ago, we moved to Ireland. We are curious about what kind of experience it is to live in a foreign country. We are still living in a foreign land, but we have seriously thought about whether to return to Russia in the near future.
Why did you decide to move?
Dmitry: I said it because of curiosity. There are also some secondary reasons, such as climate and the like.
Igor: The company's development experience is also one of the influencing factors. In Russia, I have a feeling that someday someone will report something illegal that we have done. Everything we do is legal, but they give us the feeling as if we are committing fraud. If this is not the case, we might stay. We used to dream of living in an English-speaking European country, where things seemed to be better. At that time we were optimistic about everything. Now, we know that everything is not that simple.
Speaking of this-do you follow the situation in Russia?
Dmitry: Of course there is. We pay attention to everything and watch Meduza (local Russian news media, game state note) three times a day.
In a foreign country, what do you think the situation in Russia looks like?
Igor: If you are referring to politics, we never talk about these topics. And there really isn't much change.
For example, what about things that affect the gaming industry? Such as disabling Telegram?
Dmitry: At that time we said that this would have no effect. If it really has an impact, we will solve this problem. We have no special ideas in this regard. Play the game well, pay taxes well, everything is OK.
Igor: It may not be appropriate to express personal opinions here, and to be honest, we are not experts in this area. All in all, the general situation is quite interesting. But if things develop to the point where the network is blocked or the border is blocked, we are definitely opposed to it. We were more pessimistic when we moved out of Russia than we are now.
why? Has the situation in Russia improved?
Igor: In some cities, such as Moscow, it is indeed better. But the important thing is that we realize that we are still the closest to Russian speakers and we can understand them better. Although when I left, I thought my mind was very different, I might be more comfortable in a certain western city. In short, it is the feeling of political immigration. In any case, in the future, when we start to rethink where we live, Russia will definitely be one of the options.
What is the current state of the Russian video game market?
Dmitry: Obviously, there have been many successful mobile product companies in Russia recently. We see them growing, and the region is becoming stronger. In general, the mobile market must be paid attention to. The annual revenue of the entire gaming industry has exceeded 100 billion U.S. dollars, and the mobile market accounts for more than half of it, and it is still growing.
Have you ever thought about developing games for those traditional platforms? Make a Playrix version of "The Witcher"?
Dmitry: No, we like to stay in the mobile market, which is large and growing rapidly. More and more people choose to play games on mobile platforms, and there are also some hardcore games. Nowadays, we ourselves don’t play games that often because we don’t have time, but if we do, we still play mobile games. But this does not mean that we have no interest in PCs at all. We are considering reaching more platforms. Maybe in the future we will acquire a PC game development studio.
When is your next game planned to be released?
Dmitry: Last year (2018), we did not release any new games, and the development progress of new games is a bit behind. We will release the game only when the product is fully prepared and everyone is confident. We have no budget constraints. From the early development stage to the final release, the capital we invest in each product is different, usually around US$5 million. This is difficult to calculate because we will continue to update the product after it is released.
This year, we plan to release 3~4 new games. Since 2013, we have released a total of 4 new products-considering this, this year's circulation should be considered a lot. We released a total of 5 games, but one of them failed. We started making this game a long time ago, but the market changed when it was finished. It still made a little money, but we finally took it off the shelves. Although mobile game users continue to grow, no one can guarantee what the future will be like, and Russia is no exception. But from the perspective of user scale, Russia may never reach the level of the United States or China.