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Alex Chachava achieved an extraction last fall when he acquired much of My. Games and moved the company’s operations out of Russia due to the geopolitics surrounding the war in Ukraine.
In September 2022, VK announced that it had sold all My. Games to Chachava, managing spouse of LETA Capital, for $642 million. In December, My. Games moved to Amsterdam and opened offices in Cyprus, Korea, Spain, China and Finland. . Today, Chachava is the “leading alchemist” and owner of My. Games and is taking steps to re-establish the leading game publisher outside of Russia.
In April, he announced that the company would relaunch a new edition of Warface, a popular shooter, with a new logo name. The former Warface game in Russia is now owned by Astrum Entertainment, which is a completely separate entity from My. Games. But Chachava said My. Games has another 1500 people and much of the core of the old company, and that it plans to attract Warface players to its new title.
In line with its global expansion strategy, My. Games has focused solely on the progress of overseas business and the infrastructure of its widely distributed team. One of the moves also occurs with the opening of a workplace in Abu Dhabi.
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One of the company’s methods is to concentrate on the markets of the Middle East, North Africa, Pakistan and Turkey (MENAPT), where the game is being developed but is much less governed by established brands than in other regions. There are about 377 million players in this region, compared to 210 million in the United States.
I spoke with Chachava about those moves and he about the geopolitics of the game. Here is an edited transcript of our interview.
GamesBeat: How did this total adventure with My. Games start for you and [what led you] to buy the company?
Alex Chachava: I have several answers. Let me start with my previous steps and my career in business. So I made my first capital in B2B software. . . Commercial software. I started my first business 20 years ago. Together with my partners, we have built a successful B2B SaaS software company. It was even a little bit before SaaS, so it was just a general B2B software in SaaS.
About 10 or 11 years ago, I started my own venture capital fund. It’s not a very typical venture capital fund, as I’m the biggest LP, so I invested my own money. We are a venture capital vehicle and have made many successful investments in my mind. My most successful investments have been in B2C software. One of them, a ride-sharing app, in which I am still a shareholder. It’s like the biggest ride-sharing app of the moment after Uber, and then there’s Novakid: it’s an information platform. It’s probably the largest of its kind in Europe, and I learned how competitive and confusing it is to do B2C business compared to B2B.
In various aspects of my career, I have had contact with the video game industry. Personally, I am a racing guy and for me, the maximum vital party is Formula 1. But in entrepreneurship and business, for me, the maximum vital party. Festival is the video game industry, because it’s a massive business. There will have to be between 4 and 5 billion people betting PC games and thousands of studios competing in a game point to attract the attention of users. In my opinion, it is the most competitive and challenging market in the world.
It might be a bit emotional, but when I had the opportunity to buy My. Games at a very high price, it was like a business challenge for me.
Of course, I made this transaction as an investor and as an entrepreneur because I have a transparent vision and strategy of what I want to achieve. But there is also an emotional part.
I talked about Formula 1 and that I participate in racing competitions. And earlier in life, I played a lot of football. Soccer is the competitive sport par excellence, perhaps not in the United States, but in the world. Thus, the gambling industry turns out to be the most competitive industry. For me, it’s attractive to be successful there as well, because in a sense all marketers are like athletes.
GamesBeat: And I guess, you know, in some ways, it’s a wonderful opportunity to be able to buy My. Games, but I also wonder how impactful Array is, you know, that those cases arise, you know, with the war, and you know, the fact that we had to do something with some of those Russian companies. . .
Chachava: Yes, definitely. I would say that strange and horrible things have happened in recent years. But I would say that starting with COVID, strange things were happening in global markets, adding games. And all earthquakes. I will tell you what happened in the last two years, after this terrible war. And now we have an economic recession and even a decline. And not just in the gaming industry, but throughout the economy.
I guess we are going through very difficult times globally. And there are even more challenges. It was simple to be in the gaming business in 2021, when the market was experiencing double-digit growth. But now it’s much more complicated, especially for corporations that set up shop in Eastern Europe, Russia or Ukraine. Western European countries are not feeling very well at the moment. Because you know, it’s a horrible and relatively important conflict.
That’s why My. Games will soon open more centers and s. We have our two main hubs in the Netherlands and Cyprus. When we load a new one, it’s not just having an extra load for us: I like to call them “hubs” because it’s a new size for our strategy.
Our next hub will be Abu Dhabi, because the MENA region is growing very rapidly. In fact, it continues to grow even now, while the overall market is declining. The MENA region is said to be the fastest growing region. Video Game Market. The number of actors exceeds 370 million men and women, and we are seeing great interest from local actors and investors. They need to invest and they need to launch a big new gaming convention for this region.
It is also because the MENA region is a kind of gateway to the entire Arab market, the North African market and even some Asian markets. It is very convenient to do business with India, for example, from the United Arab Emirates.
The opening of our new hub in Abu Dhabi is a strategic resolution for us as we aim to be much more active in the Middle East. Previously, our main markets were Europe and the United States, and now, with this new hub, we are opening a new chapter. In fact, we will continue to be very active in the United States and Europe, but we learned that our world is very big and that there are many players outside the West. We plan to be much more active in the East, and we know that our titles can succeed there as well.
GamesBeat: Yes, how difficult is it to locate the right price for the acquisition of My. Games?I think they gave it to you for less than a one-time sale and the year before, right?But what a smart way to see its price at the time you bought it?
Chachava: Well, you know, M&A multipliers can vary greatly, depending on market dynamics or the country scenario. Or it’s going crazy when, for example, a Saudi company buys an American company, as we saw recently with Scopely. The multipliers were not disclosed there, but we know the total profit and we know more or less the profit of Scopely and the total price of the transaction.
As for My. Games, it was the opposite situation. As you know, many Western corporations were promoting their Russian assets at very low values. Avito, for example, was bought through a local investor. Avito is the largest marketplace site [and classified ads] in Russia. 7 billion, and now, when South African investor Naspers sold his stake, it was valued at only $1. 5 billion or so, making it 4 times cheaper. So, my acquisition was more or less in line with this new market price, because last year usually, it was Western investors like Goldman Sachs and Morgan Stanley, who had a large portfolio in Russia and were leaving. As I know, there were several potential buyers and it was a very competitive process. This value was fair for this situation. Because after the acquisition, we had to leave Russia completely. It was just under 20% of our sales, but it’s still a vital market for us.
So My. Games definitely lost price because we had to leave a vital market. But we still have a portfolio of securities. We have amazing studios. And we look forward. Our strategy is to be one of the leading gaming companies in Europe. This year alone and next, we have about 15 big new titles to come. Some of those games are already in progress and testing, while others are more advanced, but we have massive plans. .
I hope that we will continue to grow and that we can create and release many new hits. Because gaming is still a hit-based business, lately we’re focusing on new titles. And that’s our main strategy, to expand new games.
GamesBeat: And what will be the challenge of taking the game from Warface and the engineers who created it, and then creating anything the player loves and plays, even if it doesn’t have the Warface name?It’s a very different business challenge than what we see regularly, is it rarely the same?That you deserve to take an existing game and try it out to move the audience to a new game that looks a bit like the same game?It’s so different from anything that’s actually happened. .
Chachava: Well, we’ve noticed it many times in the afterlife when game developers took the name of a popular game and remastered it to reconsider it or make it more modern. The fundamental fun was pretty much the same for the players, but new technology, new graphics, and new gameplay came up. Many successful series have done this. Fallout, for example, are two other games, but with the same soul. Or even with Counter-Strike, we saw something like a new generation. There are many other examples. We plan to do our best to create a new game based on the taste and delight of that game, because we do it with our existing names and load new features, writing new gameplay.
For example, for our flagship name War Robots, we’re adding a new PC game based on the same story, say. And it’s like a non-unusual thread when you’re playing with platforms and you need to onboard your audience, bring their mobile game to new platforms. Because looking to attract a totally new audience segment is very expensive. Therefore, we are investing more in the brand, investing more in the quality of the game and interacting more with our existing audience for our user. Acquisition model.
GamesBeat: And then the move from Abu Dhabi, what kind of opportunity is that?
Chachava: Abu Dhabi is incredibly interesting. It is a very convenient hub for our new operations management. It covers only the Arab market, but also the African and partly Asian markets. So this is a new step for us in several new territories.
UAE officials have received a wonderful response. They have been wonderful. Our Abu Dhabi hub will be at Yas Creative Hub. It is a very beautiful campus built by the Abu Dhabi government for the arts industry and provides corporations with new opportunities to expand their business in the region. Ubisoft also has a workplace there, and many other game studios and expanders are located there. Nvidia has a relatively giant desktop. YAS Creative Hub has a very modern infrastructure for cloud gaming and game expansion. It’s a very convenient position to work in, and the Abu Dhabi Investment Office and AD Gaming, the organisation set up to help gaming studios and gaming corporations, have loved it. do business in this region.
We can see that they are making a huge investment in gaming and conferencing platforms, so we see smart opportunities here. can our ambitions for expansion and business progression in new, new and constantly growing regions. And we see that it will be less difficult to function in Asia and have a giant central workplace in Abu Dhabi.
GamesBeat: I guess, how. . . you know, I think, I think My. Games has learned, I guess the importance of where your headquarters are and in what country, I guess. COVID, now, where so many other people are running remotely. . . How is it still important, you know, where your company’s headquarters are and where your offices are?
Chachava: Well, I’m a bit old-fashioned, however, I prefer paintings in the workplace and I prefer to see the faces of my colleagues and colleagues. But the truth is the truth. After COVID, the truth is that our habit is to paint from a distance. For many, it’s not even a habit, it’s their new way of life.
When I look at my children or our young workers, for them it’s the new normal. So for them, being in the workplace every day is not what they prefer. But we see a lot of our workers, for them just replacing where they live from time to time and for them, they don’t even know where their home is, so we have to adapt if we need to attract skills to our company and our industry. One way to do that is to open up these new regional centers. Soon we will have six or seven centers in other parts of the world where our team will be to see our workers face to face at least once a week or once a month.
But I don’t think it’s imaginable to bring all those other people back to the workplace five days a week. So yes, we have the biggest workplace we have lately in Limassol, Cyprus.
Our headquarters are in Amsterdam, historically, and we are opening this new logo center in Abu Dhabi. We have also opened a workplace in Armenia for those who do not need to live too far from Russia because they have elderly parents or for such reasons. And yes, we are now contemplating opening several more centers. Turkey, for example, because Turkey is a very attractive market: a lot of talent, but the economic scenario is not good. This is another promising place, and many Russians moved to Turkey, as it is one of the simplest and fastest places to install.
GamesBeat: I don’t know if you know the word diaspora very well. . . I wonder what the diaspora of Russian video games will be like. And in 10 years, in a way, mass migration is very tragic. . And in many ways, it’s also an opportunity, I guess, and I wonder how it will all go, like, you know, endings, they’ve probably never had such a migration of players, you know?
Chachava: Well, that’s a fair and very strategic, very serious consultation. One of my passions is history, and I’ve spent a lot of time analyzing other people’s giant equipment migration since the Jewish migration two centuries before Christ. It’s probably one of the wonderful migrations, but we saw many other waves of migration: Indian migration to the United States or Chinese migration. What is the result of all this? Well, there’s a statistic I’ve noticed lately that 44% of unicorn founders are first-generation immigrants. So, you know, when someone who was given skill absolutely adjusts their life, their lifestyle and immigrates, sure, it’s a complete change, but they still need to do business and they still need to create something new. Yes, it is much more complicated for him, because he is creating this new business in an unfamiliar environment. Even though he has already done business globally, when he moved and his circle of relatives replaced the environment, the country, he has so many new things to solve, he is definitely out of his comfort zone.
But on the other hand, your commitment to building a wonderful new task or starter game is much greater than if you had stayed in your convenience zone because you have just cut ties and need to come to this world, which is not very pleasant, which has not been very comfortable for you, It must go global if it is to succeed. That can still bring price to this global.
So, to answer your question directly, yes, I think in 10 years we will see a lot of fake corporations created or directed through marketers not only from Russia, but also from Belarus and Ukraine, because the Ukrainian gambling industry is also very strong. there are many wonderful games that have come from Ukraine. And the groups are still working. You know, here in Cyprus, between 15,000 and 20,000 more people came from Russia and about 15,000 came from Ukraine. Therefore, the two largest diasporas in Cyprus are Russian and Ukrainian.
In addition, most of the diaspora comes from computers or games; I think games represent a part of that. not two diasporas. And I even know several families that have been created between Ukrainians and Russians here in Cyprus; or moved to Cyprus, fell in love and started a new family. And that gives me a little bit of optimism about our future.
GamesBeat: That’s a very thoughtful answer. I guess somehow, you know, you have a lot of the same other people. I was wondering if, you know, and maybe you also wondered if other people still Russian company My. Games, you know, and whether or not it had, you know, had a headquarters somewhere. But it turns out that the fact that other people had to move and, you know, be in a very different country, that, that, that’s actually accepted that is, it’s another new business, now that it’s going somewhere else.
Chachava: So we can’t replace our roots. It is a truth that we have Russian roots and we have many workers who come from Russia. But we are already a foreign company for many years if you take a look at our key markets globally. Our team has also been very foreign for many years and we continue to rent new foreign talent.
When we make such moves, it is an even more wonderful compromise in the face of this total situation. It shows that we are, in fact, a global company and that we must achieve all our ambitions, all our goals. For the maximum of my colleagues, they had to become immigrants to continue living their hobby for making wonderful games. This is a great commitment and a huge challenge, because if they fail, they will have great disorders in an unknown country with their family, etc. But they do and I respect them for that.
I think we can show the market that we’re still a very transparent and effective company that creates wonderful new games for the global industry, despite all those horrible cases we have to deal with.
GamesBeat: And how many other people do you have now and how does that compare to what you know, before the move?
Chachava: We have about 1,500 more people running on My. Games, a little less than before because other people can’t physically move because their parents have health problems or anything else. But I can say that many great game studios, and all of them, like 99% of the main people, or other people who, who are like the artistic elegance of game designers, we have been lucky enough to keep them in our company.
So corporate is still very strong. And we were lucky enough to keep all our biggest inside. So we can move forward, and we will move forward.
GamesBeat: How much disruption have you noticed in the big change?And then, has it improved?
Chachava: We have faced many challenges, but we also have many opportunities and new technologies for the game. This year it’s all about AI: that’s probably the biggest challenge. But with AR and VR, we also see other platforms starting to converge with each other. So, maybe in the short or long term we will see the unification of gaming platforms. For example, you can start playing on your cell phone and continue on your console. . . Or the big screen will play from the cell phone because, you know, the number of players with a remote control that uses the cell phone as a platform is growing very quickly.
So we have entered a very attractive period. The economic scenario is quite difficult, and this indeed has an effect on the gaming industry. COVID is over, so the old tactics of life seek to return, but they never will. come back absolutely because we know we have already changed.
And we’re also seeing a lot of new technologies in computing and gaming, which will replace gaming very soon, and the way we expand those games. Therefore, it is a very attractive time. And difficult. And you know that even the word crisis in Chinese is composed of two characters: one for opportunity and one for threat.
We are reaching a very opportunistic, but at the same time very difficult period. I don’t like it when horrible things happen, like wars, earthquakes, etc. But I appreciate the conditions that require you to be very creative, very ambitious, and very focused, to succeed over the demanding conditions you face. It’s anything that motivates me to keep doing business and for new business.
GamesBeat: And it turns out that geopolitics has affected the video game industry more than ever. And I wonder if you have any recommendations for corporations dealing with geopolitical realities.
Chachava: As I said, my fondness for history brings me many advisors from beyond and recommendations from wonderful scientists or writers. I don’t know what recommendation or how to express it. . . I think the most productive recommendation is to focus on your core business, your core business, and what you do. Intelligently take care of your circle of family and team. Stay hungry, stay stupid, and be very ambitious.
Because human beings have so much inner strength and inner dynamism within us. We can’t even believe how, what we can do, what we can accomplish until we start this. So my recommendation is that you be very ambitious, in yourself. Be very stupid and be very hungry. And anything is possible, even if everyone opposes you.
GamesBeat: Those are very clever answers. I wonder if he has a specific answer when other people ask him about the war. To hear that or anyone, you know, is someone asking that question?
Chachava: I made a very transparent statement the day after this terrible war started and you can find it on my social media. We signed a petition with other Russian and Ukrainian investors and venture capitalists; Almost a thousand more people signed this petition.
So it became transparent. . . And, as I said in my message, I definitely hate any kind of war, but I try to focus on what I can do. I focus on the positive things I can do for society and for the market, for the global economy. I’ve never been interested in any kind of politics. I’ve always been just a personal entrepreneur, dreaming of the kind of price I could bring and making some money to reinvest in other smart businesses. Startups or attractive companies.
GamesBeat: All right. Thank you very much for the interview.
Chachava: Thank you very much. Big questions. It’s exciting to talk to you. I hope you have good weather and a big convention in Dubrovnik. It’s an amazing city and the castle is one of my favorite castles in Europe.
GamesBeat: Yes, it’s beautiful.
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