Return of the pirates. How sanctions following the invasion of Ukraine have reshaped Russia’s video game industry

Meduza.io

Gamers at the Games of the Future Kazan 2024 international competition on February 20, 2024

Russia’s State Duma is moving forward with legislation mandating new “authentication” requirements for video game sales, possibly putting the state on a collision course with foreign digital distribution giants like Steam and GOG. Whether or not the draft law upends online game sales, nearly three years of full-scale war with Ukraine have already twisted the industry in Russia in costly ways. To get a handle on the trends and trajectory of Russia’s gaming world, Meduza spoke to our newsroom’s own resident video game and IT expert, Mikhail Gerasimov.

Background

• Russia proposes mandatory content labels and authentication of video game purchases. It could mean the end for services like Steam and GOG.

— Lawmakers in the State Duma recently introduced legislation to regulate the distribution of video games in Russia, but are gamers in Russia buying things legally in the first place? The stereotype is that all these people just pirate the games they play. Is that an unfair assumption?

— Unfortunately, statistics on the level of digital piracy in Russia are collected too inconsistently (especially for specific categories like games, movies, or music), making it hard to say definitively how piracy levels vary depending on market conditions at any given time.

When it comes to gaming, I’d look at it across three periods. First, you have everything up until the 2010s. During this period, piracy really was widespread in Russia — not just for PCs but also for consoles, which were relatively easy to hack to run unlicensed games.

The second period spans from the early 2010s until the onset of the Ukraine war in 2022. During this time, piracy levels fell for several reasons. Chief among these was the growing popularity of Steam. Valve’s digital platform offered a wide selection of games at affordable prices. Steam’s regional pricing policy accounted for local economic conditions, making games significantly cheaper in Russia than in other regions before the war. For example, Steam’s prices in Russia for high-budget AAA games at launch were half the cost of their console counterparts. And regular discounts allowed customers to save even more.

The advent of new anti-tamper systems, such as Denuvo, also impacted piracy rates. Not all games were cracked quickly; for some users, this became an incentive to switch to legal content. At the same time, the Russian authorities started actively targeting pirate resources, and new “permanent blocking” measures significantly reduced traffic to such sites. These developments gave users a choice: continue seeking workarounds or get the game they wanted with a single click at a relatively low cost. A certain number of users went with option two.

As for consoles, eighth-generation systems proved far more challenging to hack than their predecessors. Additionally, the rise of game subscription services (like Xbox Game Pass) gave users access to hundreds of games for a modest fee.

The third period began after the full-scale invasion of Ukraine. Many gaming companies exited the Russian market, and Russian bank cards could no longer be used directly in digital stores. This eliminated users’ straightforward access to games, prompting some to revert to pirated content, as its convenience became comparable to the hurdles of purchasing games legally (with the added benefit of saving money). The Russian authorities even began openly advocating for the piracy of foreign content. (However, the state’s Internet regulator still hasn’t unblocked Russia’s once-popular torrent trackers.)

So, piracy levels in Russia have clearly risen since 2022, but good luck quantifying that increase.

— How do Western sanctions affect Russia’s gaming industry? Are Russian gamers restricted from accessing certain games, or is it still possible to play without issues? Are Fortnite, PUBG, Roblox, and Minecraft still available?

— As with most digital services, the restrictions on payments have really impacted the industry (more specifically, they’ve directly hit consumers). Russian users can no longer make payments with local bank cards in Steam and other digital stores, forcing them to find their own ways to bypass these limits or rely on intermediaries.

Russian banks and mobile operators can play this role (for a fee), helping gamers top up their wallets in Steam, console digital stores, or specific popular games like Fortnite. Users often need accounts in specific regions, which further complicates things, especially for gamers who got used to the convenience of one-click purchases before the war.

The second issue is that several major gaming companies chose to stop selling their games in Russia after the war began. These include Microsoft (along with its subsidiaries Activision Blizzard and Bethesda Softworks), Sony, Nintendo, Electronic Arts, Ubisoft, Take-Two Interactive (including Rockstar Games), CD Projekt RED, Capcom, Sega, Square Enix, and others. As a result, it’s no longer possible to buy games from these publishers in the Russian region of popular digital stores. Also, the three major console manufacturers — Microsoft, Sony, and Nintendo — have stopped importing their gaming systems into Russia.

Purchasing activation keys for specific games from distributors can bypass these restrictions. Fortnite, PUBG, and Roblox are all still available since they're free-to-play, but payment restrictions block in-game purchases unless you find workarounds. Minecraft, which Microsoft owns, is a paid game, meaning you can’t buy it directly from Russia. Users need to get help from intermediaries, or they have to access it from other regions.

— Scandals in the e-sports world have resulted in Russian gamers being banned from competitions or denied prize money. Has this become a fixture of professional gaming?

— If we’re talking about official restrictions introduced by certain companies and organizations, then yes, they’re still in effect. For example, Epic Games has banned Russian residents from participating in Fortnite tournaments with cash prizes. I’ve heard about isolated cases of Russian teams and individual players being excluded from competitions solely due to nationality, but that was the organizers’ private initiative.

I don’t think there are any systemic restrictions based on nationality, especially if e-athletes agree to compete under a neutral flag.

— What are the most popular video games in Russia today? Are there domestic digital stores, or do Russian gamers prefer foreign platforms like Steam and GOG?

— In terms of retail sales, competitive games have always been popular in Russia. For example, FIFA (now called EA SPORTS FC) and Mortal Kombat. Also, GTA, Battlefield, Call of Duty, and Assassin’s Creed are very popular — it’s pretty much the same as everywhere else in the world. Recent statistics from a major Russian retailer confirm that these trends haven’t changed much since the war began. The situation with online games is similar: At any given time, the list of popular games in Russia doesn’t differ much from the global Steam Database chart.

Shortly after the war started, Russia launched its own digital store, VK Play. According to the platform’s own statistics, it had more than 45 million registered accounts and more than 14 million monthly active users by mid-2024. However, it’s unclear how reliable these numbers are — VK likes to inflate the metrics for all its services. And it’s hard to call the platform a full-fledged store since it often just acts as a middleman for Western releases, reselling activation keys for Steam or GOG.

— Which game studios in Russia are considered the best today? Do they sell their games abroad? What’s the most popular?

— Many well-known game studios left Russia after the full-scale invasion of Ukraine and set up operations in other countries. For example, Owlcat Games and Mundfish are now based in Cyprus. The companies’ relocation was motivated by multiple factors, including mitigating damage to their reputation (it’s much harder to operate when everyone associates you with a country responsible for starting a war) and business common sense (it became difficult to receive payments from Western publishers and partners). Even so, Mundfish maintains ties with Russia; its shooter Atomic Heart is sold in the Commonwealth of Independent States region via VK Play, while it’s available in other countries on Steam (its publisher is the French company Focus Entertainment).

Some companies split their operations. For example, Wargaming, the creator of World of Tanks, transferred its business in Russia and Belarus to Lesta Games, based in St. Petersburg. Lesta Games has since developed the same game as an independent project under a new brand, Mir Tankov (“World of Tanks”).

Arguably, the most prominent company still operating in Russia is Saber Interactive. This year, it released the successful Warhammer 40,000: Space Marine 2, which is sold worldwide. Saber previously worked on games from major franchises, including Halo. But even Saber’s situation is complex. It has an office in St. Petersburg but is formally considered an international company headquartered in Florida, with offices across Europe.

As for studios that have emerged (or become more active) since the start of the Ukraine invasion, it’s hard to point to specific examples. Most are only starting out in game development and don’t yet have any successful projects, let alone games that would attract attention from Western audiences.

Interview conducted and translated by Kevin Rothrock