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Yuriy Krasilnikov: Cyprus’ IP box provides great business conditions

 (Source: Cyprus Business News 12/02/2024)

According to Yuriy Krasilnikov, the CEO and Co-founder of Made on Earth Games , there are many benefits of doing business in Cyprus, including the presence of English law, investor opportunities and a family-friendly environment.

Speaking to GOLD magazine as part of a cover story featuring 18 of the top gaming developers based in Cyprus, he also reveals more about Made on Earth Games’ achievements and future plans.

How did the focus on mobile gaming, particularly in the strategy genre, come to define your game development strategy?

Around two years ago, I met with my friend Alexey Ilin, the studio’s co-founder and CPO, for lunch, and he asked me, “Yuriy, isn’t it time for us to start our own studio?” We had known each other for over six years, worked on joint projects and understood each other’s strengths. However, we still had to decide the project’s genre and, most importantly, the studio’s principles. Choosing the game was a bit easier: Ilin has impressive experience in products, from producing the PC strategy game Disciples to being recognised on Google’s and Apple’s ‘Game of the Year’ lists for other projects. I have a strong background in business development and market understanding, plus we were both strategy game fans. Having checked trend reports, we realised that the 4X genre occupies a huge niche, with over $4 billion a year in in-game purchases and it desperately needed new products. Considering that ‘old-school marketing’ wouldn’t work, we shaped our principles accordingly: Everbright is our reimagining of the 4X strategy genre, aiming to make it accessible and engaging for a diverse audience.

Walk us through your most successful titles. And what would you say makes a successful mobile game?

I’m hopeful that Everbright, which is currently in development, will be our most successful project. It’s a cross-platform 4X strategy game for mobile devices and web browsers. Its accessibility and depth will appeal to casual, mid-core and hardcore gamers. Using proven mechanics and approaches, Everbright isn’t cloning other games but reinterprets them, adding a fresh twist. In the last couple of years, successful projects haven’t been clones. Royal Match, for example, is a familiar match-three mechanics but with a totally different dynamic, which is a significant unique selling proposition. Monopoly Go also did a fantastic job with its core gameplay, even though its meta might resemble existing games.

Over the past five years, the games market has witnessed substantial growth, reaching US$187.7 billion in 2023 and projected to hit US$212.4 billion by 2026, with mobile gaming taking the lion’s share. What major factors have fuelled the industry’s growth, particularly in mobile gaming?

The market has really grown, particularly during the COVID-19 pandemic, driven by accessibility – almost everyone has a mobile device and you’re just a few clicks away from entertaining content on your device. Despite a slowdown in 2022-23, several genres still show a small but positive trend. Future growth will be driven by emerging markets and countries where there’s untapped potential. While developers face marketing challenges today, since it’s not possible to set up precise targeting, it might lead to interesting and unique games, rather than the recent trend of copying. There will be a purge of such projects, simply because they are losing profitability.

How have data privacy rules, such as the EU’s GDPR and Apple’s Identifier for Advertisers, impacted your operations, and how have you adjusted to them?

When Apple flipped the switch on IDFA, it was a game changer since you could no longer use targeted ads to find players with specific characteristics. And soon, Google will implement similar rules. It’s leading marketing away from the familiar performance-based approach, which was a fairly accurate formula for predicting returns. Marketing is now turning into real marketing and not just a game of formulas and targeting spreadsheets. Ideally, it should mean fewer misleading ads, which everyone’s tired of. It will definitely be tougher for older products and studios that won’t adapt their product-marketing strategies. We understood from the start that the 4X genre, despite its large revenue, was too niche, so we incorporated features that should work well at launch, from the ‘layered cake’ approach to expanding the genre’s audience to creating an IP that has multiplatform potential. And, of course, our pride, which is our team. True to our name, we work with top professionals from 11 different countries!

In recent years, several mobile game companies have relocated to Cyprus. What factors have driven this migration?

Cyprus is a wonderful, friendly country with an amazing entrepreneurial community. It’s well-known that Cyprus’ IP box provides great business conditions while the presence of English law significantly simplifies investment deals. A key aspect is investing in companies that are incorporated and operate from Cyprus. Take, for example, our investors GEM Capital, who are based in Cyprus, or The Games Fund, which invested in us from the day we established our company here. The country is doing a lot to attract talent, which has a cumulative effect. Relocating your business to the island comes with the opportunity to choose a city that’s right for you and your family. With geopolitical instability in many countries, Cyprus has become a rational choice for relocation and conducting business.

What specific changes – in terms of policy, infrastructure development or any other area – do you believe are essential to bolster Cyprus’ growth as a hub for the industry?

The recent law to accelerate citizenship in Cyprus is an excellent initiative. Those of us who have relocated to Cyprus appreciate the immense effort that has gone into it. I can say that the further digitisation of immigration procedures will greatly add to the continued economic development of the country and the games industry. Regarding infrastructure, we understand that the influx is too large to immediately meet the demand for kindergartens and schools. Since many people are relocating with their families, the need for educational institutions and spaces will only increase. Also, simplifying the process for legalising doctors and teachers, in my opinion, would provide a significant foundation, covering basic needs without hassle. After all, if you’re sick, it’s hard to focus on work, or if you realise that your child can’t get into a school due to lack of space, that is a major concern.