As Kazakh digital businesses attract more attention from global venture funds, certain trends have been emerged. The country is becoming synonymous with best-in-the-world fintech, while local B2B and B2C startups are gradually getting to higher fundraising rounds in their ‘unicorn run’, turning to MENA, US, and Singapore. But there is one market that remains underdeveloped throughout the world. The gaming industry involves much less red tape than fintech at scaling, but its products are yet to bring billions in revenue. Could Kazakhstan ever hope to produce great games?
Mike Fischer believes we can. The ex-CEO of Square Enix America (Tomb Raider, Final Fantasy), and ex-Head of Publishing at Epic Games (Fortnite) with nearly 30 years of experience recently became an advisor of the Kazakh gaming startup iDos Games. Having deep insight in the market trends, he thinks Kazakhstan has just the right potential to produce the next Witcher, or Battlefield. As long as it has that one special ingredient.
QazMonitor talked to Mike Fischer at the Digital Bridge 2022 forum to find out what needs to be changed in order to create an ecosystem of talents in the digital entertainment business.
What are your impressions of the forum?
It was an amazing impression. The last time I came here was before Covid and, in even those few short years, we could really see amazing progress and digital innovation and entrepreneurship - the growth, the scale, and the energy are really fantastic. Everybody in the world is cheering for Kazakhstan’s success. You know, much of the world now is becoming more authoritarian, less free, and less global, but Kazakhstan is the only country becoming less authoritarian and more global. So much innovation is coming from the younger generation, it really makes me feel optimistic.
How did you become an advisor for a Kazakh gaming company (iDos Games)?
They participated in a global pitch contest and I was a judge. There were like 40 or more companies pitching. And this was the only company that I felt was doing something special and different. So, after the event was over, I just reached out to say ‘good job, I really think you have potential.’ Then we just started the conversation, and the more I learned the more impressed I was. So I agreed to join them as an advisor.
I see dozens of games every month. As an investor, as an advisor, I’m always looking at new startups and a lot of gaming startups. What I thought was good about this one was it was about the games first. And their objective team estimated great game experience, and then to enrich that game experience with the token feature.
If you don’t want to use tokens, you still have a great game. That’s really different from most of the other startups I've pitched where basically the game is just a mechanic for monetization, and the game is nothing more than an excuse to sell tokens. And this time I just really felt that it’s a great game. Game first, tokens to make it better.
What progress do you see?
The biggest difference is that the game just keeps getting better and better. I got my hands on the game when I came here. I was so impressed at what a great quality game they’ve built. Even at this early stage, it’s fun. They also have a really fun puzzle game as well that is really addictive.
Any other honorable mentions among Kazakh gaming projects?
I’ve seen in the past other great games coming out of Kazakhstan, like the parking simulator series, and MadOut. I always loved that small studio in Almaty called Katata Games, that’s making great games I really love.
There’s incredible talent here, and the real challenge is how we can create an environment where these talented designers, creators, and engineers can get the resources they need to make their games, and then to make their games successful. Because the talent is here, we just need to build a better ecosystem.
Do gaming companies get enough attention in accelerator programs?
I think that even a general-purpose incubator has a lot to contribute to a gaming company. But i think there’s even more value if we can create an accelerator or an incubator program that’s more focused on games.
[Digital Bridge] is a more serious event, I would like to see a little bit more opportunity given for the entertainment side of business. I am so impressed when I see things like Kaspi, and Egov and a lot of innovations in Kazakhstan. But I think for even better experiences that I can have in the US. But what’s missing is not only the element of play, but the element of culture. And games can catch more people around the world than almost any other business.
When I look over at what Kaspi is doing, it’s the best in the world. But they're going to have a lot of work going market to market, country to country, fitting each country’s regulations and business environment - it’s hard. If you want to publish a game around the world, it’s just one click of the button on the Steam store or the App store, and you can touch hundreds of millions of people around the world.
There is no Kazakh book, or song, or movie that’s gonna really touch a lot of people around the world. But you could make a great game that a billion people around the world will enjoy. And I think that’s a wonderful way to share Kazakh culture, Kazakh ideas, Kazakhstan people’s creativity around the world.
I would like to see a stronger ecosystem that supports that. By the way, of course, it’s a fantastic business too: Fortnite estimates 4-5 billion USD a year. So it’s also a great economic builder.
‘The colder the winter, the better the game studios’
I have seen countries like Iceland, Finland, Poland, and Sweden become real heavy-weight influential countries in the world of video games. The joke is ‘the colder the winter, the better the game studios’.
So I just think the combination of really great creative youth culture in Kazakhstan and good technical education. And there is a passion for video games, plus cold winters.
Question is ‘how could we create a better ecosystem?’ I would love to see the university system, a university program that includes the videogame design and engineering element. And then combine that with an incubator that’s focused on games, maybe some government programs that provide some seed money. And the infrastructure that will help these games exposure: global game shows, meeting VCs around the world. And I think it will be possible to both attract the global investment in games made in Kazakhstan and also to develop a global presence. So, I really feel that Kazakhstan can be the Hollywood of videogames with the right opportunity.
‘We can’t just rely on venture capital’
I think that the talk starts at the top of the funnel with the education program that can provide some better training, then incubators. There is a role for education for the government for the investment community, I think the vcs and the investors are actually the most ready, but we need some other parts of the ecosystem. We can’t just rely on venture capital to drive this whole opportunity.
There are so many countries around the world including Abu Dhabi, Finland, Poland, Australia, where they have government officials whose job is to promote the video game industry. They have tax incentives, and sometimes subsidies to attract both local talent and overseas talent.
In your opinion, which model of success works for Kazakhstan?
In Poland, the success of CD project red really started with the Witcher, which is based on the Polish novel. So it really is a deeper expression of the Polish creative community, and now of course we have CyberPunk 2077. A lot of these studios started as low-budget work for higher studios that got work because they were cheap. And now they’re world class studios, because they are the best at what they do.
On the other hand, the gaming industry in Finland got its big push when Nokia went bankrupt. And all of these experienced local engineers lost their jobs. A lot of them became mobile game designers. When their studio became a success, those co-founders took their money and invested in their friends’ studios. And now it’s like an atomic chain reaction for each studio that’s in success helps the other studio to become a success. And it's one big positive community.
Certainly, Kazakhstan is doing really well in e-sports and competitive games. But I’ve seen an incredible range of creative ideas in the video game sphere, so I think it’d be possible to have success across all kinds of different genres.