Russia's Pixonic Ready to Bet on Facebook, Mobile

Russian casual game developer and publisher Pixonic got off to a late start on Facebook and mobile, but it hopes to launch up to five new games for the social network and 10 on mobile devices by the end of 2011. The change in strategy coincides with Facebook’s rising prominence in Russia, Latin America and Europe where local social networks have traditionally held the lead in total number of register and daily active users. Since opening its doors in 2009, Pixonic focused primarily on Russian social networks like Odnoklassniki and MyMail.ru. In 2010, the company shifted to European social networks like StudiVZ in Germany and nk.pl (formerly Nasza-klasa.pl) in Poland. Only in the last four months has the company taken a stab at Facebook with The Island: Castaway and Little Helper. The Island: Castaway reached an all-time high of 45,172 daily active users and 326,193 monthly active users one month after its July launch before declining toward its present-day levels. “A year ago StudiVZ was the leading in Germany, Orkut in Brazil, and NK.PL in Poland. Now, they’re losing ground,” Pixonic CEO Elena Masolova tells us. “I think that those local networks still have two to four years on the market before Facebook becomes dominant.” Masolova (pictured) does note that there are still some markets where Facebook has a long way to go before coming close to the top dogs -- specifically in Asia where Mixi rules Japan, Korea has Cyworld, and Facebook is banned in China. Even Russia presents a significant challenge, she says, although most Facebook-oriented developers have been slow to realize this. “If you look at Vkontakte, Odnoklassniki and my.mail.ru, they have more than 60 million registered users each and DAU is very high,” she says. “Many [longtime] developers on Facebook were missing this opportunity. They didn’t believe the market was large enough here. When we talk to them and say the numbers in several cases of games, usually they are surprised by the game and how fast it is growing.” Pixonic’s business model is a hybrid of developer-producer-publisher that uses a mix of traditional partnership agreements and a partial ownership arrangements where Pixonic owns a majority stake in a studio in order to facilitate development on a game. Masolova says that Pixonic likes to be hands-on with its developers throughout the creative process, although there are times when the company will limit its involvement to investing in a company and then marketing its game. Altogether, Pixonic has 40 games to its name across 14 social networks, including Facebook. It also has a single title on iOS, Little Helper, which didn’t perform nearly as well on the U.S. social network as it did in the U.S. App Store, coming in at No.6 in top games the week of September 5, 2011. “Little Helper was very much a Russian game,” Masolova explains, detailing the Russian fairytale story about a magical creature that clean people’s houses. “It was an experiment on Facebook. It’s going to be our first Android game.” Pixonic is a bit more cautious in its approach to mobile, despite Little Helper’s apparent success. Rather than just proving the funds for its developers to creative native apps on iOS and Android, Masolova says the company prefers to choose its most successful social titles and handle all of the mobile porting itself. Pixonic then splits revenues with the original developer. “For mobile, I don’t believe in [just] publishing,” she tells us. “First, the IP doesn’t belong to the publisher, it belongs to the developer. Second, in the mobile space, the advantage of having traffic -- I’m not even sure that it exists. If you look at social, the advantage [of cross-promotion] is real.” Going forward, Pixonic hopes to launch up to five games on Facebook before the end of the year -- some from its existing catalogue of games, and some perhaps entirely new IP. On mobile, the company is looking at 10 titles in roughly the same time frame, of which seven will be ports. Pixonic closed a round of funding in May, picking up $5 million from VCs Ventech, Kite Ventures, and TA Ventures. Combined with two smaller previous rounds, the company has $6 million in total funding.

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Russia's Pixonic Ready to Bet on Facebook, Mobile

AJ Glasser

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