Investment Appeal of the Video Game Industry: GSC Game World and Maksim Krippa
15.11.2023
The name Maksim Krippa may not be widely known, but in business circles, he is known as an investor specializing in assets in the field of esports and computer games. In recent years, the investor has taken several significant steps, including becoming the owner of GSC Game World. These actions draw attention to the video game industry and attempt to understand the motivations of the experienced investor Maksim Krippa.
Context
GSC Game World is undoubtedly a legend in the Ukrainian and global markets. A significant part of the company's worldwide popularity comes from a product known even to those whose gaming experience is limited to Tetris on their phone. We're talking about S.T.A.L.K.E.R.
Indeed, GSC Game World once hit the hearts of first-person shooter fans. The game's events take place in the Chernobyl exclusion zone, recreated with incredible accuracy, which greatly enhances the perception. Both the context and the implementation of the idea work in favor of the developers. However, the first game in the series - S.T.A.L.K.E.R.: Shadow of Chernobyl was released back in 2007. The third addition - S.T.A.L.K.E.R.: Call of Pripyat pleased fans in 2009.
In 2010, it was announced that the company had begun creating the sequel S.T.A.L.K.E.R. 2: Heart of Chernobyl. At this stage, both the product and the timing were smooth. If Maksim Krippa had decided to invest in GSC Game World at that time, there would have been no questions. But at that time, the investor's resources did not allow for a step towards GSC Game World.
The company itself, as it turned out, did not have significant resources either. Information about financial difficulties began to appear not only in the business community but also in the press. As a result, fans have been waiting for the second S.T.A.L.K.E.R. for 14 years.
In 2020, Maksim Krippa made his first investment in GSC Game World. There wasn't much noise around the news at that time, nor was there any real news. Large professional investors do not like publicity and unnecessary chatter around their actions. But in 2023, something akin to a resonance did arise because news broke that Maksim Krippa became the beneficial owner of GSC Game World. And here many wondered: what was that? Was the investor driven by a desire to save the legend of the Ukrainian video game development market, or did he see potential where others passed by?
Altruism?
Perhaps, some patriotic motives were indeed present in Maksim Krippa. As an option, he may be a die-hard fan of S.T.A.L.K.E.R. and just got tired of waiting for the sequel to be released. But that's humor, though not without a grain of truth. The thing is, investors have to be somewhat fans of the product they invest in. This happens automatically because to work successfully in the market, you need to study it and become a professional capable of distinguishing a quality valuable product from a one-day wonder.
Regarding patriotism and the desire to invest in Ukrainian products, only indirect conclusions can be drawn. Maksim Krippa himself is in no hurry to give comments on each of his actions. But based on certain steps he has taken, it can be concluded that there is love and faith in the future of his country. Otherwise, how can we explain the presence of very different but mostly Ukrainian assets in his portfolio?
However, when it comes to large investors, it is pointless to consider their actions through the prism of feelings and emotions. But looking at the numbers and forecasts is very important.
Calculation?
Researchers and experts say that this year the profitability of the global computer games market will reach 282 billion US dollars. Already a significant figure, but more to come. The market growth rate for the next three years is forecasted at 8.76%, so by 2027, the market capacity will be 363 billion US dollars. The number of users in the market in 2027 is expected to be 1.472 billion people.
Numbers with so many zeros are a good reason to invest. And here, there are solid grounds to believe that Maksim Krippa decided to join the race for profitability and user loyalty.
GSC Game World, with the success story of the first S.T.A.L.K.E.R. behind it, looks like a worthy asset that, with the right and timely investments, can show good results. As for Maksim Krippa position as a beneficial owner, the motivation may have been the management function.
GSC Game World's failures, to be straightforward - failures, were largely due to mismanagement. The signs of which included missed deadlines, team loss, legal issues, and ultimately financial problems. Perhaps, Maksim Krippa concluded that a promising asset, if not entirely in his hands, would simply squander the remaining potential and be unable to compete for a share of the global market.
The competition in the global video game market is quite high. Among the leading countries are Japan, China, India. In the same Japan, companies do not have management problems. This is confirmed by the large number of truly high-quality and modern management systems and approaches developed and tested in Japan. In light of these arguments, it is important for an investor working with GSC Game World to eliminate the risk factor in the form of management failures.
