Featured Startup Pitch: Russian mobile game builder Playtox is targeting countries and phones underserved by other developers

By Editor October 16, 2013

Dmitry Sergeev, PlaytoxBy Dmitry Sergeev, Playtox co-founder and CSO

Elevator Pitch: Playtox is a leading mobile developer of free-to-play, browser-based MMO games, which can be accessed from the browser of any mobile phone—whether it’s a feature phone or a smartphone. Over 45 million users across the world have experienced the feature-rich worlds that Playtox has created. Hundreds of thousands of players enter these social games every day from countries that include the United States, Brazil, India, Vietnam, Indonesia, Mexico, Russia and many more.

Product/Service Description

My Farm, World of Shadows, Sea Storm, and Mobiville are just some of the free, multiplayer game worlds that we have developed over the last couple of years. Since our products are browser-based, users can enjoy our games from their laptops, tablets, phones, and social networks, connecting them with friends and players from across the world. Updates are made automatically, ensuring that all users are experiencing the best graphics and gameplay available.

Founders’ Story

At 19-years-old and the founding of my first company—Shamrock Games (which is still successfully operating)—I launched my first SMS MMO game, which quickly gained more than two million active users across Europe, and earned more than 22 million premium purchases in only a month. Driven by this success, I founded Next Media Group, which is now one of the biggest mobile VAS providers in Russia, in 2004 with two friends of mine. In fact, it was named one of Russia’s top 30 Internet companies in 2013 by Forbes, and chosen as part of the Top 100 Innovative Companies in Europe in 2013 by Red Herring. While serving as the CEO of Next Media Group, I co-founded Playtox with Artem Zinoviev. Artem, like myself, is a self-proclaimed gamer, and we have loved turning one of our favorite pastimes into a successful venture—growing Playtox into one of the leading developers of Russian mobile browser-based MMO games.

Marketing/Promotion Strategy

We have put a strong emphasis on building partnerships with other top industry leaders in the space to further promote our games. This includes strong partnerships with leading Russian operator MTS, where we have added our online games to its deck; life:), one of the largest Ukrainian mobile operators, where we have an exclusive agreement as its online games supplier; and a strategic partnership deal with Opera Software, providing mobile browser games for Russia and the Commonwealth of Independent States (CIS). We also work with one of the largest social networks in Russia—Odnoklassniki, to monetize its users via our games.

Beyond partnerships, much of our growth is organic. Our games are social (in fact, each active user generates about 500 page views daily, and several million users have installed them via their social networks), which is great for spreading our name by word-of-mouth.

Market Opportunity

By providing our gaming apps outside of app stores like Google Play and the Apple App Store, we are able to better capitalize on some of the fastest-developing markets—such as feature-phone and international markets. BuzzCity estimates that 78 percent of Brazilians, 77 percent of Indians, 70 percent of South Africans, 53 percent of Mexicans, and 46 percent of Russians still use feature phones. As such, our payment options are not just limited to credit cards and app stores. We are able to localize our payment for developing markets, where alternative payment options are critical for success.

It’s not just the growing markets that are attractive, but also the mobile market in general, especially when it comes to gaming. According to New Relic, people check their phones on average every 6.5 minutes, which comes out to about 150 times a day. Games account for 43 percent of their usage.

Finally, our games open a huge opportunity to monetize any-and-every mobile website like never before. When our partners promote our games on their mobile sites, we offer approximately 50 percent of the revenue generated from customers that click on those links to those partners. What’s more, for every game promoted, we show our partners information on how many people were sent from their portal to our games, how many of those people registered, how many became players, and how many spend money. So not only are we engaging and entertaining our customers from any mobile site, but we also give our website partners the key to monetize their services.

How We Differentiate From the Competition

Playtox is the only developer that can produce high-end quality games that look perfect on any screen—from feature phones to powerful smartphones. We understand how to deliver top-quality content to our customers more than any other VAS provider.

We also have a fantastic business development team with significant mobile experience, who have been able to leverage their years of experience in the industry to develop sophisticated mobile media solutions and platforms.

Business Model

Our main strategy is Games-as-a-Service (GaaS): all are free-to-play but users can make in-game purchases to assist them in their gameplay. For example, with one of our games—My Farm—we currently are able to make roughly $4.50 per month per paying user in Eastern Europe. These players have been staying active in the game for three-to-six months.

Current Needs

HTML5 is a promising technology, but it needs to grow to worldwide markets and penetrate mobile web development. However, we believe that HTML5 will be embraced in the coming years. The growth of mobile social networks and game integration with them will be very important to us, as players from this area provide the best monetization opportunities.

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Playtox_logoWebsite: www.playtox.com

Founders: Dmitry Sergeev, Artem Zinoviev

Headquarters: Novosibirsk, Russia

Year Founded: 2010

Investor: Runa Capital

Twitter: @Playtox

Facebook: facebook.com/Playtox

AngelList:  angel.co/playtox

CrunchBase: crunchbase.com/company/playtox