In his ongoing series "Crypto Opinion with Mike Ermolaev" featuring interviews with prominent figures in the crypto space, Mike conducted a Q&A with Arkady Volozh, a tech entrepreneur behind Yandex, a Russian tech and internet giant that develops intelligent products and services powered by machine learning. This interview is a co-authored work with Cassio Gusson.
In his current position, Arkady Volozh serves as executive for Latin American operations for Yandex Games, having stepped down from his previous role as CEO and executive director of Yandex.
In the early 1990s, his knowledge and vision laid the groundwork for what we now know as Russia's Google. He continues to be an inspiring figure and a role model for aspiring entrepreneurs and tech leaders, which is why I reached out to him for a discussion.
One of the first actions of Yandex in Brazil was Yandex Games. Why was the game store chosen?
Let me tell you about our platform, and then I'll explain why we decided to expand our service in Latin America.
First of all, Yandex Games is not a game store. Users can play all our games for free and without any downloads. That's the principle behind the platform.
Yandex Games is a catalog of browser games that can be played on any device; it doesn't matter if you log in from a computer or a smartphone. Our assortment of games is massive: we have over 15,000 in 30+ genres. To help gamers navigate our collection, we use AI: ML technology to analyze what users have already played and recommend games based on what they liked.
Our platform is actively developing on the international market and is already available in over 70 languages. Why? Because if a developer translates their game into a new language, it automatically starts attracting users who search the internet in that language. They'll see an ad for the game and can access it.
In terms of international expansion, translating games has proven to be effective. This distribution strategy lets you create a portfolio of games for a specific region in a fairly short period of time. But we have to remember that every region is unique and has its own popular games from local developers. We try to give users the best content possible and that means taking their wants into account. So if a game is popular in a country, we can't ignore it; we should have online versions of popular local games, not just foreign content.
That's why we try to find local partners everywhere where our platform is available. Latin America is a large and promising video game market, coming in at $3.5 billion. Recent data on Brazil shows that 75% of the population plays video games on a regular basis. We hope that with local developers we'll be able to offer those users a completely new and positive gaming experience.
Yandex Games is a platform built into Web2, as are other ones from Yandex, and now companies and social media are evaluating the change to Web3. How does Yandex Games see this trend? Is it only too much hype or is it something that is really going to be a thing in the future?
We want this trend to pass the test of time. Despite the optimism of some people in the industry, not all users are ready for Web3. It's true that users are already getting used to certain aspects, like using AI, but that's just a small fraction, and the research speaks for itself.
To give an example: this DappRadar report shows a growing global demand in the sector. Since August 2022, Web3-based games and metaverse projects have attracted $748 million. That's 135% more than in July.
If we focus on Brazil, RadarWeb3 claims that in October 2022, 124 of these projects were registered in the country. And some projects there are already being implemented directly in Web3, like Spacecaps and Ge?mu.
This is what we're looking at.
At the same time, a survey by Coda Labs shows that, despite the substantial funding behind Web3 gaming, a lot of users are still skeptical. They don't know how these games work and they don't have a blockchain wallet. Only 12% of players who aren't interested in crypto have tried Web3 games and only 15% of those who haven't want to.
These people need to be taught about Web3 gaming. But how long that will take, and whether Web3 will eventually turn from a fad into something here to stay, is yet to be determined. At Yandex Games, we're currently focused on development in Web2. But, of course, we closely monitor all the changes in the industry so that we can best serve our audience.
Another tendency that has been debated during last year was the metaverse and NFTs. How do Yandex Games see this trend? Does the company intend to branch out into this area?
It's the same here. We don't have any plans to implement NFTs, but we are following their ups and downs with interest. Right now, our feelings toward NFTs are ambivalent.
On the one hand, from 2021 to 2022, the number of NFT deals on OPENSEA decreased by almost 90%. As for the metaverse, the average number of deals made for NFTs representing virtual real estate fell by 98% in 2022 compared to its peak in 2021. 80% of the population still hasn't entered the metaverse and, according to some analysts, the fact that these technologies can be expensive may dissuade the public.
That being said, projects incorporating the metaverse and NFTs are still coming out. A few examples include:
- The upcoming NFT game Heroes of the Metaverse, raised $14 million in just one round of investment and $4.5 million in just 24 hours thanks to the pre-sale of collectibles.
- The social project EVE NFT is designed to reward women for investing in the cryptocurrency industry.
- Decentraland, where fashion week was recently held.
- And there are many more.
We're always open to new things, but there are still too many questions about NFTs. And since we're just making our way onto the international market, we have to be confident about what we're doing and what we can offer our partners. That's why we've decided to direct our energy toward other things for now But we'll see what the future has in store.
P.S. I originally published this interview at Benzinga
