In the early sunny Dubai morning "Durov's Code" managed to talk with the founders of the Mundfish development studio — Robert Bagratuni and Evgenia Sedova.
In slightly more than 5 years of development their company has turned from a small indie studio into a large gaming company with several offices around the world, occupying more than a thousand square meters, and more than 100 employees. On the eve of the announcement of their first title, the Atomic Heart game, they told us about their experience in creating games, attracting investments and living in Abu Dhabi.
— Atomic Heart is your first major project, which took you nearly six years to finish. How do you feel now that the project is so close to release? Is there an understanding that you have managed to do everything you aspired to and even more?
It's a strange feeling. On the one hand, we are delighted, because we have been going to this for a very long time. Finally, the release is taking place literally in a few days, on the other hand, there is some concern as well. But it's still a positive feeling. It is very difficult to realize that the project our team has been doing for so long is about to be available to all players of the planet Earth.
As for whether or not everything has been done, this process can be stopped only by an effort of will. At the moment, we are extremely satisfied with the result and are confident that our creation will bring a lot of joy and completely new impressions to people.
And these are not just words — we have spent more than 10 playtests in completely different parts of the world in the last 1.5 months alone, and have made serious improvements to the game, which previously, due to the specifics of computer game development, could not have been done. And, of course, it is clear that we have accumulated a lot of impressive ideas over the past five years, many of which simply had nowhere to cram into the game, because if we continue to expand it all the time, it would simply never come out.
— Currently there is an anticipation that Atomic Heart is one of the main projects of 2023, which everyone is very much waiting for. Do inflated user expectations frighten you?
5 years of development are just as good as they sound. We feel how everything inside is compressed and mixed up. I say it as it is, this is a very exciting and important moment, in one day, on all platforms — this is a real "challenge". By the way, we have also prepared well and have localized the game into 9 audio languages and 12 available subtitles. These things are usually done only by Ubisoft, Bethesda and Sony. We want the whole world to be able to have fun immediately without prolongation.
All this cross-platform release (the game is released everywhere at once: PS5, PS4, old and new XBOX and PC) is technically very difficult to do simultaneously in one day. We are not afraid of difficulties.
— As far as I know, Atomic Heart will be available in Xbox Game Pass from the very first day. Tell us about your feelings when you found out that the project attracted the attention of such a large platform as Microsoft?
Let's be honest, the whole Microsoft part was a surprise from start to finish. Of course, when they contacted us, we were very inspired, and even more so we did not expect that it would be possible to close the deal with them so quickly.
It always seemed to me before that corporations were slow, it was long and hard with them, but our experience ultimately proves just the opposite now. We started discussing the possibility of a Game Pass with them in 2020, made a couple of calls, but in 2021, in May, everything accelerated greatly and we came to very interesting conditions that our board of directors approved literally from the first time.
Game Pass from the first day is a huge coverage on the release. We liked the scale of this cooperation. For a new franchise, this is a very correct strategy — to reach as many users as possible and as quickly as possible.
We have a fairly large and, most importantly, incredibly high-quality game, and if millions, or, I hope, tens of millions, play it in the first months, then the further development of the Atomic Heart franchise will be much faster. This is beneficial to us, and Microsoft also gets a cool project right from the start.
— Tencent was the third investor in the project. Tell us, how did you attract the first investors? What were your expectations when you first started working on the project? It doesn't often happen that the very first project comes out as a huge success, and it seems that yours does.
Yes, that's right, Tencent was the third who made an equity deal (purchase of a stake in the company in order to further increase the capitalization of the project) with us in 2020. Since then, we have not had equity transactions. As for the early stage, here's how it was.
Nvidia contacted us in 2018 and offered to make an RTX Demo together to show how the new fashionable rays work, how soft shadows and reflections affect the game. They needed cool, beautiful content. We had it, and of course we agreed.
The implementation took about three weeks. We then tried hard to make it to the exhibition,although the technology was still quite crude. As a result, we put together a pretty cool demo. Mundfish and Nvidia performed at an event in Cologne, where we were presented as the authors of the first RTX demo, and this gave a very strong boost to our credibility as developers in the eyes of future investors. Thanks to Nvidia for this. Their support for young projects is just what should be done.
We had no expectations from this cooperation — we had a lot of ambitions and lacked free time. We dreamed of getting to the major league and worked 24/7 to realize this dream. Apparently, this approach attracted all our partners.
Our cooperation with Nvidia created the basis for trust from investors, as an indicator that the team can deliver results in an extremely short time. At the same time, we were already negotiating with Gaijin, and we closed the deal in 2019. Well, as I said, about a year later we closed the deal with Tencent, and since then we have not had any new investors.
— Tencent is the largest gaming corporation, they own shares literally everywhere, from Epic Games to Ubisoft. Why did they become interested in a small startup?
I think they liked us. This risk, all together, the rush, the fire in the eyes, all this desire to jump in immediately to make an AAA-game, eventually hooked our investors. Tencent believes that such an approach as ours has every chance of becoming unicorns.
As far as I know, 80% of Tencent's investments are successful. Usually Funds have quite the opposite, most of the projects fail. It turns out that Tencent's investments are already a kind of benchmark in our favor. Of course, if such a partner approached us with an offer to invest, we could not refuse.
— How did you start the company? As far as I know, you started working on the project with a team of four people, right?
In 2017 we decided to create a gaming company and to do something significant in the field of entertainment. For that, we are thankful to the VR-glasses that have been inspiring us on this whole long journey. The experience with VR makes you believe that the future is in front of you. Still a little uncouth, perhaps, but the perspective of the next few years is already clear.
We decided to gather our small creative group, discussed the desire to work in this direction, and then immediately laid the foundation of the Mundfish corporate culture — to make games that we like, and make them in a way that the players like them as well.
That is, we do not copy — we create a new one. This was the main condition from the start.
It all started with a small experiment in the field of VR, then something unexpected happened. After about six months of active work on the VR game, it became obvious that the idea we wanted to implement greatly exceeds the capabilities of this technology. We realized that if we make a game only in VR, then for such a powerful project it would not be quite the right decision — rather, it would be completely wrong to border such a wide product with such a narrow market.
In general, it all sounded logical to:
The only thing is that it was extremely risky, and a little crazy for a team of our size. However, if you look back, the risk we took then was the catalyst of the whole project.
If you look at the industry now, you can see that most gaming PCs and console companies have been gaining experience for a long time before making their own project.
The idea to make an AAA project right away was complete and absolute madness. We didn't have any experience or a team of this level at the beginning of the journey, and it looked like a vicious circle.
It was necessary to break it in order for something to start happening. In May 2018, Atomik's trailer became viral. It immediately became clear that this is our chance, we needed to literally grab it here and now. We got to know the whole market in six months, probably, and started looking for partners who would suit us the most, in terms of comfort and mentality.
We had a lot of negotiations and eventually formed a circle of those with whom we eventually closed deals: Anton Yudintsev, founder of Gaijin, Gem Capital Fund and Tencent Corporation.
— How many employees do you have now? How much has the team grown? What are your plans for the future?
Now we have more than 100 people already, who are working all over the world. The team is quite large and a lot of talented people are collaborating on our project. At the same time, we feel that we can do much more.
We already have a distributed geography now: recently a new office in Abu Dhabi was opened, thanks to the assistance of AD Gaming. We received very good conditions, for which we thank them very much.
We immediately rented a huge office of about 1000 sq. meters. Mundfish wants to double the staff over the next year, to reach about 300 people, but we will not do this just for the sake of doing, we are extremely scrupulous about hiring.
Corporate culture is important to us. I am still interviewing personally every employee to whom we send an offer at the final stage of recruiting. This is part of the hiring tradition. I want people who come to work with us to feel that we are not a corporation, but a large but at the same time cozy studio where their talent will be appreciated.
We set ourselves a very ambitious task — to do 24-hour production, so that the development does not stop for a minute. Our Western colleagues in the industry have phenomenal experience, many large companies that are now market leaders started back in the late 90s or early 2000s, and this is more than 20 years of experience we lack. In order to get at least to the same level with them, we need to constantly run forward and develop.
We do not want to be interrupted for sleep simply because the human body initially requires it. Obviously, the only option that will not harm our employees’ health is a global distributed team.
Some went to bed, others picked up from the latest checkpoint, so the process is taking no pauses.
Our main goal for this year is to expand internationally and open offices in Amsterdam, Belgrade and Singapore. Each of the mentioned cities has some specific feature in terms of hiring and production, for example, it is easier to hire European employees in Amsterdam, and in Belgrade it is cheaper and more convenient to organize the filming process and build a hangar where you can properly deploy on the next project in terms of filming. As for Singapore, it is also an international hub like Abu Dhabi is. There is a 6 hours time difference with Europe, so it is very convenient to organize the very thing what I talked about earlier.
— How do you plan to develop the company after the release of the game? Do you have plans for other projects? Multiplayer projects, maybe?
We now have quite a lot of offers from various large companies. We were literally bombarded with offers, both on commercial transactions and on equity. At the moment we have two projects in the active stage of production. Our plan is to diversify products in different genres.
We are very interested in cybersports. There is great potential here, especially in the Arab Emirates.
There is a great interest in the sector in this region and there are weighty prerequisites for this. The number of people playing games in MENA is almost equal to Europe, and is mostly including a very young population. The ARPU (the average income that each active user brings) is fairly high, just as is the percentage of those paying (in Saudi Arabia). There is a lot of support for gaming companies in the UAE, and a $38 billion fund focused on games has been launched in Saudi Arabia. We want to become the largest global gaming company based in this region.
We believe that we can achieve a huge synergy here, especially considering the pace and scale with which IT is starting to develop in the UAE.
We have serious ambitions to grow into a billion-dollar company and diversify in terms of projects of genres and platforms. We now want to smoothly move from the development of one project to several of them and to deepen our expertise, but I cannot publicly discuss these plans.
— Last, but not least, do you like it here in Abu Dhabi?
Yes, I like this city, and I love the direction of the development of an IT cluster in Abu Dhabi and in the Emirates as a whole. I would like to get to know everyone who could potentially work with us.