Thundergamez Case Analysis

Suppose that a fictional gaming company, called ThunderGamez, wants to expand into the Russian market upon the discovery that their most recently released mobile game was very popular among the Russian audience. The question ThunderGamze has to consider is whether internationalizing to the Russian audience by building and developing a team overseas is a worthwhile investment, and if they should eventually take a step even further and hire Russian programmers and game designers to create games that appeal even more to the Russian market. This paper aims to analyze the different aspects ThunderGamez would need to consider in order to decide if developing a local team in Russia is a risk worth undertaking given the current economic conditions
The majority of their revenue comes from their free-to-play games, where users can choose to purchase powerups and boosters in the game in order to receive an edge over other players. Furthermore, users can choose to watch a sixty second advertisement in order to receive a smaller boost. Their most popular free-to-play game, Thunder Clanz, has over a million downloads, while their most popular paid-app, Thunder Warz, has only fifty thousand purchases at a price of $0.99. The company has recently reorganized their development team to focus on support for Thunder Clanz, as well as development of similar multiplayer games following the free-to-play
In addition to the hordes of international mobile game development corporations that are looking to expand into Russia, especially Chinese mobile gaming companies, “local publishers dominate the Russian market making it difficult for new international entrants.” Russian companies such as Zeptolab, DynamicPixels, and G5 Entertainment have developed mobile games that have reached well over millions of downloads. For example, Zeptolab’s Cut the Rope, at a price of $0.99, “was downloaded 1 million times in its first 10 days and a total of more than 60 million times to date from all platforms.” In addition, data from App Annie shows that as of September 19, 2016, games such as Clash Royal from the Finnish company SuperCell and Clash of Kings from the Chinese company ELEX Wireless, are among the top grossing apps in the Russian market. In fact, the top grossing game in Russia during August of 2013 was earning about $14,000 a day, and the top 10 grossing games about a combined $40,000 a day. It’s no wonder then, that companies are looking to tap into the Russian mobile game market. Since ThunderGamez produces games that are similar in nature to Clash of Kings and Clash Royal, ThunderGamez would be in direct competition with these mobile game developing giants. However, a competitive market is a sign that a market does exist, and considering ThunderGamez’s games have been gaining