Interview: Mikhail Tsyrulnikov, Founder and CEO of Gameray, a digital games distribution platform

An interview with Mikhail Tsyrulnikov, Founder and CEO of Gameray, a top-3 Eastern European digital games distribution platform

Welcome to an insightful interview with Mikhail Tsyrulnikov, the visionary founder and CEO of Gameray, one of Eastern Europe’s premier digital games distribution platforms.

With a passion for gaming and innovation, Mikhail has spearheaded Gameray’s ascent to the top tier of the industry. Join us as we delve into his journey, challenges, and the future of gaming distribution.

As a seasoned gametech entrepreneur, what inspired you to establish Gameray, and what sets it apart from other digital games distribution platforms?

Mikhail Tsyrulnikov: I worked as a project manager in one of the largest online stores in the CIS, and I noticed how much physical logistics limited sales at that time. The idea of doing something in the field of e-commerce strongly attracted me, as back then, in 2013, it was a promising, fast-growing sector.

I tried to find an area that did not require me to engage in physical delivery, and the then-burgeoning field of digital games distribution turned out to be very relevant. Moreover, I loved video games, so from the very beginning, I had a good understanding of the market.

An ideal combination was emerging: e-commerce, in which I was professionally well-versed, and video games, which I sincerely loved. Moreover, both areas were fast-growing and promising.

With over 16 years of expertise in e-commerce and gaming, what key lessons have you learned that have shaped your approach to leading Gameray?

Mikhail Tsyrulnikov: Hypothesis Testing in Business: In business, it’s often impossible to predict which decision will be successful or which product will become a bestseller. So, over the years, I’ve come to the conclusion that our main focus should be on testing various hypotheses.

I even set KPIs for my employees based on the number of hypotheses they’ve managed to test during a certain period. This can range from finding new promotion channels and collaborating with influencers on social media and YouTube, to partnering with a small publisher that has only 2 games in its catalog.

In the gaming industry, products that initially seem unpromising can often become successful. For example, the card game Balatro, developed by a single person and released in February 2024, became a bestseller and reached 1 million in sales.

Continuous Learning

This may sound cliché, but knowledge becomes outdated quite quickly. Both the e-commerce and gaming industries are changing rapidly, and solutions that were effective 1-2 years ago may not work today.

I strive to allocate time in my calendar for learning and reading professional media on a weekly basis. I also attend offline gaming conferences annually. In 2021, I completed the MBA program at Cass Business School (now Bayes).

Delegation and Decision-Making Freedom for Managers

The CEO’s attention is one of the company’s most important resources, so it’s crucial that it’s focused on truly important matters: strategy, hypothesis testing, and team management. To make this possible, it’s important not to get sucked in by day-to-day operations, which are better off delegated to managers. It took me quite a while to realize this.

Additionally, an important factor in proper delegation is giving managers the freedom to make decisions without micromanaging. As the CEO, this can be hard to do. However, we need to understand that while yes, this approach can sometimes lead to mistakes, in the long term, if the right managers are chosen, the effectiveness of their decisions will be high.

How do you navigate the dynamic landscape of the gaming industry to anticipate and capitalize on emerging trends and opportunities?

Mikhail Tsyrulnikov: Communication with publishers and developers: Being primarily a distribution platform, we strive to communicate frequently with the publishers and developers whose products we sell. This allows us to keep our finger on the pulse and get information directly from those who are driving the gaming industry forward, and to be aware of all the latest trends.

Conferences

An excellent way to navigate the dynamic landscape of the gaming industry is attending annual conferences. The two largest ones are Gamescom in Cologne and GDC in San Francisco. Myself and other key employees of the company do our best not to miss them.

Conferences allow you to meet with a large number of publishers’ representatives, talk with competitors and other gametech entrepreneurs, see what the gaming community is living on, and identify the latest trends and new opportunities.

Can you share any notable challenges you’ve faced while scaling Gameray into a top-3 Eastern European digital games distribution platform, and how you overcame them?

Mikhail Tsyrulnikov: Piracy: The number one challenge was the piracy of digital content, which is very popular in Eastern Europe. Players often download games for free from torrents instead of paying for a licensed copy of the game. Many people did not understand why they should pay money for a game if they could play it for free.

When we made posts on social media or collaborations on YouTube, there were always many comments that these products could be obtained for free through torrents. At Gameray, we tried to make the purchase process as simple and convenient as possible, in “2 clicks,” making this our advantage over the complex process of downloading a game from torrents.

Publishers and developers also helped us by adding online and social features to games that only worked in licensed versions. As a result, after 10 years of work, the level of piracy in Eastern Europe has significantly decreased.

Fraud

An unexpected challenge for us was also credit card fraud. It turned out that digital keys were well suited for fraudulent schemes to cash out money from stolen cards. Fraudsters used data from stolen bank cards to buy keys from us and then resell them on gray marketplaces.

We faced a cybersecurity challenge that we were not prepared for, as e-commerce, which sells physical goods, did not have such problems. We had to look for specialists in financial cybersecurity and jointly write systems to track such transactions. Over time, however, we were able to figure out this issue and build a secure payment gateway.

Direct contracts with publishers

Another difficult issue, initially, was negotiating direct contracts with publishers. Publishers have high demand for their products in stores, and want to see good sales volumes immediately. They are not interested in connecting with many small stores.

As a result, it is difficult to become a big store without direct contracts, because the store loses the price competition to those who have direct contracts and, thus, better price conditions. Fortunately, the traditional gaming companies in Eastern Europe, which, although previously engaged in direct contracts through the release and distribution of disks, could not take advantage of their advantage, as they did not have e-commerce skills.

We were able to successfully compete with them, despite having significantly worse price conditions, because of our user-friendly platform with customer-oriented support, and because we knew which marketing channels to use and how to leverage them wisely. After 3 years of this, our platform was selling enough for us to negotiate and close direct contracts.

What strategies have you implemented to foster strong partnerships with game developers and publishers, and how do these relationships contribute to Gameray’s success?

Mikhail Tsyrulnikov: As I mentioned earlier, direct relationships with publishers are an absolutely critical success factor in our industry. Gamers are often interested in buying specific games, and if they are not available on our platform, they will buy them elsewhere, such as on Steam.

Therefore, maintaining current relationships with publishers and searching for new ones has always been a key focus for our company.

We understand that, on the one hand, publishers are interested in the development of platforms like ours, as they are concerned about the monopoly of the market leader, Steam. On the other hand, there is a huge problem with the gray market: the resale of keys at promotional prices outside of the promotion period on marketplaces, as well as the leakage of keys to regions for which they are not intended.

Therefore, from the beginning, we have been working to solve the problems that concern publishers, creating secure key distribution systems and providing publishers with the most transparent real-time statistics, which show where and when each key was sold.

Our strategy has helped us to gain several exclusive publishers. For example, the rights to distribute Paradox’s games are held by only 2 companies in the CIS region, including Gameray.

In what ways does Gameray prioritize user experience and engagement to enhance customer satisfaction and retention?

Mikhail Tsyrulnikov: “Human-centered approach”: We differentiate ourselves from global platforms, where users have to wait for a response from support for more than 24 hours, by giving a human touch to customer service. In our online chat, operators are always available, and they help answer buyers’ questions and solve problems in real-time.

Special promotions from publishers and bonus system

One of the most important techniques for retaining buyers is offering exclusive promotions from publishers. We coordinate promo-campaigns (with discounts up to 90%) during periods when these products are sold on Steam at full price. These campaigns encourage users to visit our platform more often, and also give us an informational reason to write to users about this through various marketing channels: email and social media.

We also created a loyalty system that is uncharacteristic for gaming platforms, crediting users with cashback for purchases. They can then use this to pay for future games, which makes the prices in Gameray more attractive for regular users compared to competitors.

Website UX

We pay a lot of attention to our website’s UX, to make the game purchasing process as simple as possible. We conduct weekly analytics of user behavior and conduct A/B tests with the aim of finding solutions that will increase conversion.

With the increasing popularity of digital games distribution platforms, how does Gameray differentiate itself to attract and retain both gamers and developers?

Mikhail Tsyrulnikov: Gamers:“Human-centered approach”: In contrast to global platforms, where users have to wait for a response from support for more than 24 hours, we at Gameray have made an effort to create a service with a human touch. Operators are always available in the online chat to help answer buyers’ questions and solve problems in real time.

Prices and Exclusive Promos

One of the most important techniques for retaining buyers is offering exclusive promos from publishers. We coordinate promo campaigns (with discounts up to 90%) during periods when these products are sold on Steam at full price.

The campaigns encourage users to visit our platform more often and also give us an informational reason to write to users about them through various marketing channels: email and social media.

Additionally, we strive to offer the best prices for new releases, provide discounts through our loyalty program, and offer promo codes that are not available on global platforms such as Steam.

Local Payment Methods

We aim to provide a wide range of payment solutions in the CIS countries, which favorably distinguishes Gameray from global platforms such as Steam, which pay little attention to payment methods on local markets.

Publishers & Developers:

Knowledge of the Local Market

We have a good understanding of the markets in which we operate, both in terms of specific payment methods and marketing channels. In the CIS markets, there are quite specific instruments such as the Yandex advertising system and the VK social network, which are not present in other regions. We help publishers and developers distribute their games using these channels.

Key Security

We help publishers fight against key leaks to the gray market and to regions for which they are not intended. The technical solutions we use allow publishers to see the sale of each key in real time and the IP address of the buyer to whom it was sold.

How do you envision the future of the gaming industry, and what role do you see Gameray playing in shaping that future?

Mikhail Tsyrulnikov: The gaming industry is developing quite rapidly. Large projects require more and more resources and take longer to develop. VR and AR technologies are advancing. Mobile platforms are becoming increasingly important.

However, no matter what technologies and platforms developers use, they will always be interested in a variety of distribution platforms, as a situation of oligopoly where a few global platforms control distribution can be dangerous for them. Therefore, we are confident that the role of third-party distribution will only grow.

We also see a trend towards general anti-globalization, which we believe will lead to a greater significance of distribution platforms operating in specific markets.

Can you discuss any upcoming initiatives or innovations that Gameray is pursuing to stay at the forefront of the gaming market?

Mikhail Tsyrulnikov: Mobile Gaming: New laws adopted in the European Union (Digital Services Act and Digital Markets Act) require Apple and Google to allow the installation of apps from third-party stores.

We believe that this is a very correct step, and that other regions will soon follow suit The implementation of this law will enable Gameray to, in the future, enter the fast-growing market of mobile games  and sell games for iOS and Android.

Keyless Distribution

Currently, we are working together with publishers on the implementation of keyless distribution. This solution allows us to move away from the sale of license keys, which can be leaked or resold to other regions.

Keyless distribution allows the purchased game to be added to the user’s library through API integration at the time of purchase. This solution guarantees that the key will not be resold in the future, which should completely eliminate the gray market and increase demand for legal distribution platforms such as Gameray.

Lastly, what advice would you offer to aspiring entrepreneurs looking to enter the gametech industry and establish successful ventures like Gameray?

Mikhail Tsyrulnikov: Choosing Large Markets for Business: Choosing a niche for a business is an indicator of its fate. The gaming market is the largest entertainment market. Working on a large market (even if the company occupies only a small share of the total volume) will allow startups to feel confident and maintain the potential for growth and testing related niches.

However, if a company initially chooses a tiny market, it will not be able to achieve significant indicators, even if it becomes the best in this field. Unfortunately, I often see startups choosing tiny niches in an attempt to become a leader there.

Attending Industry Conferences

For my company, attending gaming conferences has opened the doors to securing our leadership in the market. Communication with developers and publishers who created the products we were selling helped us understand their true needs and create a reliable technical platform.

This, in turn, allowed us to obtain direct contracts and agreements with publishers and obtain the rights to distribute their games. I have been attending annual gaming conferences in Cologne and San Francisco for more than 8 years now and consider it the best investment of my time.

Delegating as Much as Possible

The CEO of a project should strive to devote as much time as possible to strategic tasks and work with the team. To have time for this, it is important to delegate the maximum number of operational tasks to managers.

This sounds quite simple, but, unfortunately, in practice, I often meet CEOs who are bogged down in operational work and do not have the strength and time to think about the strategy and development of the company.

Mikhail Tsyrulnikov’s journey with Gameray exemplifies entrepreneurial spirit and industry leadership. His dedication to innovation and customer satisfaction has cemented Gameray’s position as a powerhouse in Eastern European gaming distribution.

With his strategic vision and relentless drive, the future holds exciting prospects for both Gameray and the wider gaming community.

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