25 Years After Tetris, the Russians Are Back

Even if you're not a gamer, you probably know the original Russian infiltrator: Tetris. The simple yet addictive puzzle was created by 29-year-old Russian computer programmer Alexey Pajitnov during his off hours in Cold War Moscow back in 1984. The game migrated to North American PCs, floppy by floppy, three years later. In 1989, Nintendo introduced the Game Boy to the world, offering Tetris as the exclusive pack-in game cartridge. Now celebrating its 25th anniversary, Tetris has sold more than 125 million copies across 30 platforms. But because Pajitnov worked for the state at the time, the game was technically owned by the government—he never received a dime or even a bonus from his employer.

It wasn't until 1996, when the rights to the Tetris licenses were renewed, that the game's creator, who by then had emigrated to Washington state, began receiving royalties for his creation. Pajitnov remains active in introducing new editions of the game to a motion-sensor-loving generation of gamers. "We want to make Tetris more accessible to kids, boomers, and busy moms, to everyone who enjoys a fun, stimulating, and even meditative escape from the daily grind," says Pajitnov, who play-tests every new iteration of the game for his company, Blue Planet Software.

The lesson behind Pajitnov's story isn't lost on Russian game developers looking to stake their claim in the $22 billion American videogame market. There are roughly 165 established game developers in the country working on casual, online, mobile, PC, and console games today. Why has the country seen such a boom?

Low development costs help. "Russia offers reduced production costs through affordable cost of living, which is multiplied by a tremendous talent pool thanks to the world-leading technical and art schools and universities," says Andrew Belkin of Moscow-based TrashMasters, creator of Postal 3, a controversial and top-selling first-person shooter. A state crackdown on pirated games has also helped stabilize the industry. Just seven years ago, roughly 70 percent of games sold in retail stores were illegal, compared with approximately 40 percent today.

Leading the Russian charge westward is 1C Company, which was founded in 1991 as a business software publisher and has earned a reputation as Russia's Microsoft. By 1996, the company had entered the videogame business and introduced PC franchises like Theater of War, Kings Bounty, Death to Spies, and Soldiers: Heroes of World War II.

Today, 1C is the largest game publisher and developer in Russia as well as in Eastern and Central Europe, with more than 700 employees, including a team of 250 internal game developers. It has rolled up smaller competitors, has 1,000 company-owned retail stores, and has gained Russian distribution rights to popular titles like Grand Theft Auto IV. Last year, 1C published 22 new games and now ships one metric ton of product every hour of every day. Still, the company is a relatively small player when compared with game giants like Electronic Arts, which last year sold 75 million units of games, including 36 million in the U.S., according to the NPD Group. In the United States, which remains the most lucrative gaming market in the world, 1C is on the radar of only the most diehard PC gamers. To crack the market, the company is teaming up with North American publishers like Aspyr and 505 Games, says Anatoly Subbotin, 1C's head of marketing.

Unlike Pajitnov, who was elbowed out of the picture by his own government, today's developers are receiving much more gracious treatment. On June 25, the Russian Consulate in San Francisco hosted a reception showcasing 1C videogames from the motherland. And American game developers are taking notice. Ted Pollak, senior game-industry analyst at Jon Peddie Research, says 1C can succeed stateside, especially since the company has such a large library of games designed for the PC. With many U.S.-based companies all but abandoning the PC in favor of console games, 1C could easily fill the void even as it builds out its list of Xbox and PS3 titles. "If 1C keeps their nose to the grindstone on the PC platform, markets the games effectively, and continues to offer digital distribution options, there could be great rewards," says Pollak.

Pajitnov is glad that his countrymen are following in his footsteps. "The Russian gaming business has followed the development of modern Russia. Just like the country is part of a modern world, so are the game developers," he says. "But even though they are interacting with the rest of the worldwide gaming community, they are bringing a certain Russian flavor to everything they do."