Evgenia Sedova: The games industry is now making more money than the music and movie industries combined

Evgenia Sedova, the CFO and Founder of Mundfish, the company behind Atomic Heart among other hit titles, shares why she is confident establishing a studio in Cyprus was the right choice.

Speaking to GOLD magazine as part of a cover story featuring 18 of the top gaming developers based in Cyprus, Sedova notes that the games industry is now making more money than the music and movie industries combined while also suggesting that gaming is a great form of storytelling and can learn from the movie and music industries.

How did the focus on console games, particularly in the role-playing (RPG) genre, come about?

Our original idea was to create a virtual reality (VR) game but, as the project developed, we realised it would be a shame to limit ourselves to the niche category of VR games. We recognised the huge potential of our unique and immersive world and expanded not just to consoles but also PC. As for the RPG genre elements, we are all gamers, we love great action games with exploration, satisfying melee combat and a great shooter experience. We always wanted to create a game that would impress gamers like ourselves and we never compromised on quality. We made sure that our project stood out in terms of visual style and audio, as well as storytelling. We wanted to build a true AAA project, nothing less.

Walk us through your flagship title, Atomic Heart, and the reasons that have contributed to its success.

We have incredible art direction: Artem Galeev, who was one of the first people to join Mundfish after Rob Bagratuni and myself, has outstanding artistic talent. He has created a unique world that immediately captured global attention. At a time of sequels, prequels, reboots, recuts and reworks, a truly original IP feels like a breath of fresh air for the public. The setting and characters design appealed to the audience and created huge hype even before the game was launched. Our development team is not just professional – those guys are fearless and crazy when it comes to new technology! So many times, they showed how challenges inspired them to invent new solutions and come up with ideas so different from the norm. Their dedication helped us release one of the best-optimised games of 2023 and it gained strong media scores and player reviews. As a result, we had 5 million players in just the first 3 weeks after launch. We are in the top 10 most searched games of 2023 and have won multiple awards and nominations across the globe. All of this is crazy for a studio’s first project. But it is also just the beginning for Mundfish.

HBO's success with The Last of Us and collaborations between acclaimed filmmakers and game creators like Jordan Peele and Hideo Kojima suggest that gaming is on the way to becoming the dominant entertainment medium. What prospects do these developments open for game developers?

The games industry is now making more money than the music and movie industries combined. Of course, both are eager to attract gamers. The successes of The Last of Us, Halo, and Cyberpunk: Edgerunners prove that the strategy is working. And it's amazing – gaming is a great form of storytelling and it can learn so much from the movie and music industries. But the same applies in reverse: look at how studios use Unreal Engine to produce movies and how musicians perform in games. Our own background in video production and music forced us to set the bar very high in terms of quality but it also helped us tremendously while we worked on Atomic Heart. So much creativity and innovation can be unleashed as those industries continue to merge. We are very excited about this dynamic and see Mundfish as being at the forefront of this movement.

Given the growing popularity of e-sports and its evolution into a major sporting event, including an annual e-sports World Cup to be held in Saudi Arabia, what opportunities does this remarkable surge present for game developers?

Just as with movies and music, there is huge potential to attract gamers across the globe and also to drive additional revenue to offline businesses like tourism and hospitality. Competitive multiplayer games are already fuelling this so, of course, there will be more and more competition in the multiplayer game market. But hey, the bar is very high already; imagine how challenging it is to release a new online multiplayer project right now.

Your studio, among others developing console and PC games, has chosen to establish itself in Cyprus. What specific attributes make the island an appealing destination for you?

Our company is multinational, with employees from different countries and backgrounds. As a conveniently located international business hub, Cyprus offers a business-friendly environment with a well-established legal and regulatory framework for employees from all over the world. Furthermore, Cyprus also offers favourable tax conditions for businesses, especially for game development businesses. The corporate tax rate is competitive and there are tax incentives and exemptions available. When we were starting our studio, we always envisioned it becoming a successful international business and it was no surprise that we chose Cyprus to be our headquarters. Since we first started operations in Cyprus, the island has continued to grow its tech and startup communities, fostering collaboration and networking opportunities for game developers, which is great.

The recent decision by the House of Representatives to reduce the naturalisation period for C-level executives to four years reflects efforts to establish Cyprus as an IT and games hub. What other changes, policy or otherwise, do you believe would further support this goal?

We think that Cyprus has a lot of opportunities and we are happy to participate in that discussion. Of course, general investment in the necessary infrastructure to support the games industry, like high-speed Internet connectivity, technology parks, and co-working spaces equipped with state-of-the-art facilities for game development, is essential. We also believe that huge potential lies in education and training initiatives: in the current never-ending learning environment (especially in the IT industry), it is very important to offer game developers the opportunity to grow their professional knowledge. Collaboration with educational institutions to develop specialised programmes and courses in game development will help create a pool of skilled local talent, making Cyprus an appealing destination for game developers seeking a well-educated workforce. Additionally, the Government can offer grants or subsidies to companies that invest in training programmes for their employees, hosting more IT conferences and hackathons. As a studio, we had a great experience and gathered a lot of valuable feedback when collaborating with local students and gaming clubs when we playtested Atomic Heart, and of course, we will continue to do so moving forward.

Overall, however, we see that Cyprus is becoming more and more welcoming for the gaming community, how this community is growing and developing, and we are confident that we made the right decision to establish our Studio on the island.

(This interview first appeared in the January edition of GOLD magazine. Click here to view it.)