Billionaire Gaming Brothers Are Now Tencent’s Biggest Rival

Billionaire Gaming Brothers Emerge as Tencent’s Biggest Rival

The coronavirus pandemic has created a new gaming giant, boosting the fortune of its two founding brothers.

Thanks to a rush of new gamers, Playrix has become the world’s largest mobile-game developer after Tencent Holdings Ltd., according to researcher AppAnnie. Its founders and sole owners, 38-year-old Igor and Dmitry Bukhman, 35, have more than doubled their wealth and are now worth $3.9 billion each, according to the Bloomberg Billionaires Index.

Billionaire Gaming Brothers Are Now Tencent’s Biggest Rival

That didn’t happen by accident: At the height of the health crisis, as companies cut down on advertising, the mobile-game developer took advantage of lower ad prices to increase its marketing. Monthly users surged 50% to 180 million at the peak of the outbreak, and sales jumped about 60% to $1.75 billion in the first eight months of the year, the company said. The number of gamers has since stabilized at 150 million monthly.

“Successful games have become long-term services similar to Netflix, which manages to retain users by constantly adding new content,” Igor said in a Skype interview from London, where the brothers live. “We are constantly adding new stories, different game mechanics and levels to our games, and people are playing them for years.”

Billionaire Gaming Brothers Are Now Tencent’s Biggest Rival

Julia de Macfarlane-Smith is among those who got hooked during the pandemic. After clicking on an ad in February, she soon started spending as much as six hours a day playing Gardenscapes and about 50 pounds ($64) in a month to get through levels faster. The match-3 puzzle game is one of Playrix’s most popular.

“It made life indoors not so boring,” said the 42-year-old stay-at-home mom from Gloucestershire, U.K. “I don’t know how many hours a day I would be playing if the pandemic had never happened, probably much fewer.”

Listed gaming companies from China’s Tencent to Zynga Inc. in the U.S., CD Projekt SA in Poland and Netmarble Corp. in South Korea have surged this year with people spending more time and money playing. But Playrix’s rise to No. 2 from No. 7 last year is remarkable for two brothers native of Vologda, a city almost 300 miles (483 kilometers) north of Moscow. In an interview last year, they said they wanted their company to be in the same league as giants such as Activision Blizzard Inc. and NetEase Inc.

The brothers started their road to riches in 2001, when Igor learned from a university professor that he could sell software online. He decided to try it with Dmitry, who was still in high school at the time. In 2004, when the business reached $10,000 in monthly revenue, they registered a legal entity and rented space for an office in the basement of a book warehouse in Vologda.

While Tencent remains the world’s gaming leader and its chairman, Pony Ma, is worth about $52 billion, Playrix now employs more than 2,500 people. It has personnel at its Ireland headquarters and developers in Russia and Eastern Europe.

Top-tier investment banks have encouraged Playrix to merge with a bigger company or list on a stock exchange, but Dmitry said there is no deal on the table. The brothers aren’t ruling out those options in the future, though, he added.

In the past two years, the firm has bought a dozen developers and it’s now counting on them to help it produce new hits. That said, existing games will also remain important.

”Investors have perceived games as a risky business, which needs to generate one hit after another -- but this is not true anymore,” Dmitry said. “If you made a successful game and operate it properly, you can make money for years.”

©2020 Bloomberg L.P.