Moscow Exchange targets game developers for IPOs — analyst doubts studios are ready

The Moscow Exchange is planning to establish an expert council to identify potential issuers among video game developers, aiming to boost the capitalization of the Russian stock market. Exchange representatives believe that game studios could raise financing through public offerings, following the example of dozens of Polish, Swedish, and American gaming companies.

However, Leonid Delitsyn, an analyst at investment firm Finam, doubts that Russian game development studios are ready for an IPO in the near future. According to Delitsyn, Russian President Vladimir Putin has set a target to increase the stock market's capitalization to 66% of GDP by 2030. Encouraging game studios to go public could be one of the tools to achieve this goal.

To meet the target, analysts estimate that the market needs to conduct IPOs worth approximately 1.3 trillion rubles annually. Historically, the average total volume of initial public offerings has been around 300 billion rubles per year — more than four times less than the required pace.

Delitsyn noted that the stock market needs to accelerate sharply, which is why the exchange is looking not only at the gaming industry but also at all sectors where potential issuers can be found. He emphasized that it is crucial for such an issuer's capitalization to grow significantly after listing, rather than decline immediately.

The analyst pointed out that while the Moscow Exchange is actively seeking new companies to go public, the gaming sector in Russia is still relatively young and may lack the financial transparency and track record required for a successful IPO. Many studios operate as private entities with limited public disclosure, which could deter institutional investors.

Despite these challenges, the exchange sees the global success of gaming companies on stock markets as a promising model. In countries like Poland and Sweden, game developers have successfully raised capital through IPOs, fueling their growth and international expansion. Whether Russian studios can replicate this success remains uncertain, but the Moscow Exchange is clearly betting on the sector's potential to contribute to the country's ambitious stock market capitalization targets.