Why Halo is going free-to-play on PC in Russia

Microsoft is expanding Halo’s global presence.

343 Industries, the developer that runs the Halo franchise for Microsoft, announced today that it’s launching a new entry in the franchise specifically for PC. Called Halo Online, this new take on the sci-fi shooter is a free-to-play game that will launch in an early testing phase this spring exclusively in Russia. Developer Saber Interactive and information-technology company InnovaSystems will build and operate the games as a service.

This new Halo will introduce one of the most popular console games to one of the largest PC gaming markets in the world. Russian gamers spend about $1.5 billion on online games like World of Tanks, and Microsoft thinks that it could capture some of that market with this new Halo.

“Halo Online is powered by a highly modified version of the Halo 3 engine and optimized for smooth performance on lower-end PCs,” reads a 343 blog. “[It] is a learning opportunity for us as we explore ways to welcome new fans to the Halo universe. We’re excited to release a Halo multiplayer-only PC experience tailored for Russian gamers.”

This move is reminiscent of publisher Activision’s plans with Call of Duty Online. That China-only game (it’s in open beta now) first debuted as a closed beta back in January 2013. It combines several different multiplayer maps and modes from the various console and PC releases into one free-to-play product. That has not stopped Activision from releasing a new, $60 blockbuster Call of Duty annually for console and PC players around the world.

But Russia and China are not great markets for $60 blockbuster games for consoles. For one, both have very active pirating scenes. This has trained many in these markets to expect to pay little or nothing at all for their digital entertainment. Second, PC free-to-play games have already taken over the zeitgeist in these regions.

In a list of the top-grossing PC games in the world, the Chinese megapopular shooter Crossfire is usually No. 1 or No. 2 on the list. It has brought in more than $1 billion each of the last two years. World of Tanks, most popular in Russia and throughout Eastern Europe, makes around $500 million.

And bringing Halo Online to Russia first is key. If it finds an audience in that region, it will likely filter out to other key Eastern European territories, like Ukraine, Poland, and Romania.

While Russia is by far the largest gaming superpower in the region, with around $1.5 billion in spending last year. Those other countries are also growing in importance. Polish gamers spent around $280 million, Romanians generated $122 million, and Ukranians bought about $118 million in game-related goods and items, according to research firm Newzoo.

Overall, spending in Eastern Europe grew 7 percent from 2013 to 2014. Again, Russia and its satellite nations make up about 80 percent of that by themselves, according to intelligence firm SuperData Research.

With that level of growth, and with few other companies the size of Microsoft going directly after Russia and Eastern Europe, Halo Online stands a pretty decent chance of finding success.