Video game enthusiast Aleksandr Agapitov is quietly building a $3 billion payments powerhouse

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Aleksandr Agapitov is little known in video game circles, let alone the business world. Still, his company is one of the leading players in the $135 billion video game payments industry.

Xsolla, founded by Agapitov in 2005, allows video game makers to sell in-game digital items — like “skins,” which change a character’s appearance, or virtual pets — in exchange for about 5 percent of sales. His clients include some of the hottest companies in the industry, including Epic Games, Valve, and Roblox, whose platform is hugely popular with kids. He owns 100 percent of the company, which brought in almost US$100 million (about Rs.7.6 billion) last year.

Two investment banks last year estimated Xsolla could target a valuation of up to US$3 billion (around Rs.22,890 billion) if it went public, according to documents seen by Bloomberg.

Still, he’s in no hurry. Agapitov, 38, who was born in Russia and moved to Los Angeles when he was 25, said he enjoys the freedom that comes with not having to respond to shareholders. His goal is to take the company back from the current 25 percent to annual revenue growth of 40 percent.

“I just love helping game developers make more money,” he said in an interview. “Wonderful innovations come from video games.”

According to data provider Newzoo, digital in-game revenue accounted for more than three-quarters of all revenue generated in the $180 billion global video game market last year.

“There’s a desire to make money beyond that initial purchase price,” particularly with free-to-play games, said Julianne Harty, gaming analyst at Newzoo.

Metaverse Project

In February, Agapitov started a Metaverse-based project called X.LA. It tries to do for those who build things in the metaverse what Xsolla does for video game developers: give them a financial incentive to create something.

The work requires hardwiring the codes and blockchain technology underlying the Metaverse, and Agaptiov brought a team of Xsolla contributors with him to do the job. If successful, a person who develops part of the metaverse could receive a “reward” in the form of virtual currency when other users visit that location.

“Like any other industry, it’s how you get funded, how you get paid, how you find new customers, and how you interact with your customers,” Agapitov said.

Agapitov grew up in the city of Perm, around 1,127 kilometers east of Moscow. He studied math and computer science at a local university, but dropped out to spend more time with his girlfriend and earn money from odd jobs. Around the same time, he combined his interest in early online payment systems with his love of video games. The result was Xsolla, which he relocated to California in 2009 after attracting interest from a few large clients.

Xsolla offers players over 700 ways to make in-game purchases, from using Visa and PayPal to regional options like China’s WeChat Pay and Paytm.

“What I’m trying to do is like Shopify for video games,” he said.

© 2022 Bloomberg LP

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