Nov 2, 2023 - Technology

Exclusive: Gaming firm Xsolla defends criticism from Ukraine over Russia work

Illustration of a TV flickering between no signal and a Russian flag

Illustration: Natalie Peeples/Axios

Video game payments company Xsolla is defending what it says is a reduced presence in Russia, in response to a Ukrainian government minister's call for gaming companies to cut ties with his firm.

Driving the news: Last Friday, Ukrainian minister of digital transformation, Mykhailo Fedorov, publicly called on several gaming companies — including Epic, Valve and Ubisoft — to cease working with Xsolla.

  • "Right now your customers' money flow and support the Russian military machine, as Xsolla continues work in [Russia]," Federov wrote on X, formerly Twitter.
  • Ukrainian officials have pushed for a so-called "digital blockade," appealing to hundreds of companies to cease involvement with Russia since that country's invasion of Ukraine.

What they're saying: "We do have an office in Russia," Xsolla interim CEO Chris Hewish tells Axios, saying an announcement to shut down an Xsolla holding company in Russia was never meant to imply closure of the office.

  • "Since the war began, we relocated about 200 people" out of the country, Hewish says. "It now represents a much smaller part of the company."
  • "We're an American company," he adds, emphasizing that the firm, which was founded in Russia, has been incorporated in the U.S. for years.

Between the lines: By still employing some people in Russia, Xsolla still pays taxes to the Russian government, which is part of the Ukrainian contention.

  • "It's taxes that are going to whatever the government of that country decides to use them for," Hewish says. "And it becomes a pretty slippery slope when you go down that rabbit hole."
  • The company will still facilitate transactions for gamers in Russia but leaves that up to its clients, Hewish says.
  • Representatives from Epic and Ubisoft declined to comment. A Valve rep did not reply by press time. Hewish says Xsolla has kept all of its partners informed of its remaining Russian business.

Flashback: In March 2022, Xsolla announced it donated $100,000 to the Red Cross for relief to civilians in Ukraine.

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