Playkey, a resident startup of the Skolkovo Foundation’s IT cluster, has attracted $1.5 million in investment from Darz, a major German IT service provider and data centre owner, in exchange for a share of the company, Kommersant newspaper reported on Wednesday.

The company’s co-founder and CEO Yegor Guryev confirmed the deal to the newspaper. The share of the startup acquired by Darz was not disclosed.

 Playkey currently offers users about 250 games via its service, including Grand Theft Auto. Photo: GTA.

Playkey, which became a Skolkovo resident last year, is a cloud gaming service that allows gamers all over the world to play the latest video games on outdated PCs and laptops. It uses a network of powerful gaming servers to run games in the cloud and provide the user with a high-quality video stream of the game. The user interacts with the game in real-time, making playing in the cloud as simple as watching an online video.

Playkey is powered by a proprietary video encoding and streaming technology which guarantees top notch graphics and high processing speed, meaning players no longer need to download and install a videogame or invest in expensive hardware: the user’s hardware and system configuration are completely irrelevant.

The company will use the German investment to further its international expansion, primarily onto European and Asian markets, as well as to develop its platforms and infrastructure and increase the number of games in its catalogue, according to Kommersant. Currently, about 250 games are offered via the service, including Grand Theft Auto, World of Warcraft and BioShock.

A subscription to the Playkey service costs from 390 rubles ($6.50) per month – incomparably cheaper than splashing out on a new console or computer, the company notes. About 1 million people are registered for the service. Playkey shares the profit with the games’ license-holders.

Igor Bogachev, head of Skolkovo’s IT cluster, said it was a “landmark deal on the resurgent Russian market of gaming industry technologies,” noting that the Skolkovo Foundation’s council had decided to create a division focusing on gaming technologies two years ago.

“We believed then and still believe that the gaming sector is one of the key drivers of new information technologies. From a technological point of view, each online game is essentially a heavily loaded system with hundreds of thousands of users who are extremely demanding in terms of the performance and quality of that system,” said Bogachev.

“Such technologies are needed in all sectors of the economy.”

Bogachev said the Skolkovo Foundation had started looking for teams working in this field with the aim of making them more visible on the market and helping them to develop their products.

“It wasn’t easy, as many market players in this field, having felt a lack of support from the market in their own country, had moved abroad, primarily to Finland and Asia, which are notable gaming technology centres,” he said.

“Today, the IT cluster is home to 27 such companies. We invited Playkey to become a resident after it was among the winners of the Web Ready competition [for internet and mobile startups] in 2014,” said Bogachev, adding that he was delighted by the company’s latest success.