Do you know what happened, though? Is it just the gamedev or a sign of general changes in gaming culture and the country going the Chinese way?
I always thought The Empire of Evil was firmly on the
hardcore PC-gaming side and relatively immune to Decline - which should keep the local gamedev scene in check.
Well, it's a little of both. As anywhere in the world, newer generation of gamers doesn't like oldschool games, they haven't played the classics (be it RPGs, TBS, RTS, various sims or even FPS and other genres). Our kids like their shitty MMOs and MOBAs, CODs, newer CS and so on. But then some part of the newer generation (more hardcore one, so to speak) respects oldschool RPGs (and other genres), at least in theory. Most still probably haven't played them, though. 25-40 years old bracket is much more hardcore, some played most of the classic games on release, and still want to play games made in similar style. Even with piracy we have quite many owners of recent Kickstarter RPGs on Steam here (can't link the source, the fucker restricted the Geo data to paid users, and even after Valve hit them with C&D letter he still left the info unavailable).
Problem is, most of our publishers either went belly-up, or were bought by «1С-СофтКлаб». It's a monopoly (at least in retail segment it has roughly 80% of the market share), made from merging Softclub and 1C (later they also have bought Buka, which is still publishing some games under its own brand, but financially is a part of «1С-СофтКлаб»). They specialize both on AAA releases and smaller ones, but it's all mostly localized games. Two other remaining publishers, Akella and Noviy Disk, for some reason are following this pattern too, and are publishing localized western games. Noviy Disk is also publishing and localizing console games, and various e-learning soft. Akella almost have gone bankrupt not so long ago, and now is a shadow of its former self. There's also Mail.Ru group, which has bought the whole gaming studios, or acquired individual talent and become a huge monopoly on online PC market.
I don't have any insider info, but from what I gather - neither of them think that financial investments into either creating some AAA Russian studios, or even supporting indie ones, is financially profitable venture, and so the are content with publishing and localizing games from other countries. Mail.ru Group is being an exception, they are both acting as publisher, and have internal development teams - but they are making and publishing online-only games.
Now why this particular business view has taken root I cannot say, I think one should be have degree in economics, have an insider info and make a study to answer this question, I can only speculate the this was somehow influenced by 2008 economical crisis and rise of the digital distribution.
Proper Russian cRPG, preferably steampunk or 1950s style space sf, is something I've wanted to play for quite some time, thugh I think my only contact with Russian RPGs was in form of some Gothic mods (not bad AFAIR)
Well, there's dead RPG which was going to be a mix of 50s USSR and postapocalypse -
http://www.novysoyuz.ru/ . Can't really remember any Russian steampunk game at all, even a prototyoe. As for 50s sci-fi - well, we had a shitty VN
Krasniy Kosmos about USSR in space, as for RPGs - I can't name a single one with such setting, alas.