Game On: What Makes eGaming Thrive Behind the Scenes

Game On: What Makes eGaming Thrive Behind the Scenes

February 11, 2021

By Steve Villegas, Vice President of Payment Partnerships at PPRO

The explosive, global popularity of eGaming offers enterprise gaming platforms an expanding opportunity for increased revenues.

The U.S. is only one of the top five eGaming markets; the other four include China (the largest), Japan, South Korea and Germany. What’s more, the most significant growth is projected to be in the Asian and Latin American markets. Therefore, the bulk of the revenue opportunity lies outside U.S. borders. But only if they can offer a gamer’s preferred way to pay, which is trickier than it sounds when there are 500+ payment methods popular around the world.

Gaming platforms that enable local payment methods (LPMs)—options like e-wallets or bank transfers, for example—for all their geographic markets stand to reap incredible rewards.

A Growing Market

In 2020, the global gaming market was valued at $159.3 billion and is expected to nearly double by 2026. The greatest portion of that value is Downloadable Content (DLC)--online games and add-ons. The demand for DLC is so great that many gaming systems are even shifting to a digital-only model, and offering a cheaper price point.

One of the things that distinguishes global markets is how they pay. Two of the top three Asian markets—China and South Korea—rely predominantly on local payment methods (LPMs) like Alipay, WeChat Pay, and KakaoPay. In fact, 77 percent of all global e-commerce transactions are made via LPMs. However, not all game developers and distributors have enabled online purchasing using these local methods.

The impulsive nature of in-app purchases practically demands the most frictionless payment procedures possible. This is even more true on mobile platforms, where many players now spend their gaming time. Any unfamiliar payment system can take users out of the moment and be a barrier to purchase, and even a barrier to long-term play.

Making the Whole Experience Frictionless

LPMs are critical to improve customer experience and increase revenue growth. However, enabling payment method choice in various markets can be an expensive, complicated and time-intensive task. To implement such integrations, address the relevant regulations, and perform the necessary testing takes more than flipping a switch.

Fortunately, payment infrastructure platforms already exist to enable such integrations, offering the catered payment experience gamers require on whatever platform they use—console, desktop, or mobile. Because games must be localized in any case, the adoption of LPMs fits neatly into the development workflow. Country-specific platforms allow tailored versions of each game to be stood up quickly, in line with the product roll-out.

The ability of gamers to purchase using LPMs can be the decisive factor in the success or failure of a game in any particular market. Players in China—the largest gaming market with 24 percent of the global eGaming market—are likely to pay electronically through mobile e-wallets. Players in EMEA—a market worth $34.7 billion—tend to rely on regionally-specific bank transfer methods.

Even credit cards can be heavily regionalized, like South Korea, which has several preferred local cards such as BC Card, Lotte Card and T-Money. These local cards restrict international purchases; most cross-border processors will face skyrocketing decline rates. Mexico, another fast-growing market, relies heavily on a form of cash pre-payments through convenience stores, bypassing banks altogether.

Making the Most of Revenue

Any enterprise gaming platform looking to scale globally needs to accept locally preferred payment methods if they wish to maximize revenue. Teaming up with a provider of local payments infrastructure is the most efficient route; with a few simple APIs, infrastructure providers reduce the cost, complexity, and time to market for facilitating local payments.

When platforms team up with payments infrastructure providers, the gamers and the platforms both win. After all, games are all about winning.

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