The gaming industry is booming, and Asia is the center. But it is also becoming more competitive. And as payments become more and more ingrained in the player experience, getting this fundamental element right is even more important.
The growth of gaming over the past three years has been rapid and there are no signs that this trend will slow down any time soon. Like many other digital shifts, the COVID-19 pandemic has accelerated a pre-existing trend as consumers spend more free time at home, on smartphones, or game consoles.
For gaming publishers, this has clearly been a huge boost to the industry. Global gaming industry revenues are expected to grow from USD 178 billion in 2021 to USD 269 billion in 2025, a 51% increase in just five years. And this is especially true in Asia, which is the world leader in the number of active gamers. Nearly half of all gaming revenues came from pre-COVID-19 in Asian markets and this percentage has been maintained despite global gaming growth over the past two years.
The role of payments
Another major trend in gaming is a shift in the way consumers pay for it. The old model of buying games at once is now obsolete in most cases; subscriptions and in-app purchases have become the norm for games on all platforms, from mobile games to the many major titles on the most popular consoles.
This trend has given publishers a lot more opportunities to monetize the games they produce. But it also means that payments are now a much more integral part of the overall player experience than before, and should therefore be considered much more carefully.
When you think of payments in gaming, there are three main factors to consider:
- Invisibility – Ultimately, players do not want to go through the process of making payments if it means pausing the game they are playing. So any payment should be as quick and painless as possible to encourage them to do it often.
- Safety – But at the same time, every game’s checkout process should be secure. Games have been proven in the past to be a target for scammers who saw the industry as an easy target.
- Choice – The payment landscape is becoming more diverse and in-game payment options should reflect that. Consumers are increasingly unprepared to spend money online if they cannot use their payment method of choice, especially those that have evolved into regional payment preferences.
Let’s look at these in more detail, and especially what they mean for gaming companies in the Asian market.
The impact of poor UX, card rejection and inefficient risk management
As we’ve already mentioned, one of the key criteria for payment success in gaming is that transactions such as subscriptions and in-app purchases are seamless and invisible. A clunky user experience with multiple verification steps is one way that registers can fail in this goal. Multi-step authentication processes, high delays or timeouts, or hidden fees can make a payment experience so frustrating that the consumer aborts the transaction and, in extreme circumstances, can stop the game altogether. And research suggests that APAC consumers have the highest rates of cart abandonment in the world overall, meaning gaming companies in the region should focus on providing players with the best payment experience.
Even more important can be the impact of payment arrears. If a player cannot complete a transaction because their card payment has been declined, this completely derails their gaming experience. A declined transaction not only negatively impacts the revenue for gaming companies that lose the individual transaction in the short term, but the frustration it causes for players can make the game unplayable in the long term, causing the operator recurring payments from loyal customers. customers costs.
Working with a payment partner that minimizes abandoned transactions and their associated fees is critical. Some of the criteria game partners should consider include:
- Will the payment company connect me with local acquisition and enable smart routing to maximize acceptance rates?
- Does the payment company prevent massive refusals of legitimate transactions and mitigate false positives through industry and regional expertise in risk management?
- If a legitimate transaction is declined due to human error or oversight, for example, a card that has expired for a recurring transaction expires, does the payment company have options to reinstate the transaction?
Fraud prevention
Unfortunately, gaming platforms have long been a target for fraudsters. This threat has increased over the past two years as bad actors have been able to hide more in plain sight due to the proliferation of players in general. Card-not-present fraud (where a fraudster uses stolen card details to make a transaction) and friendly fraud (where a consumer uses their own card details to make a legitimate transaction and then claims a chargeback) are both common in gaming, including in APAC.
Another practice game publishers should be aware of is cards, where a fraudster steals credit card information and tests its usability by making one or a number of small transactions on a relatively insecure platform, before proceeding to do so. more substantial transactions elsewhere. In-game purchases are a traditional target of this type of fraud.
Providing seamless gameplay through in-app purchases and subscriptions without compromising the security of the platform or players should be a priority. A risk management platform with real-time, highly configurable fraud detection capabilities and scoring engines is the optimal solution to maximize protection.
Checkout diversification
The APAC region is a diverse landscape when it comes to payment preferences, with local digital wallets being especially popular. And it’s not just the region as a whole that has marked payment preferences; within APAC, individual countries have their own local payment methods that have proven popular with consumers. So for gaming companies with ambitions to expand their player base across the region, having more options for making players pay is essential.
This is especially true because we know that there are several major payment methods that are important to consumers in many APAC countries. AliPay and WeChat are obvious examples in China, but countries like Malaysia, Thailand, and Indonesia all have different payment landscapes that don’t rely on card transactions.
According to research by Mastercard, 94% of consumers in APAC are considering trying an alternative payment method for the first time in 2022 and 84% said they already had access to more payment methods than in 2020. This includes crypto; 45% of APAC consumers are considering using crypto for payments in 2022 versus just 12% who said they had used crypto to make a payment by 2020.
And globally, younger consumers tend to be less dependent on traditional payment methods such as debit and credit cards than older generations. More tech savvy and less loyal to financial institutions such as banks, these consumers will be happy to switch to payment methods that provide a better user experience. Since gamers also tend to lean towards younger demographics, having a diversified checkout is even more important.
It’s an exciting time to play in APAC
And APAC remains the world leader when it comes to market size for the gaming industry. But there is one way to make the most of the opportunities offered by a booming industry, and that starts with payments.
Working with a payment partner that doesn’t offer you a one-size-fits-all solution, but can instead create a custom platform that fits your business strategy and needs is essential in today’s market. This is especially true in a region like APAC with so many individuals, unique markets. Gaming companies targeting customers in multiple APAC countries need to have a flexible, custom approach to their checkouts through a single integration with their payment partner.
Nuvei is the payment platform of tomorrow for the gaming industry. Learn more about how Nuvei can take your gaming platform to the next level today.
