Stories

Tim Fu, Market Leader, Hong Kong, South Korea and Taiwan, PayPal

Imagine a player who has just downloaded a new game which you spent months developing. They got past the initial set up and tutorial, only to find that every time they make an in-game purchase for new skins or content, they will need to input their card details and wait for the transaction to process. Will the player still feel motivated to continue investing time in the game?

With people spending more time at home and looking for new forms of entertainment, the video game industry achieved spectacular growth during the pandemic. Even as the world starts to reopen, the growth of the industry shows no signs of slowing. Observers expect that revenue will grow by around US$10 billion in 2022 alone totalling to an amount exceeding US$200 billion by the end of the year. ¹  To put things into perspective, the increase alone slightly exceeds the total gaming revenue in Latin America, meaning that the growth amount alone is equivalent to adding another LATAM market to the global gaming market. The number of video game players globally is also expected to rise to 3.07 billion next year, compared to 2.69 billion in 2020. ²

Closer to home, the APAC region continues to stand as the biggest gaming market in the world. Home to 55% of global gamers, the region makes up 49% of global consumer spending in the sector. Meanwhile, the gaming segment in Hong Kong is expected to grow at a CAGR of close to 9% with the market volume expecting to reach around US$175 million by 2026. ³ In short, the gaming industry has shown itself to be highly resilient as it continues to post record numbers.

The time is ripe for local game developers and publishers to expand player base and further monetise their titles. Providing excitement through innovative game design and mechanics is, of course, a key factor in getting players’ attention. But as the opening scenario illustrates, retaining players goes beyond the gameplay itself. From building seamless payment systems for in-game purchases and downloadable content (DLCs), to boosting the security of the payment process, optimising the overall player experience can play a crucial role in catalysing growth for game developers and publishers.

Seamless in-game transactions

The free-to-play pricing model has emerged as one of the most effective monetisation strategies in recent years with developers and publishers generating a significant portion of their revenue from in-game purchases, such as microtransactions and DLCs. By 2023, in-game revenue is expected to make up 77% of global game revenue. ⁴ Accordingly, implementing a seamless process for in-game transactions is key to improving the overall player experience.

Leveraging the benefits of digital payment platforms is one of the most effective ways for developers and publishers to optimise the in-game transaction process. Gamers in Europe, for example, cited “ease-of-use” as the top reason for using PayPal to make payments. ⁵ Instead of entering card details and personal information in full, digital payment platforms enable players to simply log in with a username and password to complete transactions. By minimising the steps required to purchase DLCs and make microtransactions, such platforms allow players to spend more time enjoying the thrills and action.

In addition to improving the gaming experience, digital payment platforms can also help developers and publishers reach players across borders. With support in multiple countries and regions, global digital payment platforms allow developers and publishers to easily adapt their titles to include payment options favoured by players in different localities, making the gameplay more intuitive and enjoyable for more people.

Safe and secure gaming experiences

The growth of gaming presents exciting opportunities for developers and publishers. At the same time, the increasing popularity of the medium also makes it an attractive target for malicious actors, especially when it comes to PC gaming. A research found that the rate of online fraud attempts related to the gaming industry jumped to 393% in just one year. ⁶ Meanwhile, another study found that a fifth of gamers had either experienced gaming-related scams directly or knew someone who had. ⁷

Security threats can affect the bottom line as game developers and publishers can lose up to 40% of in-game revenue and microtransactions to fraudsters each year. ⁸ In addition, the presence of end-user vulnerability can also damage players’ trust in the safety of the game and overall reputation of the game developer or publisher.

Adopting secured payment platforms to process IAP transactions can greatly reduce security risks. For example, PayPal offers TLS (Transport Layer Security) encryption and two-factor authentication to ensure a secured environment for transactions. Coupled with round-the-clock fraud detection monitoring, the platform enables game developers and publishers to quickly identify and respond to threats and fraudulent transactions. PayPal’s seller protection* also extends to cover digital goods, meaning that developers and publishers can join the program to have a chance to recover their losses should the unfortunate happen.

Optimise player experience and capture untapped growth opportunities

There is no better time than now for game developers and publishers to expand and grow their titles. By creating a seamless and secure player experience, developers and publishers can boost revenue streams, expand their player base and bring the joy of gaming into the lives of more people around the world.

*Terms and conditions apply

Read this article in Chinese here.