The Game is Changing
Year after year, online gaming continues to sweep the popular imagination. It's no longer a niche market targeting geeks, techies and kids. There are games for every kind of person, from point-and-shooters and crazy birds to crosswords, puzzles and quizzes!
If you look carefully, gaming is everywhere. You see it on your commute to work, at your local café, in the queue at the supermarket or wherever life takes you. If a person is absorbed with the screen of their smartphone, chances are they're playing a game. By taking it out of the home and into public life, mobile gaming apps are making a big impact on the way people use their time.
And the changes in gaming don't stop with mobile. It's not just about where people are playing, it's also about who people are playing with — social networks are a big driver of industry growth. Gaming is no longer a solitary experience. A person playing a game on their smartphone isn't necessarily playing alone.
Online gaming now often involves people all over the internet in a shared experience. One growth area in gaming is MMOs, or Massively Multiplayer Online Games. A player in Hong Kong might be teaming up or competing with players from different corners of the globe to go on quests and slay dragons. This translates into a rapidly growing network of prospective consumers.
The Opportunity for the Small Business
The impact of mobile and social on the gaming industry is significant. Asia has a market share of 48% — that adds up to 412 million gamers, which means enormous profit when you consider that the average spend per month for mobile gamers is US$2.86. And it's not slowing down. It is predicted to double in size by 2016.
This projected growth is a big incentive for a small business to get going. Especially when you consider how easy it is to get in the game — physical distribution and proprietary consoles are no longer a requirement for developing a successful game. As an example, Flappy Bird reportedly earned its creator USD 50k per day.
Tips To Get in the Game
Ultimately, a new game lives or dies based on the game play and the quality of the execution. However, at PayPal our experience is that commercial success also hinges on 2 factors:
Free Test Drive
A free test drive is a powerful way to showcase all the fun and get the consumer hooked on a game. Usually it works by letting gamers play for free until they reach a certain stage or require a given utility within the game. Skype is famous for this "freemium strategy," offering a free service until the customer needs additional functionality. In 2013, 92% of revenue generated on Android and iOS came from free-to-play games3.
Easy & Flexible Payment
Fraud can be a problem with digital goods such as games. Many game providers have set up prohibitive barriers for gamers to sign up and pay to avoid fraud. PayPal has created a solution that allows the game provider to lower these barriers without compromising security. The PayPal Digital Goods extension allows the user to easily make a purchase right in-context of the gaming app. It protects both seller and buyer and gives the customer the peace of mind to complete the sale in just a few clicks or swipes.