Game on: How payments can boost the gaming industry
Today’s video game industry is innovating at pace and experiencing unprecedented growth. Massively popular game creation platforms like Roblox and online battle royal arena games like Fortnite offer players limitless opportunities to engage in immersive virtual experiences and connect with people around the world.
Games are more accessible than ever
The proliferation of budget-friendly Android-powered smartphones and high-speed internet has made gaming more accessible than ever. In the Middle East, Africa, Latin America and Southeast Asia, residents can now obtain a vast selection of games through their smartphone app stores.
It’s hardly surprising that the video game industry has surpassed the combined value of the music and movie industries. In 2023, the global gaming market generated $227 billion in revenue driven by 1.1 billion online gamers.
Many online games have adopted a more accessible approach, lowering the barrier to entry by utilising a free-to-play (F2P or FtP) – or “freemium” – business model. Using this approach, gamers can download and play a base game without any initial cost. Developers then generate revenue by offering in-game items or granting access to premium features through in-game currency, which players acquire by spending real money.
For example, in-game items on Roblox can cost anywhere from just a few dollars to several thousand. These digital goods encourage players to personalise their avatars, boosting user engagement and retention. This model generates a consistent revenue flow for developers and enables gamers to earn income by reselling these items to other platform users.
In-game transactions have also transformed the relationship between developers and gamers. Players are empowered with greater control and can customise their gaming experience. Meanwhile, developers can be paid for contributing add-ons and modifications to the game’s ecosystem.
From gamers to creators
In-game transactions are not the sole avenue for gamers to earn additional income. Social media and gaming have merged, giving rise to user-generated content (UGC) that can be monetised as part of the creator economy.
Gamers have the option to livestream their gameplay on video streaming platforms like Twitch, Discord or YouTube, and often provide commentary while they play. These content creators monetise their videos through advertisements and by offering loyalty perks such as badges to their subscribers and followers. For example, Discord content creators may grant paid subscribers exclusive access to discussion channels or custom emojis.
Subscription pricing for platforms like Discord can range from $3 to $200 per month. What’s more, content creators can retain a substantial portion of their earnings; a 90 per cent share is typical and earnings can be lucrative. Top-tier streamers with large followings can earn hundreds of thousands of dollars per month.
The crucial role of payments in gaming’s evolution
As creators develop content that attracts new gamers, you need a global payment infrastructure to support multiple payment processors and gateways to accommodate local payment methods.
For instance, in countries like Singapore, gamers are accustomed to linking their debit and credit cards to gaming payments. In contrast, in emerging markets such as Indonesia, where bank accounts and credit cards are less common, users may rely on digital wallets or prepaid cards as a primary payment method.
In addition, many gamers are Gen Zs or younger, and more likely to use alternative payment methods. Ensuring a seamless payment experience for all users, regardless of location or preferred payment channel, is key to sustaining the creator economy.
Developers can address these challenges by integrating a unified payment infrastructure that utilises different global payment methods. This step ensures that payments can be issued in real-time, without disrupting the all-important gaming experience. It’s not feasible for a player to wait 45 minutes for an in-game item transaction to process before her big match, or a content creator to spend five days checking his bank account to see if a subscriber’s payment finally arrived. Users expect instantaneous transactions, and delays diminish the gaming experience and lead to customer attrition.
Robust fraud detection and prevention is another vital aspect of payments infrastructure. Games like Fortnite, with millions of daily players and transactions across multiple gateways, require developers to implement stringent measures to safeguard against fraud.
How Thunes can help
Thunes provides platforms and developers with direct access to hundreds of payment brands. Our API provides businesses seamless integration with a wide array of payment methods, ranging from open banking and bank transfers to digital wallets.
We helped a leading Singaporean online games developer and publisher accept payments in new high-growth markets. Accepting local payments, subsequent currency exchange and settlement into foreign bank accounts is a notoriously complex process and can take days for transactions to fully complete.
Thunes’ solved this challenge by offering a single API connection so that players could pay for games instantly. In turn, we facilitated the real-time settlement of funds into the gaming firm’s domestic bank account in native currency, using one reconciled payment flow. In doing this, we provided unparalleled speed and transparency on the currency exchange rates. Our acceptance and settlement capabilities allowed this gaming leader to access an ardent fan base in 120 markets worldwide.
Thunes also provided valuable support to another video game marketplace focused on helping developers market and promote their games to players. We equipped this marketplace with a solution that makes it easy to accept payments globally. Through a single integration and contract, the marketplace accessed a wide variety of local payment methods such as bank transfers, digital wallets and vouchers. This company could then accept payments from players regardless of their location, preferred payment method or currency, and pay the developers in real-time. With this solution, the company’s marketplace became more scalable as developers could maximise their revenue in more locations, and concentrate on what they do best– making fantastic games.
Learn more about how Thunes supports digital merchants, including content creation and gaming platforms with payment solutions in 130 countries worldwide.