You don’t need to parent a teenager to know that the gaming industry is huge. In fact, from 2012 to 2017, consumer spending on video games increased by 54% and this is a trend that isn’t stopping anytime soon.
By 2020, the global video game market is expected to surpass $90 billion, up from $78.61 billion in 2017. And it’s not just kids who love to play video games. Counter to the stereotypical gamer, the average male gamer is 32 and the average female gamer is 36.
It may seem surprising that gaming is such a lucrative industry because so many video games are inexpensive or even free. But for many video games, the free download is an initial hook which leads to ongoing in-app purchases.
For instance, the video game sensation Fortnite is free to download but the company makes an average of $1 million per day from player spending. Over 68% of Fortnite players have made in-app purchases and the average price per spender is $84.67.
The Importance of Cashless Payments
Of course, most companies in the gaming industry aren’t cashing in the way Fortnite is. And as the industry becomes increasingly competitive, new gaming companies and operators of Arcades and Family Entertainment Centers are working to stand out and differentiate themselves and the gaming experience.
One of the best way they do this is by creating a positive user experience and incorporating cashless payments into their gameplay. This means they offer their customers a variety of flexible payment options and rewards. Rewards, after all, is the essence of gamification.
Credit and debit card payments, digital wallets, and voucher-based systems are all examples of cashless payments and I could write volumes on their utilization and impact. However, listed below are just a few things to keep in mind when thinking about integrating a cashless payment system.
Let users make in-app purchases
As societies become more digitally inclined, the best way to monetize your game is by allowing users to make purchases without having to stop playing or by at least reducing the friction involved with payment. Your customers have probably experienced this scenario when playing arcade games.
You’re playing a game, you eventually run out of lives, and a prompt appears giving you the option to purchase more lives so you can continue playing.
Cashless purchases tend to be more effortless, so users don’t give a lot of thought to these purchases. However, they can add up quickly, especially if you have a large volume of transactions.
In-app purchases become most relevant when developing an omnichannel experience for your customers so the timing of implementation should consider your overall marketing and sales strategy not just the gaming side of your operation. More on that in a future article…
The checkout process should be easy
Stored Value Cards are still the dominant media in the cashless space but the quickest way to lose customers and velocity is by making the reloading of value or the redemption process tedious and difficult. This is especially true for gamers, who dislike anything that interrupts the gaming experience for any length of time.
Give customers the option to use self-serve kiosks so the checkout process is quick. And make sure your payment page adapts to multiple devices that can scale.
Accept international currency
The gaming industry is a global movement so if you’re not making an effort to consider global gamers, you’re short-changing your company. Though I’ve had to work and solve currency solutions for International clients, this isn’t always a factor for operators.
However, if you’re a large operator with the potential for international traffic, make sure you can accept international currencies and give users the option to pay in their home currencies.
And, perhaps more importantly, when necessary, your payment page should adapt to multiple languages. This will provide a seamless checkout experience for your customers, regardless of where they’re located.
Do your part to reduce fraud
Unfortunately, as you increase your payment options, you also increase your risk of fraud. Fraudulent activity and account takeovers are common problems in the gaming industry, so you’ll need to have a plan for how to handle these.
Because every fraudulent charge is a potential chargeback that will cost your company money. Not to mention, this could damage your company’s reputation and cause you to lose business.
The best way to reduce fraud is by using a PCI-compliant payment gateway, tokenization, and incorporating tools that will detect and prevent fraud such as EMV chip-based devices.
Love it or hate it, good or bad… Cashless payments are quickly becoming the new norm and working on a strategy of how best to implement a solution is going to be the work that all businesses will eventually have to undertake as consumer expectations increase in this area.
Fortunately, the benefits outweigh the challenges and as technology increases in this space, implementation becomes more integrated into overall biz ops.
To your success!
Written by Brian Johnson
Sr. Director, Business Development