Why are Alternative Payment Methods Important?

A games level of success can be measured by its availability geographically as well as how many payment options are available. Obviously with more payment methods available, more transactions are possible by more customers!

Ulyana Chernyak, Blogger

February 18, 2014

6 Min Read

One of the most important parts of having a successful product is making sure it is available to the consumer. However, in today’s society a products availability is reliant on more then if it is simply in stock. There are millions of payment options that developers need to pay attention to in order to deliver a game that can be successful world wide. Xsolla takes a look at why developers should offer different payment methods, and how it can affect the revenue brought by their product.

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World of Warcraft is available in 244 countries, and is even played in places like Antarctica. Blizzard did a fantastic job in offering a variety of payment option, which allows consumers from all over the world to enjoy the game. This is crucial to the games success, and many other games know how important payment systems are. World of Tanks, League of Legends, Planetside 2, and other hit F2P games have also focused on providing a multitude of payment options. Focusing on alternative payment methods increase revenue in territories where your product is already popular, and in territories where it can potentially become successful. While it can cost time and money to invest in different payment system it is ultimately beneficial.

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To show how important it can be to have a variety of payment systems, let’s create a realistic fictional scenario. Developer A has released a brand new MMORPG to the Japanese market that features a subscription base payment model. The game has received a lot of critical praise from the Japanese press, and they decide to localize the game around the world. However, Developer A decided to only focus on payment methods that were similar to the popular methods in Japan. The product was successful in some countries, but Developer A was sad to see that the game failed to take off in Russia. Instead, these consumers decided to play Developer B’s subscription base MMORPG which is a big competitor to Developer A. When Developer A tried to find out why their game didn’t take off in Russia, and why Developer B’s game rose in popularity they noticed that Developer B offered certain payment methods that they overlooked. Developer A was then shocked when they realized how popular the mobile payment system is in Russia, and began to asked themselves why didn’t they include this?

If you were to look in Japan, the most popular payment options are JCB credit cards and Konbini payments (made at convenience stores.) While credit cards are popular globally, Konbini like payments are centered mostly around Asian countries. One thing that Developer A overlooked was mobile payments, which are one of the most popular payment methods in Russia. MTC, Beeline, and Megafon are three mobile carriers in Russia that hold most of the market share. Mobile payments are not as popular in Japan, but they are very popular in Russia and in many other countries around the world. By not including mobile payment services, Developer A basically asked consumers to switch to a different payment method. This is a very risky request for any product to ask because most consumers will not find it worth their time. In the incredibly competitive video game industry, consumers have many options that do cater to their payment needs. Consumers may have been very interested in Developer A’s game, but it’s lack of mobile payment support made it a chore to play; which is why they chose Developer B’s game. Now, Developer A will have to include the mobile payment system and invest money in a new advertising campaign if they wish to have a foothold in the Russian video game market. If Developer A focused on making their product as welcoming as possible, they wouldn’t need to invest more money to satisfy consumers.

Payment options in russia and japan

To give a better example, here is a chart showing some of the popular mobile services in Russia, and the popular payment systems in Japan. Opening payment services for the Russian mobile providers instantly adds a potential audience of almost 190 million people. Not all of those 190 million people play video games, but a lot of them do. In fact, most developers who open up to mobile markets revenue increases by 20%, with purchases raising 35%. This shows that although it cost money for Developers to invest in alternative payment methods, it does prove ultimately successful. Let’s not forget as well, this is just the mobile payment market, there are an endless amount of payment service in the world. The fact that investing in mobile payment services alone can increase your sales by 20% proves how important it is to offer these services to consumers.

“We believe that having many different methods is the first step in customer satisfaction. The world of payment methods is huge and highly competitive. Users may be loyal to a particular payment system even before they start to play a game. It is a reasonable strategy for a game to provide methods that are comfortable for users.
That’s where the problem is. Games are often have payment systems that are comfortable for them. Maybe they are easy to integrate or they have strong protection from fraud. Sometimes this PS maybe also popular among users but not every time. Games have a reason of course to do so. You need to invest time (and maybe money) to integrate and support new PS. Some games are not ready to do so. But there are always a risk that a part of game users will be unsatisfied. (And by saying that I mean that those users won’t pay).
That is our vision for games – be as flexible as possible. If someone want to use cash-based payment in his hometown don’t tell him to find a different way but try to help him.” explains Peter Sokolov, payment system manager at Xsolla

While it may be inconvenient to invest in payment system, Xsolla believe it is necessary to achieve a high level of customer satisfaction.

Mobile-Payments