There is no doubt about it: the global gaming industry is one of the most breathtaking success stories of our time.
It took over 35 years for the global games business to develop and grow to USD 35 billion in 2007, the year that the iPhone appeared on the market. Since then, not only has gaming evolved into an all-around entertainment phenomenon, but the lessons behind the success of this particular segment are shaping a wider culture, too.
The global games industry will hit USD 137.9 billion in 2018, with digital revenues accounting for 91% of the market, as indicated by a report by Newzoo. For companies working in the gaming space, and particularly in digital gaming eCommerce, this represents a tremendous monetization opportunity. And PayPal is one of the best examples.
According to PayPal online gaming research among paying gamers in 25 markets, the company’s gaming business increased by over 23% last year, accounting for more than USD 12 billion in total payment volume globally. The “Digital Gaming Global Overview” report (*) provides online gaming insights which are relevant from both a payments and strategic perspective.
Let’s take them one by one.
What are the 2 fastest-growing gaming video content forms?
The research findings point to eSports and livestream video content, in terms of viewership. With eSports revenues reaching USD 756 million in 2017, the potential for paid monetization of such content is huge. Also, according to PayPal, viewers are not reluctant when it comes to spending money to support streamers. The US ranks highest, with over 34% of livestream viewers reporting that they have spent USD 50 or more over in the past 3 months.
Against this backdrop, an important aspect worth mentioning is the fact that monetizing on video and eSports is a huge opportunity that can be explored only if customers have access to fast and easy ways to pay for content. Which brings us to the next aspect.
What are online gamers‘ preferred payment methods?
In a nutshell: while in general gaming consumers use a variety of methods to pay for their digital content worldwide, 1 in 4 gamers prefer to pay with PayPal. The main reasons cited by those involved in the survey for their choice are ease of use and speed.
Debit cards (any brand) come second, being mentioned by 13% of respondents, followed by Visa-branded credit cards (9%), Mastercard credit cards (9%), wire transfer (4%), Apple Pay and Google Pay (with 3% each).
Interestingly enough, only 13% of gamers worldwide select a payment method because they believe it is the most secure, while consumers in the Middle East and Africa regions tend to “put a relatively large premium on security”, as the research suggests.
Spending habits: in-game purchases vs. full game downloads
As the chart below suggests, money are being spent almost equally on in-game purchases and full game downloads in the US. Surprisingly, in-game spending is higher among older US players. More specifically, those 35-and-over have spent USD 50 on average, compared to USD 40 for the 18 – 34 age segment.
However, younger players prefer to spend a higher amount on average for full-game downloads: USD 63, versus USD 48 for gamers 35-and-over.
Where do gamers purchase from?
At a global level, active paying gamers involved in the PayPal research have purchased across 14 different gaming platforms and almost 30 different storefronts. Steam enjoys high worldwide popularity among the Millennial segment (31%), however GameStop is even more popular, with 45% of US Millennials mentioning it as their destination for shopping gaming content. This shows an interesting trend which is worth watching in the near future: in spite of the move towards the digital channels, established retailers are still relevant for a significant gaming audience.
Particularly in the US, online gamers buy from 26 different gaming storefronts, behind Russia (27), Australia and Canada (28 each).
The core of a gamer’s payments experience?
You have guessed it already: checkout. Nothing should interrupt the gaming experience – irrespective of the channel – that’s why a seamless payment experience to help turn players into payers is just as crucial as in any other vertical.
Online gamers are selective when it comes to their checkout options: 50% of global customers (and 44% located in the US) have indicated that they give up their online purchase if their favorite payment method is not displayed at checkout.
“The act of playing a game no longer encapsulates all the ways people engage with game content. For example, there is a fast-growing group of millions of <lapsed> gamers who now watch esports to express their passion for gaming. The term <gamer> has become obsolete.”
– Newzoo –
Having that in mind, it becomes ever more important for developers and publishers to ensure a great in-game checkout experience to better serve customers.
* The PayPal online gaming study was conducted in February – March 2018, across 25 markets and nearly 25,000 active paying gamers worldwide.
Interested in making your online gaming company a success? Download one of our latest eBooks and learn how to combine all elements of your marketing, product offering and payment solutions into a coherent process.
Adriana Screpnic, Content Marketing Specialist, G2A PAY