Payments is critical for success in the APAC gaming industry. Here’s why
The Asian market is the largest in the world when it comes to social gaming. But it’s also one of the most competitive. So there are huge opportunities for gaming companies in Asia, but getting the user experience right is vital for winning and keeping players. This starts with payments
![](https://cdn.prod.website-files.com/64199d190fc7afa82666d89c/64783adcfcafc4101ebca283_esports_asia_688x575.png)
The growth of gaming over the past three years has accelerated significantly, and there are no signs that this trajectory will slow down any time soon. Like many digital shifts, the COVID-19 pandemic accentuated a pre-existing trend; consumers are now spending more leisure time at home, on smartphones, or games consoles.This has been a huge boost to the gaming industry. Globally, industry revenue is predicted to grow from USD$178bn in 2021 to USD$269bn in 2025, an increase of 51% in just five years. And this is even more evident in Asia, which leads the world in its number of active gamers. Almost half of all gaming revenue came from Asian markets pre-COVID-19 and this percentage has been maintained despite the growth of gaming globally in the past two years.
Payments is key to gaming UX
Another major trend in gaming is a change in the way that consumers pay for them. The old model of buying games outright is now not the predominant method; subscriptions and in-app purchasing have become the norm for games on all platforms, from mobile games through to the most popular consoles.This switch has given publishers much greater scope when it comes to monetizing their games. But it also means that payments is now a much more integral element to the overall player experience, and therefore needs to be considered much more carefully.When thinking about payments in gaming, there are three primary factors that gaming companies must prioritize:
- Invisibility – The main driver of user experience must be the fact that players don’t want to go through the process of making payments that interrupt the game they are playing. So any payment needs to be as quick and frictionless as possible to encourage them to do it frequently.
- Security – But at the same time, any game’s checkout process must protect the publisher and the players. The gaming industry has is a proven target for scammers who view the industry as an easy target.
- Choice – The way consumers are paying is changing, and in-game payment options need to reflect that. Target customers are increasingly unprepared to spend money online if they cannot use their preferred payment method, particularly those that have developed into regional payment preferences. These preferences are becoming more diverse, so having more methods available in the checkout is even more important.
Let’s look at these in more detail, and particularly what they mean for gaming companies in the Asian market.
Card declines and inefficient risk management are damaging the industry
As we have already stated, one of the key criteria to the success of payments in gaming is that transactions such as subscriptions and in-app purchases are seamless to the point of being invisible. A clunky user experience with multiple verification steps is an example of how checkouts can fail in this objective. Multi-step authentication processes, high lag times or time outs, or hidden costs can make a payments experience so painful that the consumer abandons the transaction they are trying to complete, costing the business revenue. In extreme circumstances could stop them playing the game altogether. And research does suggest that APAC consumers have the highest rates of cart abandonment in the world generally, meaning gaming companies in the region must focus on giving players a best-in-class payment experience.Even more significant may be the impact of payment declines. If a player cannot complete a transaction because their card payment is declined then this completely de-rails their gaming experience. A declined transaction not only has a negative effect on revenues for gaming companies that lose the individual transaction in the short term, but also the frustration this causes players may determined that the game is completely unplayable, costing the operator recurring payments from loyal customers in the long term.Partnering with a payments partner that minimises abandoned transactions and their associated costs is critical. Some of the criteria gaming partners should consider include:
- Does the payments company connect me to local acquiring and enable smart routing to maximise acceptance rates?
- Does the payments company prevent mass declines of legitimate transactions and limit false positives through industry and regional expertise in risk management?
- If a legitimate transaction is declined due to human error or oversight e.g. a card used for a recurring transaction expires, does the payments company have capabilities in place to recover the transaction?
Directly challenging fraud
Unfortunately, gaming platforms have long been a target for fraudsters, and this threat has increased in the past two years as bad actors were better able to hide in plain sight due to the increase in player numbers more generally. Card-not-present fraud (where a fraudster uses stolen card details to make a transaction) and friendly fraud (where a consumer uses their own card details to make a legitimate transaction and then claims a chargeback) are both serious risks in gaming, and this is equally true in APAC.Another practice gaming businesses should be aware of is carding, where a fraudsters steals credit card information and test its usability by making one or a number of small transactions at a relatively unsecure platform, before moving on to making more substantial transactions elsewhere. In-game purchases have been a traditional target of these types of fraud.Offering frictionless gameplay via in-app purchases and subscriptions without compromising the safety of the platform or players must be a priority. A risk management platform with real-time, highly configurable, fraud detection and scoring engine capabilities is the optimal solution to maximise protection.
Integrating more payment methods at scale
The APAC region is a particularly diverse landscape when it comes to payment preferences, with local digital wallets being particularly popular. And it isn’t only the region as a single entity that has identifiable payment preferences; within APAC each country has its own local payment methods that have proved to be popular with consumers. So for gaming companies with ambitions of expanding their player base throughout the region, having more options to enable players to pay is essential.This is particularly true because we know that there are several key payment methods that are important to consumers in many APAC countries. AliPay and WeChat are obvious examples in China, but countries such as Malaysia, Thailand and Indonesia all have diverse payment landscapes that do not rely on card transactions.According to research conducted by Mastercard, 94% of consumers in APAC are thinking about trying an alternative payment method for the first time in 2022 and 84% said they already had access to more payment methods than they did in 2020. This includes crypto; 45% of APAC consumers are considering using crypto for payments in 2022 vs. only 12% that said they had used crypto to make a payment in 2020.We also know younger consumers are more likely to be less reliant on traditional payment methods such as debit and credit cards than older generations. They are more comfortable with emerging technology and tend to be less loyal to financial institutions such as banks which means they will happily switch payment methods to one that has a better user experience. As gamers tend to skew towards younger demographics as well, having a diversified checkout is even more important.
The future is bright for gaming in APAC
The APAC region will continue to lead the world when it comes to the size of its gaming industry market. But there is a route to making the most of the opportunities a booming industry provides, and that begins with payments.Working with a payments partner that doesn’t offer you a one-size-fits-all solution and instead can tailor a customized platform that suits your business strategy and needs is essential in today’s market. This is especially true in a region such as APAC with so many individual, unique markets to win business. Gaming companies targeting customers in multiple APAC countries must have a flexible, customised approach to their checkouts through a single integration with their payment partner.
Find out more about how Nuvei can take your gaming platform to the next level today.