Game On: The Intersection of Paying and Playing

As the global community of online gamers is expected to exceed three billion people in 2022¹, Visa Consulting & Analytics (VCA) has identified the key facets of the online gaming market. Gamers are becoming an increasingly interesting consumer segment for payments businesses, spending more time (98 minutes a day on Fortnite compared to 39 on Snapchat) and money ($2,761 compared to an average of $2,434) on gaming activities².

In this paper, VCA investigates the consumer base, revenue models, integration of payments, challenges and opportunities for payments businesses that characterize the gaming landscape.

Given the predominance of digital delivery and the rapid growth of freemium models and in-game purchases, there is considerable potential for publishers and marketplaces to influence “top-of-wallet” payment behaviors. This is due to the closed-loop nature of the marketing channels on the platforms, which limits a financial institution’s ability to influence payment behaviors.

The online gaming industry is united in supporting three primary operating platforms, mobile devices, video game consoles and personal computers (PCs). Online gaming has four primary stakeholders, gamers, developers, publishers and distributors and four gamer segments, namely, hyper-casual, casual, midcore and hardcore.

With the emergence of new revenue models, the gaming ecosystem has become increasingly more complex, with many parties and myriad payment flows, such as business-to-business (B2B), consumer-to-business (C2B) and, with the emergence of play-to-earn gaming, the potential for business-to-consumer (B2C) and consumer-to-consumer (C2C) payments.

Given the gaming industry’s diverse revenue streams, a simple, seamless, and integrated payment experience is imperative, whether the user is managing their subscription, trading in-game or completing a purchase at checkout.

There are four main ways in which the dominance of the digital medium in gaming creates opportunities for payments businesses to engage with and bring new value to the online gaming community.

Loyalty management: Incorporating features such as rewards schemes to incentivize specific behaviors and expand the gaming user base. This can be applied across the online gaming community and its success is measured by growth in new gamers, transactions per gamer and the value of transactions.

Authorization & fraud management: Improving user experience and revenue generation by implementing new tools that will both increase authorization rates and reduce fraud. Success can be measured by the volume and value of transactions permitted.

Streamlining B2B payments: Removing complexity and reducing friction from B2B payment flows by offering seamless payment processing. The criteria for success consist of the cost of setting up such payment infrastructure, the cost of processing payments and upstream B2B transactions and revenues.

Crypto in e-gaming: Enabling seamless ways to transact using crypto currencies on gaming platforms. Developers, acquirers, and payment networks can all benefit from engaging with crypto in the gaming space, activating more e-wallet use and facilitating near instant transactions.

Finally, the paper considers existing relationships with leading financial institutions who offer best practice examples for engaging with the online gaming community; from co-marketing partnerships to boost engagement, to developing unique banking IP assets to create preferential brand selection.