focus on”Adyen Global Payments“Official WeChat, download the full version of “China Games Overseas Payment Research Report”
Game-Time report/In the past few years, “If you don’t go overseas, you will be out” has almost become the consensus among developers in the industry. However, it is undeniable that after the impact of multiple factors such as the fading of market dividends, the continued downturn of the global economy, and new changes in privacy policies, it is a recognized phenomenon that the current global environment for overseas business is becoming increasingly difficult.
The Game Working Committee’s “2023 China Game Industry Report” shows that this year’s actual overseas sales revenue of self-developed products was US$16.366 billion, basically maintaining the level of 100 billion, but the output value scale continues to show a downward trend. The more essential reason is that going overseas has moved from the barbaric growth stage of rapid development to the high-quality stage, and diversified business breakthroughs have become the way to break the situation.
This not only refers to the diversification of product choices for overseas distribution, but also means that in addition to regular links such as research and development and customer acquisition, payment operations and overseas infrastructure are also important footholds for the diversified business expansion of game companies.
At last year’s China Game Industry Annual Conference Game Trends Forum, global financial technology platform Adyen and Gamma Data jointly released the “Research Report on Chinese Game Overseas Payments” (hereinafter referred to as the “Report”), focusing on how Chinese game companies are easily exploited in the process of going overseas. An important link in overseas infrastructure construction that has been ignored but becomes increasingly critical is game payment.
focus on”Adyen Global Payments“Official WeChat, download the full version of “China Games Overseas Payment Research Report”
Overseas knowledge: the increasingly complex global payment system
More and more evidence shows that as Chinese games enter deep waters overseas, payment has become an important part of publishers’ overseas market layout. However, while the process of going overseas is in full swing, the domestic gaming industry generally lacks a clear understanding of the existing global payment system, and there is an urgent need to correct deficiencies.
The “Report” shows that about 50% of overseas revenue is concentrated in the United States and Japan, two mature regions. Refined operations, including payment, can help cultivate the competitive advantages of localized services and help overseas game companies break through in mature markets with fierce competition. In contrast, in emerging markets such as Southeast Asia and Latin America, due to lack of experience, localization capabilities around operations, customer acquisition, payment and other aspects will become the key.
It is reported that when enterprises choose payment methods, they first need to consider the payment success rate, and factors such as payment cost, security, and convenience are all key considerations for more than half of the enterprises. The subtext behind the complex considerations is that compared with the stable payment environment in China, the payment ecology in overseas markets is often more complex, which means that the construction of payment systems for overseas game companies faces greater challenges.
The complexity of the global payment system is mainly reflected in regional diversification. That is to say, different regions have significant differences. There are more than five relatively common payment forms in almost every region, and there are also differences in mainstream payment methods between regions. Publishers need to evaluate and prescribe the right medicine based on local market conditions, which greatly increases the difficulty for companies to go overseas in depth.
Let’s look at mature markets first: For example, in the US payment environment, 75% are processed through debit and credit cards. In terms of games, bank cards and PayPal are still strong in PC-side payments, followed by Apple and Google Wallet; in Japan, bank card payments account for a larger proportion, but the cash usage rate is also high. For example, Konbini (convenience store cash payment) is a common payment method in Japan, and virtual transactions such as games have also begun to be tried.
On the other hand, the mainstream payment methods in emerging markets are completely different: bank card penetration rates in Southeast Asian countries are generally low. With the digital reforms of various countries, the rapidly developing local e-wallets have become a long-term effective strategy for game payment; cash payments in Latin America still occupy a certain status, but a number of new payment methods have begun to emerge, such as Colombia’s PSE, especially the penetration rate of Brazil’s Pix payment system, which has exceeded 80%.
The “Report” further points out: Countries (Europe, the United States, Japan, South Korea, etc.) that are dominated by bank card payments need to pay attention to the optimization space of bank card payments; for the “blooming” of local payment methods in emerging markets, they need to consider aggregating more information through integrated platforms. Multiple payment methods and reduced docking costs.
Cross-terminal, cost reduction and efficiency increase are on the rise, and the importance of third-party payment services is highlighted.
The importance of game payment in going overseas is extremely precious nowadays. In an environment where the growth of the global game market is slowing down, investments in R&D expenses, traffic costs and other dimensions continue to increase, putting greater pressure on overseas manufacturers to survive. When it is difficult to go overseas, reducing costs and increasing efficiency has become a common appeal of game companies.
The CTO of a leading company that exports games overseas believes that payment optimization for overseas games may be one of the links with the highest ROI amid the current slowdown in market growth. According to Game-Time, compared to the large investment in other links such as R&D, the small investment in game payment can “leverage” considerable revenue optimization. The series of cost reduction and efficiency gains rolling out from this are worthy of the industry’s attention.
This is also the direction that more and more leading companies are trying, but from a practical perspective, payment is actually still a major pain point in the current overseas expansion of games.
The “Report” shows that poor user recharge/payment experience has become the biggest problem in the overseas payment environment in the eyes of more than 60% of companies. At the same time, payment security, platform official payment channel restrictions, payment costs and payment compliance are also key concerns of the interviewed companies.
For example, issues such as fraud and information security leaks often cause overseas companies to suffer losses; the official platform payment channel rates are relatively high, which easily affects payment costs; and the regulations in various regions are complex and changeable, and there are few manufacturers with relevant talents, so 45.5 % of the companies surveyed attach great importance to payment compliance issues.
This means that publishers often need to choose a more balanced and comprehensive solution when it comes to optimizing payment for overseas games.
It is also worthy of attention that since cross-terminal products such as “Genshin Impact” and “Among Us” became popular, multi-terminal games have become more common around the world. They have been launched on multiple platforms such as PC, mobile and console, and are becoming a game The new standard in the industry. But this also brings new challenges to game payment:
With the rapid spread and popularization of the multi-terminal gaming trend, three-party payment has immediately become a “must-test question”. Different from mobile game payment entering the “black box” of Google and Apple, this requires manufacturers to operate the payment themselves, and the optimization space needs to be focused on.
As mentioned in the “Report”, among the current payment shares of game companies, 60% of game companies’ three-party payment channels account for more than 30%, which has become the mainstream choice of game companies. However, some companies mentioned that there are deficiencies in the current third-party platform qualifications and management, customer service quality, and one-stop solutions. How to select professional third-party payment platforms has become increasingly critical.
Considering the complexity of the global payment system, and being affected by the current industry wave of cross-terminal, cost reduction and efficiency improvement, whether we have local acquiring licenses and qualifications in the future, and whether we can support access to hundreds of global payment methods through an integrated platform… It will become the selection standard for payment service providers in the gaming industry.
Going overseas has entered a stage of refinement, and payment optimization has greater value
In the past few years, games have been booming overseas, setting off a huge wave of globalization in the gaming industry. From the overseas export of products to the overseas export of talents, technology and even the entire team, “If you don’t go overseas, you will be out” is like the Sword of Damocles hanging over every manufacturer’s head.
Nowadays, as the growth of overseas markets slows down, Chinese games have gone through the stage of brutal growth and have to carry out more refined layout and transformation. On the one hand, it is actively conducting horizontal exploration in order to create the next key overseas area in emerging markets such as Southeast Asia, Middle East and Africa; on the other hand, it is digging deeper, entering the localization operation 2.0 stage, and expanding the diversified business layout of overseas infrastructure.
The “Report” shows that optimizing and improving the payment link itself will help revenue growth. For overseas game companies in a period of rapid development, the contribution of payment optimization may be even higher. In other words, payment is no longer just a separate link in the business process, or a simple infrastructure element, but can become an engine that drives user growth.
Therefore, gaming companies need to continue to improve their ability to control recharge channels. The “Report” further pointed out that self-built official channels can meet the needs of enterprises to reduce costs and increase efficiency, comply with the trend of multi-terminal development and interoperability, and are more conducive to strengthening the connection between manufacturers and players, and are becoming one of the directions to solve the diversified needs of overseas game business.
The multi-dimensional potential value of payment also awaits the long-term layout and further exploration of overseas game companies. During this period, although professional third-party platforms have the methods and resources to solve payment problems, they also present many challenges.
How to screen and evaluate professional payment service providers to meet the needs of overseas companies to improve local services and achieve long-term development, and even make “payment” one of the core competitiveness of the game business, and become a one-stop international payment represented by Adyen Background to platform launch.
The “Report” also provides some reference dimensions for overseas game companies to evaluate payment service providers and establish a reasonable screening mechanism:
For example, in popular markets such as the United States, Japan, and South Korea, where bank card payments are the “biggest”, game companies need to focus on whether they have local acquiring licenses from various countries around the world when evaluating payment partners. At the same time, the platform capabilities are evaluated from multiple aspects such as technical strength, data analysis, team services, etc., whether it can directly connect to the most upstream, and have “first-hand information” on payment data and information.
It is reported that more than 60% of enterprises hope to aggregate multiple payment channels to help enterprises improve their resource integration capabilities. Therefore, in addition to bank card payment, whether it supports multiple local payment methods around the world and whether more payment methods can be aggregated through a single platform without having to cooperate with multiple payment service providers are also important indicators.
Payment costs are also a factor that overseas companies attach great importance to. The “Report” shows that nearly half of the companies hope that payment costs are transparent and reasonable, and the settlement process is clear and controllable. Optimizing the payment experience, improving payment transparency and reasonable billing models and providing transaction reports to help companies reduce costs and improve success… are all details that need to be judged when screening third-party platforms.
Opportunities and challenges coexist, which is always a topic faced when games go overseas. How to resolve difficulties with cleverness and seize opportunities in advance is a challenge that every overseas manufacturer needs to face at all times. Compared with conventional links such as R&D and distribution, in the current industry context, exploring game payment optimization requires more and more attention from overseas manufacturers.
focus on”Adyen Global Payments“Official WeChat, download the full version of “China Games Overseas Payment Research Report”
