Online gaming and pricing: what to look out for

I have bought my first video game over the phone, thanks to an ad I found on Console Mania, then waited two weeks for the package to arrive, paid cash to the courier and finally put the cartridge in my Sega Megadrive for 35 hours of pure fun.

25 years later, I started managing the online sales of gaming clients and I have been supporting them in delivering the most outstanding consumer experience and the most seamless checkout process (I hope I do!).

However, regardless of region and size, any time I speak to a prospect videogaming client, the main topic is always Pricing. The sense of “am I being ripped off?” is often present and sometimes is not totally deserved. In the Financial Services world there is always some grey spot, and more regularly than expected, Pricing is one of these items that keep on eluding the eye.

But why the fees of video gaming are so hard to grasp? The main points are usually Average Transaction Value (ATV) and Currencies.

Low ATV means high InterChange cost, and this leads to either expensive Blended rates (e.g. over 4.00% for Visa EUR) or larger fixed part for InterChange based Pricing.

Currencies are symptomatic of the business model of most gaming companies. If the payments’ provider does not recommend the right pool or cannot supply multiple currencies, then the bank or the eWallets will do the conversions, with markups skyrocketing up to 6.00% with no transparency at all (6.00% on what?).

So, which would be a good setup for a gaming eCommerce merchant?

1. Multiple Currencies

If the merchant sells in more than one country, by offering local currencies, the cost per transaction may go down and the authorization will definitely grow;

2. Dedicated product offering: prepaid cards over premium cards

Why adding China Union Pay or American Express if the target demographic is neither Chinese nor wealthy? Better focusing on Paysafecard for instance and increase the appeal to unbanked and kids;

3. Splitting the products: low ATV with a given pricing, other products priced differently

One remittance account for in-game purchases (e.g. that beautiful rifle skin), one for recurring payments (e.g. the subscription to your favorite dungeon crawler) and one for the single purchases (e.g. that astonishing limited edition with the grey knight).

There are multiple ways for optimizing a checkout page and make it more successful, and I am positive that some will make good use of the points above.

I could talk for hours about improving the look and feel and increase the acceptance rate of the checkout page of a merchant in this vertical, but I need to get back to work and kill this irritating boss in Persona 5.