The global games market is massive. It was expected to reach USD 137.9 billion in 2018. By 2021, mobile gaming alone (on smartphones and tablets) will be a USD 100-billion market. While the potential revenue opportunity for games has never been higher, the free-to-play model and the abundance of game choices give gamers the power to choose where, how, and when they spend. To gain a deeper understanding of gamers’ paying habits, payment experiences, and payment preferences, ACI Worldwide and Newzoo conducted a large-scale study on paying gamers in the US, the UK, and Germany. These key markets account for almost 30% of 2018’s global games market.
Along with a demographic profile of paying gamers and their motivations to pay, our research details the payment and fraud experience. In particular, we turn the spotlight on how companies can optimise payments to provide a smooth customer experience.
Younger gamers are driving the transition to digital
Looking at the type of in-game purchases people make, there are notable differences between age groups and gender. Cosmetics/skins, which are visual and don’t affect how the game is played, are more popular with younger payers (compared to older payers). On the other hand, power-ups, which do affect how the game is played, are more popular among older payers. Overall, DLC/expansion packs (purchasable content offered in addition to the base game) are the most popular in-game items for younger payers. Women are more likely to buy power-ups and time-savers than men in all three countries.
Gamers’ payment habits and fraud concerns
PayPal is the most used and preferred payment method on every game platform – console, PC, and mobile. Mastercard is the most common second choice. It will be difficult for new payment players such as Google and Apple Pay to dethrone these current leaders. Younger players, though, are using the new payment options more than older players.
Payment fraud is a top concern for gamers and a continuing barrier to payment. In fact, 19% have experienced fraud when paying for games online, while one-third of paying gamers say concerns about fraud make them less likely to spend within a game. This highlights the fact that trust and security are still extremely important factors for consumers.
Security measures add friction for US and UK players
Despite being concerned about fraud, 44% of paying gamers in the US agreed that encountering additional security measures when making in-game purchases negatively impacts their gaming experience, making them less likely to pay. Payers in the UK were also negative about encountering additional in-game security measures, with more than one third agreeing with the statement. Interestingly, only 19% of German payers agreed, indicating that these extra security measures are less of an issue from them (compared to gamers in the other countries). As Germans are typically slower to adopt digital online payment methods, these additional security measures may help them feel more confident with the digital payment process.
Payments experience gap in gaming
Many paying gamers (44%) think that the payment experience within games can be improved. Almost a quarter (24%) of these would like to see loyalty/reward programmes offered for in-game payments. Younger payers consider simplifying the payment process and making more payment options available to be more important than the older age group. What’s more, a much higher share of older payers than younger payers would like the option to register their payment details in advance and to skip security measures after completing them once.
We made detailed results of this study available in a whitepaper, which you can download here.
This editorial was first published in our Payments and Commerce Market Guide 2018-2019. The Guide presents the key trends and developments in global and regional payment methods by highlighting the innovation, challenges, and developments in the use of the most important payment methods across geographies and verticals.
About Emma McDonald
Emma is the Director of Marketing at Newzoo, the global leader in games and esports analytics. Together with her team, she strives to educate the market on the latest trends and developments in the booming games and esports sectors and, importantly, what other industries can learn from them.
About ACI Worldwide
ACI Worldwide, the Universal Payments company, powers electronic payments for more than 5,100 organisations globally. ACI’s UP eCommerce Payments solution is an integrated payments gateway and fraud management solution that supports the gaming, retail, and digital goods sectors, offering access to an extensive global payments network, with immediate coverage in more than 160 countries.
About Newzoo
Newzoo is the leading global provider of games and esports analytics. The company helps businesses to understand the latest consumer trends in digital media and tech, working closely with its clients to provide the data they need to make daily decisions on marketing, sales, and product development.
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