The world of microtransactions has grown exponentially in both the mobile and console game worlds, a trend that both the PlayStation 4 and Xbox One are looking to accelerate along with their handheld kin in the future. But how does all the back-end magic work, and why should gamers and developers both care about making the process seamless? Those were the questions we posed to Ralph Dangelmaier, CEO of BlueSnap, who prepared the following post about intelligent payment processing in the gaming industry.
Payment Processing May be as Important as the Game Itself
Gamers today have become accustomed to the inclusion of microtransactions in the games they play. Most understand that in order to continue getting cool games, developers need to monetize somehow. Microtransactions are a great solution that can offer some wonderful toys and boons, but how do they actually work? Is there some guy on the other end who’s typing in all the orders manually with a calculator and log book? And, more importantly, why should we care?
Understanding Microtransactions
For the most part, not all game developers are inherently marketers. So while they may know their audience, they may not quite understand the intricacies of how to offer and deliver purchased virtual goods. That’s where companies like BlueSnap come in. These companies understand the importance of seamless transactions, cross-promotions and transaction management so the game can not only make the e-shopping experience enjoyable for the gamer, but also maximize successful transactions for the game developer or publisher. This is a good thing for players as well, as it ensures that the developer is getting proper revenue, instead of losing revenue due to a complicated store or failed payments. And if the developer gets the money, then the game gets more content, and resources to make more games. So it’s kind of an important part of the whole microtransaction event.
Where Money is Being Lost
It may surprise you to find out that not all purchases one makes in a game are supporting the creators of the game. In fact, some of these payments never get processed at all. This can happen for several reasons, like an out-of-date payment source, complications with a bank network, or even a poor network connection somewhere between the point of purchase and the merchant.
Processing a lot of microtransactions takes a lot of work, and again, that’s where third-party companies like BlueSnap come in. They take charge of the processing and offer something called ‘Intelligent Payment Routing’. This is an active approach where the company analyzes the details of each shopper and defines the most optimized route to process the transaction. A system like this has failover and retry mechanisms, so if for any reason the payment doesn’t get processed, it will try reprocessing through a different bank, where appropriate, and will notify the customer if the payment cannot be processed for whatever reason.
Even better, the infrastructure is already set up so the payments can be processed globally with a variety of different payment sources and originating countries.
Why Developers Should Care
Apart from the fact that having a third party manage payment processing means more revenue in the end, it also allows developers to rest easy knowing that their customers are being taken care of. For years now there have been a multitude of studies to figure out how to increase ARPU (Average Revenue Per User) in-game and these considerations can get complicated. Figuring out how to cross-promote and upsell is tricky business, and simply putting in an item shop will not necessarily equate to a profitable ARPU.
In addition, hiring an entire team of professionals to process payments, usually without Intelligent Payment Routing, can be more costly than resources or revenue would allow. Partnering with a company which will ensure payments are optimized, takes the burden off of developers to hire costly in-house professionals. Developers can then focus on game development while payments and processing are taken care of by a company with plenty of experience and know-how.
Why Gamers Should Care
Obviously, it’s important to support the game companies that an individual enjoys and believes in. Without that backing, the game developers would be unable to make the games at all. But perhaps most importantly is a point brought up near the beginning of this article: most game developers are not inherently marketers. They may have extraordinary talent in designing a game that’s fun to play and accessible, but they don’t necessarily understand intelligent payment processing or the most effective way to make their game profitable.
So, instead of taking resources away from game design and development, bringing in a third party like BlueSnap ensures that someone is looking out for their financial interests by providing a platform that’s easy and enjoyable by the consumer. Intelligent payment routing makes sure that the payments end up being processed properly and the funds end up where they’re supposed to, and more importantly, decreasing the amount of failed transactions.
In short, having the right people behind the processing can be just as critical as any other component in making a game a successful one.
Thanks to BlueSnap CEO Ralph Dangelmaier for contributing this guest post.
