Article

Subscription billing in the video game industry

Anirudh Kaulgud | Strategy, Worldpay from FIS

September 06, 2021

Video game technology has advanced rapidly over the decades, and each new generation of game consoles leads to significant advances in the way players access and enjoy their video games and related media.

Now, developers and publishers are looking to emerging payment trends to further the transformation of the industry.

The growth of video game subscriptions

Subscription billing services are a fairly recent development in the video game industry, but they are already changing how players interact with their devices – and changing their payment preferences, as well.

The console giants are leading this transformation, perhaps inspired by the success of video streaming services. The subscription model clearly fills a niche, with rising subscriber numbers across a variety of services. One leading provider’s game pass, which provides access to popular video games via a monthly payment method, recently surpassed 23 million subscribersi.

The amount consumers spend on subscription video gaming is forecast to increase by 13.5% in 2021ii. The Worldpay from FIS® research report “Ahead of The Gameiii” also emphasizes the large jump seen in digital game downloads over the last year: In just one week in March 2020, 2.74 million games were downloaded even though no new games were released that week.

How do they work?

Video game subscription services give users access to a catalogue of games for a fixed monthly fee, differing from the traditional model of paying for each game individually. This offers consumers greater choice, provides publishers with a broader audience and can help consumers save money.

The games are available to download on demand, but that is not where revenue generation potential stops. Monetization of content, via microtransactions, continues even after players download a game. Via microtransactions, players can make additional purchases of in-game items like cosmetics, story expansions and upgrades for player characters.

However, service providers and publishers must ensure that they offer the right payment methods and are current with the latest payment trends if they are to reap the full benefits of this new approach to gaming.

The critical role of payments in subscription-based gaming

A streamlined customer experience is vital for the changing video game industry.

Given the fast pace of video games, it’s no surprise that gamers want fast and secure payments. If customers find that they have to input payment details every time they want to renew their subscriptions, or interrupt their gaming experience for a microtransaction, the likelihood that customers drop out of the process increases.

Our Power Your Payments for Video Games reportiv examined consumer payment preferences and found that digital wallets and alternative payment methods (APMs) are the preferred payment method in many markets around the world, demonstrating the need for player convenience and choice at checkout.

And to ensure recurring revenue from subscription payments continues, businesses must ensure that stored payment details are updated regularly and protected by high levels of security.

Worldpay from FIS®, as a partner to the video games industry, provides the tools businesses need to optimize payment processes.

From our Account Updater tool, which stores and updates details for expired cards automatically, through to our extensive support of over 300 APMs, Worldpay from FIS payment tools maximize your ability to offer subscription billing and in-game microtransactions.

Talk to Worldpay from FIS today to learn how we can help your video game business level up its payments infrastructure.

Sources:

iB.Reeves (2021) Xbox Game Pass Hits 23 Million Subscribers. Screenrant. [https://screenrant.com/xbox-game-pass-subscriber-count-tops-23-million/]

iiJ.Clement. (2021) Annual growth of consumer spending on video game subscriptions worldwide from 2021 to 2025. Statista. [https://www.statista.com/statistics/1240342/consumer-spending-video-game-subscriptions-growth/]

iiiWorldpay. (2021). Ahead of the Game: The Rise of The Video Game Subscription. FIS Global [https://www.fisglobal.com/en-gb/insights/merchant-solutions-worldpay/research-and-reports/ahead-of-the-game-the-rise-of-the-video-game-subscription]

ivWorldpay. (2020). Power Your Payments: Video Games. FIS Global [https://offers.worldpayglobal.com/payments-video-games.html]

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