While North America and Western Europe are the core regions for PC and web game developers, Asia has recently emerged as a gaming superpower:
A few years ago, most people in Asia did not have access to video games. Today, the widespread popularity of cybercafes combined with cheaper prices of smartphones means almost every person in Asia can play games.
However, while the region has the largest amount of potential gamers, revenue per gamer is substantially lower compared to Western countries:
- US: 173M gamers, $54.97 average revenue per user (ARPU)
- UK: 17M gamers, $74.34 ARPU
- India: 121M gamers, $6.75 ARPU
- Turkey: 14.2M gamers, $17.40 ARPU
- Indonesia: 62.1M gamers, $10.09 ARPU
The gamer audience in India is almost as big as in the US, but every user spends almost 10x less money on games. One reason is that incomes are lower which means less is also spent on entertainment. The second reason: people are simply unable to pay.
Most video game developers use a standard approach to collect payments for their games: credit card payments. But how many people in emerging Asian countries actually have a credit card?
If only 3% of people have access to the payment methods inside the game, how can the other 97% of people pay?
Local payment methods to capture the gamer audience in Asia
If most people don’t have access to payment solutions currently offered, the only way to convert them into paying users is to add payment methods that they actually use. SuperData tracks digital gaming transactions across the world and here is how the payment preferences look like:
Depending on the region, between 53% to 68% of payments for digital games are done through bank-based payment solutions or PayPal. That revenue is not insignificant, but it still means missing out on between 32% to 47% of payments.
So how exactly are those gamers paying if they’re not doing it with their credit card or PayPal account? Here is where alternative payment methods come into play. Direct debit, local digital wallets, carrier billing and prepaid cards dominate the “other” category of digital gaming transactions. In Asia, they account for almost half of all transactions.
Localizing pricing strategies
Using local payment methods itself does not guarantee revenue growth if the pricing strategy is not adjusted as well. Asking users in Asia and Europe to pay the same price for content doesn’t work: a gamer in Bangladesh does not have the same purchasing power as a gamer in Norway. By charging them both the same price for content, prices becomes too high for some and too low for others.
The steps to take when figuring out a local pricing strategy are:
- Consider the purchasing power parity: Use data that reflects the purchasing power of your potential user base, for example, the Big Mac Index
- Check out the competition: If any competing games are doing well in the same country, it’s possible that they have already done the pricing research on your behalf
- Ask payment service providers: Payment processing companies usually know the payment behaviours for each market very well. For example, Fortumo’s data map gives a good overview of pricing trends with carrier billing
- Try selling smaller chunks of content: In addition to localized prices you can also simply break what you sell into smaller parts. For example, instead of selling a 1,000 Gold Coin package for $9.99, you can sell a $0.99 package of 1,00 Gold Coins to make the pricing more affordable to the local gamers
How does carrier billing help?
Carrier billing lets game developers collect payments from any mobile phone user by charging purchases to their phone bill. It’s available to every mobile phone owner across 80+ countries and provides the simplest checkout experience out of any online payment method:
If you’re a game developer interested in learning more about carrier billing, download the e-book below and find out how carrier billing works, why other game developers are using it and how to get started.