No matter who loses in the next shift in gaming: telcos will win

No matter who loses in the next shift in gaming: telcos will win

Remember Zynga? The developer of Farmville was the hottest gaming company in the market back in 2012. Then, consumers decided to stop playing games on social networks and switched over to smartphones. Zynga was not able to adapt and by now, the company has lost 58% of its value.

The shift from web to mobile gaming was drastic. Some companies like Zynga lost the race, while others like King emerged and flourished. Now, there seem to be two major shifts coming at once that are about to rattle up the gaming industry. Both these shifts create an opportunity for telcos to win big.

First there’s the move from freemium to subscription-based gaming. Epic Games proved the viability of the business model with its battle pass system in Fortnite. Others have followed suit and many new gaming services launched can be described as the “Netflix of gaming”. Game companies of all sizes are adopting the model, from Google Play Pass and Apple Arcade to Utomik and Hatch.

There’s a few good reasons why subscription gaming is taking off:

  • Subscriptions provide a more predictable stream of revenue from larger audiences compared to one-time payments; the freemium model largely relies on “whales” for the majority of revenue

  • Subscriptions support player retention, and vice versa; people already subscribed to a game are more likely to play it and the more they play it, the more they want to retain access to it

  • Subscriptions may be better liked by consumers than microtransactions, since they do not have the risk of taking things to the extreme, as was recently the case with EA’s loot boxes

The second shift is also something taken over from the streaming industry: the streaming component itself. Instead of downloading games to devices, cloud gaming gives gamers the possibility to stream games instead. Microsoft with xCloud and Google with Stadia are the forerunners in this category.

What do these shifts mean for telcos?

Game development companies adopting the subscription business model means telcos are able to copy over their existing partnership models with streaming services to gaming. Gaming companies have long used carrier billing, but the bundling business model has so far not been compatible.

However, if gaming becomes subscription based, it fits perfectly with telcos providing their own services on a continous, recurring basis. This opens up similar opportunities for bundling games in exactly the same manner as has been done with streaming services. Our recent survey shows industry analysts agree.

As for cloud gaming, two things are certain: this approachs means consumer devices don’t need to be as powerful, while mobile data capabilities need to improve.

Lower technical requirements for smartphones mean cloud gaming will make gaming accessible to people with cheaper devices. This means the huge audience located in emerging markets will get access to games their phones were incapable of running in the past.

On the other hand, cloud gaming needs reliable mobile internet. Telcos who are deploying 5G capabilities will find cloud gaming companies to be attractive partners with whom to push mobile data activations and data consumption out to the consumers.

We don’t know who will be the Zynga of subscription-based cloud gaming, and who will emerge as the King (pun intended). But the shift seems to be towards a direction where the business model (recurring revenue) and the technical needs of cloud gaming strongly overlap with telco strategies, especially in emerging markets.

If you’re interested in learning more what benefits gaming companies and telcos gain from partnering up, check out our recent white paper. For more details on bundling, click here instead.

Carrier Billing: Strong Customer Authentication (SCA) exemptions and opportunities in Europe

Carrier Billing: Strong Customer Authentication (SCA) exemptions and opportunities in Europe

Digital content merchants operating in Europe will soon see their payment conversion drop. The reason for this is the recently launched Payment Services Directive 2 (PSD2), which requires online payments to be authorized with Strong Customer Authentication (SCA).

SCA requires all online transactions to be confirmed by consumers in Europe, adding an extra step into the checkout flow. During the payment, consumers need to provide two of the three following: knowledge, possession and inherence elements.

The good news? Carrier billing is exempt from these requirements.

Download our fact sheet and find out how carrier billing helps mitigate the negative impact on payment conversion.

Case study: how to triple a bundle offer’s user base in 3 months?

Case study: how to triple a bundle offer’s user base in 3 months

Telcos launch bundle partnerships with digital merchants because they want to acquire new users and upsell premium service packs to their existing customer base. Negotiation, integrating and launching the offer is only half of the work.

This case study from Western Europe shows how promotions by telcos can improve the results of the bundle deal by more than three times.

Download the case study below and find out how promoting the bundle offer by the telco led to a 65% better uptake and resulted in tripling of the user base with an active bundle in 3 months.

Publishers: get a free ticket to Digital Content Expo!

Publishers: get a free ticket to Digital Content Expo!

In the beginning of October, Digital Content Expo will bring together publishers in Berlin to find solutions for improving their content creation, distribution and monetization strategy.

Fortumo will be exhibiting at the event as well. PayRead is our telco-based mobile identity and payment solution for publishers, which helps increase subscription revenue and acquire users through telco partnerships.

If you are still deciding whether to attend, here's some good news: we’ll get you a free ticket to the event. Simply fill out the form and we’ll reach out to you with the ticket details.

If you already have a ticket, we hope to see you at our booth (Hall 21b, A.07-A). To set up a meeting during the event, get in touch.

Carrier billing in 2019: Asia market report

Carrier billing in 2019: Asia market report

This market report takes a look at the direct carrier billing landscape in Asia: Indonesia, Pakistan, the Philippines, Vietnam, Thailand, Myanmar, Malaysia, Taiwan, Cambodia and Singapore.

In the report below, we have profiled the digital ecosystem and demographics of each of the major Asian markets. We have additionally included internal data from Fortumo, sharing information on what carrier billing solutions look like in the country, as well as data on user spending behavior.

Here is the full list of data included for each of the ten countries profiled:

  • Demographics: population of the country, median age, localization requirements
  • Economy: GNI per capita, bank account access, debit and credit card ownership, taxation, currency exchange rate
  • Telecommunications: mobile phone and smartphone ownership, mobile broadband access, prepaid SIM market share, telco market shares, GSMA Mobile Connectivity Index Score, platforms used to access digital content
  • Marketing: Google Play cost-per-install (CPI) as compared to the US market
  • Merchant deployments: list of leading digital merchants partnered with telcos in the country for carrier billing or bundling (pictured also above)
  • Carrier billing data: monthly median revenue per user, transaction volume change, carrier billing popularity for digital content purchases, price point distribution, user spend distribution

Leave your contact details below and you’ll get access to the Asia market report immediately.

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