Game development is an exercise in creativity, patience, and understanding. But unfortunately, those skills in and of themselves don’t keep the lights turned on or pay your mortgage. Game
development – if only to earn the flexibility and freedom to build more games the way YOU want to do it – is just as much about building something that people want to give you money to
play (ad model excluded). So after countless hours of development and months of tweaks, bug fixes and refinement, it’s time to get paid. All your elbow grease and slick promotion results
in an awesome online game and all that’s left to do is to sit back and collect the ‘duckets in your buckets’ for all that hard work. There are a many different tools and services
that allow you to integrate credit card and PayPal payments into your site so people can purchase premium membership or top up virtual currency credits. But have you considered mobile payments? If
not, you should.
Mobile payments allow players of your online game to use their mobile phone account as an alternative to credit cards or online payment services to “pay to play”. Simply using their
mobile phone number as their payment account number, charges from you will appear directly on their mobile phone bill and the purchase can be fulfilled in real-time.
When you consider that there are nearly as many people with a mobile phone numbers as there are people who have credit cards all over the world, it makes sense to offer a mobile payment option to
your gamers. With the relevance of a mobile phone number and simplicity of such a transaction, many consumers of online games and services prefer using mobile payments over alternatives. That said,
while mobile payments are simple, secure, and immediate, they are very different than credit card payments. So what do you need to know to make them work for you and your gamers? Here are the top six
things you need to consider.
1. User Experience
Online games, particularly social network apps and MMORPGs, have a point during play that requires more credits or adding more virtual currency to continue (or at least to continue without waiting
for a day to make your next move). Consider this. In the heat of the battle how much time are you willing to let users take to disrupt their play? You want to monetize a gamers willingness to make a
. Credit card payments typically require moving the user to a different portal (even if it’s skinned to look like your website) where the gamer not only enters a name and
credit card number, but also billing address, expiration date and security code. Then they are presented with an “are you sure” moment to confirm the transaction. S-L-O-W. While more
streamlined, online payment services like PayPal
also take people away from your website to login with an ID and password
that they may not know, enter information and await confirmation. Yikes. Mobile payment options
are fast and far simpler for the gamer; capturing the
purchase impulse immediately and without departure from the application itself. They just enter their phone number. A unique confirmation code is then sent via text message to ensure a secure
transaction. The whole process takes seconds, and your users, depending on the mobile payment service you choose to use, allows for instant fulfillment of the purchase without the player ever losing
contact with the game. In addition to the boosted conversion rates via mobile payment, consider how many gamers will think twice about upping their ante when transferred outside of your game
experience and required to find a credit card or login to another online payment service - - if they even have one.
2. Conversion Rates
Because there are nearly as many people with mobile phones as have credit cards, and because it’s easier to pay by mobile than to pay by credit card, you will undoubtedly find more people can
and will pay by mobile than other payment options you offer. In fact, Mobile First
customers have found as many as 10 times of the users willing to pay will
complete the transaction using their mobile phone rather than a credit card. That’s as much as 1,000 percent more people paying by mobile!
3. Mobile Carrier Regulations
Carriers and mobile operators are not credit banks, and they don’t want to see phone bills become credit card statements. To protect themselves, carriers around the world have imposed pretty
conservative guidelines on what can be paid for using mobile payments. Fortunately for game developers, most of what you create is able to be paid for using mobile payment; however, it should be
noted that – at least for now – carriers accept mobile payment transactions only for digital goods
. A digital good includes virtual currencies and products, in-game
transactions and subscriptions, miscellaneous online goods and services, as well as items you can install on a phone, such as mobile games or ringtones. Excluded from this multi-billion dollar
virtual goods market are gambling and adult content. Over time, these rules are likely to lighten up to include more commerce over mobile.
4. Transaction Fees and Other Costs
As I mentioned before, mobile operators are not credit banks, they’re phone companies. They allow their subscribers to purchase mobile goods as an added convenience. But because of the higher
conversion rates of mobile over credit cards, and because they do control this ecosystem, carriers impose a higher fee on merchants than credit card companies or online payment services do. Where
credit card companies charge 1 - 2 percent, mobile operators can charge as much as 35 percent. And yes, that comes out of your bottom line. But as mentioned before, the conversion rate is ten times
greater, so what you may lose in margin you’ll more than make up in pure volume. Based on Mobile First data, even with the higher carrier transaction fees, you still stand to increase your
bottom line revenue by 600 percent by offering a mobile payment option.
The amount of the transaction fee and your resulting net payout will vary – potentially by large amounts – by mobile payment provider. Be sure to compare the net transaction fee,
factoring in both the carrier withholding and the mobile payment provider transaction fee. You’ll find that the combination of these two numbers may reveal some hidden fees or hopefully an
opportunity to improve your margins. When you’re talking about boosting your bottom line by 200 basis points or more, that can represent a significant win. Also be wary of monthly fees or setup
charges. The majority of mobile payment providers do not charge setup or monthly fees. That’s good news for you because it means there is really no tangible barrier to entry for you to offer
mobile payment options to your game players.
Where will you develop your audience? It doesn’t matter (much). Mobile payments have grown to become a widely accepted payment method for more than 2 billion mobile phone subscribers all over
the world. Because we’re talking about digital goods and the Internet, adding a mobile payment option to your game instantly creates a truly global payment solution in relatively short order.
Knowing what countries your consumers are located in – or carpet bombing every possible market – is all it takes.
You’re a game developer, so adding complex code shouldn’t be a problem. But integrating a mobile payment solution shouldn’t be complex either. Many mobile payment providers utilize
a payment widget which is integrated simply by adding a couple lines (or less) of HTML code to your website or game. Every merchant of different digital goods and services are, well, different.
It’s important to find a mobile payment provider that can accommodate your needs without custom integration. Do note that reliable mobile payment providers will have to evaluate your site to
make sure you’re adhering to mobile operator requirements for digital goods and acceptable content; however, short of gambling and adult entertainment it’s likely that you’re a
qualified merchant. All this being said, you should be up and running with mobile payments in as little as a day and not more than a week.
We’re not advocating for the replacement of credit cards or PayPal
as direct payment methods, but rather are suggesting that you consider mobile as another necessary payment alternative. With these six things in mind, all that’s standing between your game
today and your game MAKING MORE MONEY is the easy path to accepting mobile payments. So hit the road, go mobile, and get paid.
If you are already accepting direct payments in your games and want to get started offering mobile payments today visit Mobile First. You can expect
implementation to take one or two days to fully complete and test. For other resources that aggregate multiple direct and indirect payment methods, including mobile, check out some of the
“one-stop shops” like OfferPal, Offerwall by Boomerang, and Viximo.
If you have any questions along the way, I’m happy to answer them. Just drop me a line at AskKevin@mobilefirst.com.
About the author: Kevin Spector, Chief Executive Officer, Mobile First
With an extensive background in mobile content that spans both the consumer and carrier ends of the value chain, Kevin Spector understands how to unlock the commerce potential of the mobile phone. As
CEO of Mobile First, Kevin is leading the team that brought to market an infinitely scalable mobile billing and payment platform that unites merchants with consumers all over the world. Kevin’s
vision is to help harness the international market potential merchant’s can derive from mobile billing, establish mobile as a ubiquitous payment mechanism, and to deliver consumers a highly
convenient and secure payment option. Kevin joined Mobile First in 2008 from Funmobile, a leading International direct-to-consumer mobile content provider. As Funmobile’s vice president of
business development, Kevin built industry relationships and directed the development of the company’s transaction processing systems. Before Funmobile, Kevin worked in client management at
m-Qube through that company’s $250 million sale to VeriSign. Prior to VeriSign he spent five years in strategic business development roles at early-stage interactive marketing firms. In
addition to his strong mobile and online background, Kevin has a solid foundation in finance and held investment positions at Merrill Lynch and Fidelity Investments. Kevin graduated from Washington
University in St. Louis with a Bachelor of Arts in Economics.