Gamescom 2023: The future of video game payments is here

Gamescom 2023 did not disappoint. Held in Cologne, Germany, the event saw industry luminaries offer new glimpses of much-anticipated titles, from Remedy’s long-awaited horror sequel Alan Wake 2, to Bethesda’s epic space opera Starfield.

Meanwhile, there were further glimpses of the future of the industry, with Web3 gaming a growing presence at the event. And we anticipate this will become even more significant when Gamescom 2024 rolls around.

We were thrilled to attend, offering our thoughts on the future of payments in video gaming – something we explored in our recent whitepaper, Taking payments to the next level for video games’ new era.

As we reflect on this year’s event, here’s a breakdown of some of the key trends developers, streamers and publishers should know about.

The metaverse and the blossoming of blockchain in gaming

The video game industry has never stood still for long. From entertainment streaming platforms seeking to become major players in the industry, to Apple’s Vision Pro possibly bringing augmented reality gaming to the mainstream, global forces are mounting to bring about the next great wave of change. And perhaps most significant is the arrival of the metaverse, and the development of blockchain technologies in gaming.

Many publishers are now looking to adapt their projects with the metaverse in mind, whether that’s having part of their games actually taking place in the metaverse, or looking at Web3 as a technology to offer NFT drops. This is where blockchain comes in – a foundational framework for the metaverse and the future of gaming.

There’s no doubting blockchain’s growing prominence in the industry. EVE Online studio CCP Games is making a blockchain-based game, for example, and major publishers like Ubisoft are actively exploring blockchain-gaming.

In terms of payments, blockchain’s smart contract system is particularly attractive because in using this a programme automatically executes a transaction and permanently documents the event or action on a digital ledger. The benefits of which are plentiful – offering secure and transparent in-game transactions, while enabling players to truly own their in-game assets, and promoting a more player-centric economy.

Gamers’ payment preferences are changing, in many ways

In a previous article, How to take video game payments to the next level, I outlined the importance of offering alternative payment methods like fiat on-ramp (and off-ramp), digital wallets and online cash to meet player expectations.

But now, the very dynamics of game payments have shifted. Gone are the days of every player popping in to their local video game store for a physical copy of the latest release. Driven by the success of games-as-a-service and free-to-play titles like Fortnite, different purchasing models are changing the way players interact with games, and make in-game transactions.

Here are the models developers and publishers must now consider:

• One-off purchase –  the traditional model of purchasing a title and playing all its content

• Free-to-play – supported by in-ad purchases or advertising revenue

• Play-to-earn –  cryptocurrency-backed games where players can earn coins

• Subscription – players pay for a service over a recurring period (typically monthly)

• Player-creator – players are rewarded by other players and publishers for creating content

To deliver these models in a way that’s efficient, secure, and friction-free, a robust payment solution, empowering gamers to pay exactly the way they want, is key.

The challenges and opportunities of the future of video game payments

Gaming is becoming increasingly popular all around the world, and this global appeal means that streamers, developers and publishers must adapt, and meet the needs of consumers across many different markets.

In terms of payments, this means offering various currencies and payment methods, as well as meeting different regulations, ensuring that wherever consumers are, they can enjoy a friction-free experience.

Meanwhile, gaming platforms also need protection from fraudsters due to the high-value virtual assets and in-game items that can be stolen or traded.

Gamers also demand smooth payment experiences that complement game play and don’t impact their enjoyment of the game itself. Any friction in the payment process, such as multiple steps or slow load times, can lead to cart abandonment and a negative player experience.

Thankfully, the right payments partner can help developers, publishers and streamers overcome all these challenges. They can deliver a variety of payment methods that are customizable to regional preferences around the world to enhance user experience and increase conversion rates. The right solution can also provide secure payment processes to protect user data, and ensure a seamless experience, suitable for the bright future of video gaming.

And with Web3, blockchain, and other emerging technologies set to define the new era of an ever-changing industry, we can’t wait to see what Gamescom 2024 has in store for us.

If you want to learn more about video game payments, check out our latest whitepaper, Taking payments to the next level for video games’ new era.