Los Angeles was the second stop for GamesBeat Engage presented by Xsolla, an intimate networking and collaborative event designed for the decision-makers, visionaries, and innovators shaping the future of games, entertainment, and tech. The evening featured insights from Xsolla, during two discussions on commerce strategies outside the platforms.
To kick off the event’s first conversation, “The monetization playbook: what’s working right now,” Chris Hewish, president, communications & strategy at Xsolla, joined GamesBeat’s own Dean Takahashi to break down some of the recent, significant shifts in the monetization landscape, compared to just a year ago.
Direct to consumer monetization unleashed
The Epic Games vs. Apple antitrust case was top of mind. The five-year battle ended in a victory for Epic, opening up the revenue floodgates for mobile game companies. Apple can no longer prevent developers from communicating directly with users, embedding direct payment links into mobile games, or imposing commissions on off-app purchases.
Hewish said the larger narrative, which is now picking up steam, is the movement toward a direct-to-consumer strategy.
“We are seeing now that the companies that are embracing direct connection with their players are benefiting greatly,” he said. “It has allowed companies to start connecting their entire player ecosystem. You can then control all of your own metrics and performance measurement tools to message your players, and leverage the full power of e-commerce, which results in not just better margins when you go direct, but also increased revenue.”
Launching a direct to consumer strategy
But tapping into that trend and launching a successful direct-to-consumer marketing and sales approach requires a great deal of back-end infrastructure and strategy, he added. It’s not as simple as bolting on a new revenue stream — it’s adding a new business arm. Right now is the best time to dive in.
“We are at a point in time where companies like ours and others are providing a lot of back-end infrastructure for you to be able to run the business, without having to build up big teams, having to build up new tech yourselves, or get into all the compliance and regulatory issues,” he said. “The same way that we’ve had great game engines for years, now we have really solid business engines to power the business of your game.”
New approaches to discovery and player acquisition
“It opens up some real opportunities for discovery when it comes to online advertising, social marketing, and influencer marketing,” Hewish said. “It’s not just about selling directly, but bringing your players together no matter where they are, and giving them additional value propositions beyond the game itself. If you view this as someone’s hobby that they enjoy and they engage with, there are so many more opportunities to interact with them than if you think of it as just a game.”
Owning the IP and player relationships
In the second conversation of the evening, “Owning the moment: IP, players and webshops,” GamesBeat’s Dean Takahashi welcomed Berkley Egenes, chief marketing and growth officer at Xsolla, and Artem Liubutov, vice president of product and monetization solutions at Xsolla. They talked about how important it is today that studios own their own IP and player relationships — and today that’s possible, now that those app store restrictions are gone.
“The ability to own the relationship with players means basically everything,” Liubutov said. “Going direct to the consumer is giving you the opportunity to get back the control over the fate of your game, of your business. From the metrics we have, and we have a lot of data, we see that direct to consumer, not only for mobile games but for PC games and anything else, has kept steadily growing year over year. Every major video game developer out there is doing direct to consumer.”
Launching a frictionless experience
Web shops actually reduce friction in the monetization experience for both players and studios. Players are more comfortable than ever with e-commerce, and today’s web shop solutions offer easy ways to connect the shop, the purchases, and the game on the back end. For developers, solutions like Xsolla’s can get a web shop up and running in five easy steps, adding a brand new revenue stream alongside the app store.
“It’s an extension of your game, not a replacement,” Egenes said. “It’s not an ‘or,’ it’s an ‘and.’ You’re going to monetize both in the app store and in the web shop. You put that together with game users who are used to e-commerce transactions: clicking on an item and making a purchase, just like you would do with Amazon or anything else like that. Now you can make that purchase with one click. You can even connect to Apple Pay to make that transaction happen.”
Adding payment types is another huge benefit of going direct to the consumer, because it opens up opportunities to expand globally. After all, credit cards, PayPal and even Apple Pay aren’t the main payment methods everywhere in the world, and many developers have left a lot of money on the table because they weren’t able to provide additional means for game fans to make purchases.
Niantic’s direct to consumer success
In the wake of the court ruling, Niantic, an Xsolla customer, has gone all in on its robust direct-to-consumer strategy. Now it’s a foundation of the company’s strategy: Every single marketing activity will mention the web shop, even if the content isn’t related to the web shop at all.
“The reason why they’ve invested that much attention into the direct to consumer part of their business is because it brings great results,” Liubutov said. “The changes in legislation that have happened, and the ability to link directly from the game to the web store, have significantly increased the already pretty overwhelming numbers. Across all of our partners, after just one week, the number of players using a web shop has increased by 40 percent.”
Egenes added that every mobile game, regardless of size and genre, should launch a web shop and embed it into its launch strategy.
“It’s a mechanism in your toolkit that you can use to create growth, create signup, create engagement,” he said. “Any brand that launches a go-to-market, it should be part of that go to market strategy up front. It’s not, ‘Oh, I read about this, I should probably do it.’ Do it early, on the front end, and you’ll be successful.”
Stay tuned for more details on the next GB Engage event coming up in Seattle!
