This is a VB Lab Insight article presented by Xsolla.
In a live fireside chat, Dean Takahashi, lead writer of GamesBeat, spoke with Chris Hewish, President and Interim CEO of Xsolla to discuss the growing direct-to-consumer trend, driven by changing regulations and an increasingly tight market – and how Xsolla’s new initiatives are aimed at helping developers seize new opportunities.
The EU’s Digital Markets Act was developed to ensure that companies competing in the online marketplace are treated fairly by the third-party platforms they rely on to engage with consumers.
“It’s empowering mobile companies to have direct relationships with their players, where they can not only get the game data on where the players are and how they’re playing within their game, but now they can get the data around the commerce and their behavior online,” he said.
Plus, he said, the Digital Markets Act, which goes into effect in March next year, lets mobile game developers expand their businesses beyond just a third-party platform, grow their user base and thrive.
“There’s a lot of opportunity in front of us, and we’re just trying to make sure that we work with the best companies and provide the best technology and integrations for our partners to take advantage of all of that,” Hewish added.
Here’s a look at how Xsolla is helping developers keep pace with a rapidly evolving market.
The need for sophisticated parental controls
Late last year, Epic Games paid $520 million in fines in an FTC settlement after the game company was found in violation of the Children’s Online Privacy Protection Act (COPPA). The hefty fine was a bit of a wakeup call for many game companies, a stark reminder that parental controls are not a nice-to-have, but crucial, Hewish said.
“As we continue to help partners go direct-to-consumer, we realize that there’s a growing need to ensure that our partners are taking the proper approaches to privacy and ethical treatment of children when they’re going online with their games and their game commerce,” he explained. “About 71% of children under the age of 18 are playing video games, so it’s a large segment that people should be aware of and take proper precautions.”
To that end, Xsolla has partnered with Privacy Vaults Online, or PRIVO, to provide online privacy and safety solutions and support. The company has integrated these tools into its product suite for partners to ensure they’re protecting children, as well as the integrity of their own company.
Bringing actionable data to web shops
Xsolla also recently partnered with AppsFlyer to bring cross-platform data analytics and insights to web shop owners, to level up their marketing and engagement strategies. The game industry continues to be led by mobile revenue, much of it driven by online web shops. The AppsFlyer integration lets developers gather and analyze user behavior data as well as their interactions on the web and inside their games.
“It elevates things like measurement precision, enables user segmentation, and allows for deeper comprehension of our customer flow, behavior and engagement,” Hewish said. “What these web stores do is unlock a whole new market segment for people. It’s more important than ever, as this business grows online, to provide tools for our partners to be able to analyze that business and track it and optimize it.”
A growing global footprint
Japan is well known as a large mobile game market, and game companies in the area make up a large part of Xsolla’s current and growing list of partners. To ensure they’re tapping into the market as it grows and better serve their customers there, the company has opened a new Tokyo location, staffed with local game industry professionals.
The impetus was “to best serve not only our existing customers who might be looking at Japan, but also to create more of a direct connection and authenticity and understanding of the local market for local partners that might be there and looking to either expand their businesses within Japan or expand outside Japan,” Hewish explained. “It’s part of our continued effort to get closer to our customers, whether it’s our partners or their players, and provide value that’s localized and understand the specific region.
As part of that, Xsolla is onboarding a number of local payment methods within Japan, such as digital wallets and options like AliPay and Line Pay, which will help increase business for companies in the area hoping to seize the market opportunity.
There are payment options like Line Pay and PayPay and RPay, AliPay. Everybody has Pay in their name. But there are all these cool payment options out there. We’re in the process of integrating with all of them to unlock the opportunities in Japan.
Integrating the payment methods is one thing, but as Hewish explained, Xsolla is looking to “help [developers] understand those markets so that they can approach them in a more respectful and efficient way,” he said. “Opening up an office there was important so that we were viewed as taking this seriously.”
Bringing new cryptocurrency on board
Xsolla has always taken a very cautious, methodical approach to integrating payment methods. With 700 payment methods already integrated into its payments app, including Bitcoin and others, a partnership with Crypto.com adds even more crytpocurrency options.
Crypto.com takes a different, more methodical approach that rejects hype and takes security and privacy seriously, Hewish said.
“It was important to do it right, even if it was going to be slower than some others, and make sure that when we introduce the variability of cryptocurrency into our system, we’re doing it in a way that protects our partners and protects our partnerships with other payment providers,” he explained. “It’s going to open up a whole other avenue of payment options for our partners and players that goes straight into our existing payment solution.”
It’s how the company is ensuring they’re ready for the next wave of web3 native feature sets and gameplay, he added. “We want to be prepared and have that offer in place so that as those companies come online, they have the ability to go direct-to-consumer, and we’re there to help them.”
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