With research firms expecting the global market for social gaming to reach $4 billion or more by 2015, and the United States projected to lead that market with well over $1 billion in sales, tapping into the "freemium" side of this market represents a virtual goldmine for game developers and payment service providers.
The term freemium refers to a combination of free and paid premium services for virtual goods, advanced features or functionality generally delivered digitally.
To capitalize on this growing trend, global payment service provider BlueSnap Inc. teamed with online social game developer Disruptor Beam Inc. to launch a seamless in-game purchase experience for players of Disruptor's Game of Thrones Ascent, a game based on the George R.R. Martin fantasy novel series and HBO network Game of Thrones program, now in its third season on the premium cable channel.
"BlueSnap allows for a completely integrated checkout experience, including in-game upgrade capabilities that maintain the integrity of the player experience, something we didn't see from other e-commerce providers," said Jon Radoff, founder and Chief Executive Officer of Disruptor Beam.
Initially released in open beta on Facebook in February 2013, then through the game hosting service Kongregate in April, and now on the Disruptorbeam.com platform, Game of Thrones Ascent has apparently caught on among fans of the popular television series. Since the beta launch, Disruptor Beam has tracked nearly 1 million installations of the game, which represents its first foray into an internally-funded and proprietary game.
For the estimated 600 million global online gamers, many without access to or preference for credit cards, alternative payment options have become a critical component in processing micro-transactions for an industry where payments reportedly range in increments of $5 to $10.
"The gamers are the guys who are really pushing the envelope on payment with alternative forms of payment besides credit cards," said Ralph Dangelmaier, Chief Executive Officer of BlueSnap.
"We offer about 90 different types of payments globally, so when you're in the game you can pay in your local currency." And BlueSnap offers 60 global currencies presented in 28 different languages, making it a versatile global checkout experience for online merchants and users.
For video game players, setup and access to accounts requires a password, with subsequent transactions processed securely via a one-click, buy-now function on the user's PC or mobile phone, the company said. "When you're in the middle of the game, you can buy gold or a sword, or whatever you need, and it's just part of the game," explained Dangelmaier. Its software provides in-depth reporting for tracking player purchases in real-time as well.
"Our average merchant sells about an $80 ticket to its shopper," Dangelmaier said, noting that online translation services, cable television programs in regional markets and other online content available for purchase are also trending right now.
That said, transaction fees for micro-transactions can be cost prohibitive in some instances. "It's very rare that we're not doing a transaction with some online merchant that's not asking for some micro-payment kind of pricing," Dangelmaier said. "You can't be giving up 50 or 60 cents on a transaction fee, plus a percentage. So we've come up with what I think is really fair pricing to promote these micro-transactions."
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