In July last year, Players of the popular online game League of Legends (LoL) were allowed by the United States, to be considered as professional athletes. This in turn spurred the International Olympic Committee to include LoL as an official Olympic sport! What has any of this got to do with payments? Quite a bit, it seems.
In previous posts I have discussed the utmost significance that online games and MMORPGs (Massively Multiplayer Online Role Playing Games) in particular hold, in the world of payments. League of Legends is not an MMORPG but a MOBA – Multiplayer Online Battle Arena. However as far as game economics and in-game payments are concerned, the cash shop operates in a very similar manner.
To emphasize this let me give a real life example:
The most recent MMORPG that i tried my hand in was Allods Online, a Space – Pirates styled adventure. They had a cash shop in-game which let you purchase items for currency known as ‘gPotatos’. These gPotatos could be obtained by paying real money via Debit Card, Credit Card, Game Card or Phone Recharge.
I have utilized a game item purchased via cash shop that renders me invisible, hence the translucent form. The guys in red were my enemies (yeah i got pummeled after taking the screenshot). How did i buy the cash shop item? Simple. Inside the game itself there is an option known as ‘STORE’. Here a number of payment methods are displayed including Credit, Debit and PayPal. Well, I paid $10 through my VISA credit card and within half an hour, the gPotatos had been added to my account.
This combination of an in-game cash shop linked directly to a users preferred payment method in the game itself has very serious implications. I have seen some of my friends spends thousands to tens of thousands of dollars over the course of a year or two (time flies when you play an MMO) on a single game, without really noticing. Around 4 Million gamers play Allods Online, and even if a fraction of them top-up their gPots for $10 every month…well that is a decent amount of money. This however, is a farcry from League of Legends which is reported to have a daily user base of 27 Million and Monthly user base of 67 Million! That is some serious cash flow right there , wouldn’t you agree? League of Legends employs a similar method as gPotato – with a different currency known as Riot Points.
Due to the games vast popularity, a number of payment methods have popped up for League of Legends:
Credit Card: Discover, Master Card, and Visa are accepted on all servers. American Express is only accepted on the NA server.
PayPal: Riot Points (the game currency) can be purchased by the user via online money transfer using PayPal. The user’s PayPal account will be required to be financially funded with a bank account, credit card or debit account. With a PayPal account, users will be able to purchase stuff without having to enter personal credit information every time they wish to make a purchase.
Paysafe Card: This is a safe and easy way for users to purchase Riot Points onto their League of Legends account without requiring a bank account or credit card. Currently, Paysafe Cards are available from 300,000 sales outlets worldwide.
Mobile Payment, Boku and Internet+: ‘Mobile Payment is an easy-to-use payment method wherein users can complete transactions by sending text messages’. All transactions go via BOKU, and the users will be charged through their phone.
Prepaid RP Cards: Prepaid RP Cards are a convenient way to purchase Riot Points without the requirement for a credit card or bank account. These cards are purchased at local stores and can be redeemed by entering the card’s pin code in LoL’s in-client store.
Cash and Gift Cards: Openbucks enables players who do not own credit cards or bank accounts to make online purchases with cash. You can do this by purchasing a gift card from one of the retailers associated to Openbucks. This gift card can be used in our store to purchase Riot Points to your own account.
The retailers currently associated with Openbucks include:
GlobalCollect had published a report on the MMORPG market in July 2013, highlighting payments and trends.The research is based on GlobalCollect’s extensive gaming transaction data. It also includes data from Newzoo, an international gaming market research firm. The data covers millions of transactions per quarter and represents more than 170 countries.
Some of their findings:
- MMO games will account for $14.9 Bn i.e 21.2%, of global gaming revenues in 2013.
- Free-to-play MMO games take 47% of all money spent on MMO games in the US, up from 39% in 2010.
- Free-to-play MMO games gross more revenues than Pay-to-play MMOs in Asian (51%), European (53%) and Emerging markets (59%).
- Free-to-play MMO revenues for 7 key EU countries totals $1.1Bn.
- Emerging Markets Russia, Brazil and Mexico spend $0.4bn. Korea and China combined spend $2.2bn on Free-to-play MMOs.
Mind you even though League of Legends is not an MMORPG or even and MMOG, the Payment mechanics, and the revenue model remains the same.