Reaching God Mode at ChinaJoy: How Asia-Pacific Mobile Gaming Can Monetize Prepaid
The future looks bright for the gaming industry. Most recent reports prophesize it is poised for strong growth, with ASEAN servers leading the way.
However, there is one huge story mission gaming companies need to complete, and that’s how to monetize the prepaid subscriber base, as well as the unbanked population—which makes up the majority of ASEAN gaming world.
In the current patch, prepaid subscription dominates the Asia-Pacific servers and drains a significant source of revenue through subscribers’ churn rate.
To win this boss fight, gaming companies should look for ways to nurture relations with prepaid subscribers before they decide to part ways. This would allow them to monetize untapped market opportunities and evolve to high-level market leaders.
Let’s see how.
The level design of Asia-Pacific gaming
The current version of Asia-Pacific servers should come as no surprise. Over the last couple of years, Asia-Pacific has dominated the meta, with China at the forefront. According to Newzoo’s 2019 Global Games Market Report, China is expected to record $36,540M in gaming revenues this year alone.
This is encouraging news after last year’s gaming licenses freeze that hit Chinese companies. The national gaming industry is recovering from the blow and remains a strong contender to the top of the board for the gaming market worldwide.
ASEAN markets are close behind. Thailand, Singapore, Vietnam, Indonesia, Malaysia, and the Philippines together boast around 10.8 million connected gamers and are estimated to generate $1bn game revenues. According to industry reports, the gaming market in these countries has grown 22.9% over the last few years.
Another great news is that gaming is branching out in various directions, using new technologies and formats to deliver content to users. Traditional games, PC, and console are starting to give way to mobile gaming, esports, and VR, which both globally and in the Asia-Pacific region are overtaking.
In 2019 alone, mobile gaming is expected to produce revenues of $68.5 billion worldwide, and increase even further to $95.4 bn in 2022.
Looking at the SEA region, the number of PC online and mobile gamers is projected to reach over 400 million over the next two years. Markets such as Thailand, Indonesia, and Singapore are becoming hot spots for gaming market entrants, with numerous opportunities to monetize and find revenue streams in the market that’s booming.
And yet, there is a major “boss” that gaming companies need to overcome to reap the full market potential: the fact that most of its consumers are prepaid subscribers.
Nerf of prepaid subscribers
Developing Asia-Pacific markets are still fueled by prepaid services. A report by Juvo and Strategy Analytics showed that prepaid services account for 82% of connections and 50% of revenue in developing Asia-Pacific markets. Revenues from prepaid customers are a stable source of income, with EBITDA margins from prepaid ranging from around 40% to 55%.
Despite these good results, telcos could improve their monetization efforts in this segment of subscribers.
The fact is that while prepaid makes a significant contribution to telecoms' earnings, they are still a significant source of costs. According to the same report, 90% of subscriber acquisition cost expenditure focused on replacing churning subscribers and only 10% on subscription and revenue growth.
Let’s tie this back to the mobile gaming industry.
Prepaid subscribers are the majority of mobile gamers in Asia’s developing markets. And these markets are coincidentally among the fastest growing gaming markets.
To change this nerf, mobile gaming companies need to rethink their build and the way they deliver content to users. And so do mobile operators, whose data packages are how the content is served to gamers. The first step is to reduce churn.
Prepaid customers in emerging markets consistently churn because they are constantly told ‘no’. No you’re out of airtime. No you don’t have enough money. We have to start with ‘yes’.” —Steve Polsky, CEO of Juvo.
Reducing prepaid subscribers’ churn needs to start with changing the relationship with prepaid customers.
Most customers need to receive personalized services for a long-term relationship to last.
This especially holds true for prepaid subscribers, where the “no strings attached” logic means customers are likely to leave unless they feel delighted.
And the way to make them feel delighted is through convenient, wholesome, and personalized content.
So what gaming companies need to do to leverage each interaction with gamers is to find ways to give more benefits to their prepaid base. The answer lies in APIs.
APIs take monetization to the bonus level
With APIs, game developers can unlock the ultimate ability of a connected experience to players.
And even the most casual of players pay a lot of attention to how well connected and wholesome the game is, let alone the so-called “connected enthusiasts”, ie players who play games daily and make hefty purchases.
Coincidentally, according to a 2017 survey by Google, which canvassed 22,000 mobile gamers in eight countries, most of these connected enthusiasts live in Taiwan, South Korea, and Japan.
The truth is that APIs would allow you to essentially change the game.
Instead of a game with broken user flow, where the ability to make in-game purchases was limited by the prepaid package, you could offer your prepaid players a smooth, immersive experience.
Plus, APIs would allow you to monetize unbanked players, a significant market portion in the ASEAN region. According to an EY report, over half of the adult ASEAN population is unbanked. And your first quest is to overcome this challenge.
Due to their flexibility, APIs could remove this need for upfront payment as part of the prepaid subscription package.
Instead, you could get a telco-based payment platform that doesn’t require bank accounts, credit cards or postpaid subscription.
Imagine if the player, a prepaid operator subscriber, wasn’t limited by a lack of air time or credit.
If you provided them with a microloan during the game, allowed them to make a much-needed potion purchase to beat the boss and get to the next level, and then charge afterward, the user would be more likely to hang around, rather than abandon your game because it is restricted. This would help increase customer delight and in turn reduce churn.
This is just one of many underutilized methods for game developers to monetize their assets and ensure customer loyalty along the way. Here are some more.
Apigate expansion pack
Apigate knows what it takes for game developers to expand into the 1.5 billion users strong ASEAN market, worth over $1 bln.
Our functionalities allow you to connect with users in a way that you can support their preferred payment methods and deliver the best of your content.
Apigate GotGame: Catch ‘Em All
Through Apigate GotGame, game developers can easily connect to over 1 billion players who live in the SEA region, through single API integration.
Apigate GotGame is a comprehensive partnership that brings together game developers and operators. As a game developer, you could be targeting and acquiring a target audience for your games through exclusive insights from thousands of MNOs we have partnered with.
The idea behind ApigateGotGame is to help game developers deliver flexibility to players when it comes to payment methods.
Focused on the ASEAN market, GotGame enables you to allow players to make in-game purchases through a variety of payment methods, including Direct Carrier Billing, vouchers, or e-wallets.
Keep the game running: Apigate Stretch
Apigate Stretch helps game developers deliver game continuity to prepaid players.
Let’s say a player runs out of credit while nearly completing that one level they’ve been trying for days.
With ApigateStretch enabled, Apigate would provide a real-time microloan to bridge the gap of insufficient funds and ensure uninterrupted game consumption.
Without interruption, Apigate would allow the player to finish the quest, notifying them about credit “re-filling” through a popup.
The idea behind Stretch is to take the pressure off you as a vendor.
Powered by machine learning and based on internal checks and reports, Stretch would assign a credit score to each mobile number depending on a number of factors.
To provide seamless gaming experience to your prepaid customers. In turn, you will monetize a massive unbanked portion of SEA gamers who make up the majority of the mobile gaming industry in the region.
Apigate at ChinaJoy ’19
From August 2–5 2019, Shanghai will become the epicenter of China’s digital entertainment industry as experts and fans get together to showcase industry novelties at the China Digital Entertainment Expo and Conference.
This year, the event will be traditionally focused on online, console, and web games, but will also focus on topics such as designer toys, ACG novels, e-sports, live broadcasting, female player market, IP, and creation of entertainment ecosystems through partnerships.
The Apigate team will attend the conference to connect with gaming industry players and talk about ways our platform can help game developers reach 1.5 billion users in ASEAN, the fastest growing gaming market in the world.
By connecting to Apigate, you will get everything you need to tap into a gaming market worth over $1 billion and growing.
Want to learn more? Let’s talk at ChinaJoy.
Book a meeting and talk to our CEO, Zoran, our regional Growth Director, Logen, and our regional Growth Manager, Tom and see how our API platform can help you raise your game.