Paytech Solutions - Payments solutions for the Gaming Industry

Executive Summary

The gaming industry is experiencing rapid growth, with a surge in indie game developers,
publishers, and distributors entering the market. Additionally, legal shifts in regions like the EU
are favouring alternative marketplaces, enabling game developers and publishers to retain a
larger share of their revenue. As developers seek to break free from the monopolies of App Store
and Google Play Store, there is a growing demand for seamless and secure in-game payment
solutions. This creates a significant opportunity to introduce a white-labelled payment solution
specifically tailored for the gaming industry. This solution will address the unique needs of game
developers by providing comprehensive tools for managing in-app purchases (IAPs),
subscriptions, and various payment methods, including digital wallets and cryptocurrencies.

Introduction

The gaming ecosystem is evolving, with players seeking more personalised and engaging
experiences. Game developers are tasked with not only creating compelling content but also
ensuring that the monetization and payment processes are smooth, secure, and user-friendly.
The introduction of a white-labelled payments solution for the gaming industry aims to address
these challenges by offering a comprehensive platform that integrates seamlessly with existing
gaming ecosystems, enhances user experience, and provides developers with robust tools to
manage their monetization strategies effectively.

Market Analysis

● Market Distribution/Segments

– In gaming industry there are primarily 4 stakeholders:

● Gamers: A person who plays video games or participates in role-playing video

games.

● Developers(studios): They create the games and are often integrated into or
acquired by publishers

● Publishers: They fund the development of multiple games and work to ensure
financial returns.

● Distributors: They own the marketplace between developers and consumers

and have led the shift to digital and cloud distribution.

– Gaming Industry market share by device:

The online gaming industry is united in supporting three primary operating platforms :
mobile devices, video game consoles and personal computers (PCs)
– Gamer Segments

● Hyper-casual: These gamers play short, snackable and instantly playable

games (like Candy Crush), usually in very brief sessions of play.

● Casual: They play games designed for mass audiences (likeSolitaire) with
short,frequent sessions of play.

● Midcore: They play more accessible games (like Call of Duty) that are easier to
learn but difficult to master.

● Hardcore: These gamers play immersive, detailed games (like World of

Warcraft) usually over long play sessions.

– Revenue models in gaming

There are multiple revenue models in online gaming. One such revenue model is
in-game micro-transactions, which has become a core driver of transaction volume
across platforms. Although there is overlap among them, gaming revenue models can
generally be codified as follows:

● Buy-to-play : The gamer buys the game and can play indefinitely. However, the
game continues to be supported by the developer or publisher (e.g., providing
downloadable content), which the gamer may need to pay to access.

● Free-to-play: The gamer does not need to purchase the title to play, though
access to some features and content may require a subscription or
micro-transactions.

● Freemium Games: that are free to start but are limited in terms of how far the
gamer can progress before they must purchase the game.

● Subscription: The game is typically free-to-play to entice new gamers – but they
must pay a regular subscription to maintain access to all parts of a game.

● Ad-supported: Games are typically free-to-play, but the developer or publisher

earns revenue from advertisements that the gamer needs to watch periodically to
continue playing.

● Play-to-earn: Games that typically incorporate blockchain elements such as

NFTs. Gamers are incentivized to use NFTs to improve their value or to create
new NFTs. Gamers may need to pay an up-front fee to participate but are paid for
their contribution to new and/or upgraded
– How payments fit into gaming

– Region wise gaming market share

 – Age/Gender Distribution

● Current Market Trends

– Market size of mobile gaming is going to increase

With 5.44 billion people—or about 67.1% of the global population—now online and
smartphone ownership rapidly increasing in emerging economies, the mobile gaming
market is expanding at an unprecedented rate. Countries like Brazil, Indonesia, and India
are quickly becoming some of the largest smartphone markets globally. India's
smartphone market, for example, is outpacing the US, with 659 million Indians now
owning smartphones compared to 276 million Americans.

This surge in smartphone accessibility is transforming the mobile gaming industry, turning
each new smartphone user into a potential gamer. This trend is especially significant in
developing regions where smartphones often serve as the primary means of internet
access, making mobile gaming a widely popular form of entertainment.

– Rise of Microtransaction In-game purchases

The largest revenue driver in gaming by far is In-app purchases or microtransactions.
These are around 75% of total revenue and driven largely by mobile gaming.
In-game purchases are characterised by their affordability, making them accessible to a
wide range of players.

The prevalence of in-game purchasing stems from the unique dynamics of the digital
economy. When smartphone apps began to gain popularity around 2010, game
developers faced a challenge: most apps available for download were free, leaving little
room to charge upfront fees. Even a small price tag of $0.99 could drastically reduce
downloads. To overcome this, developers adopted a new monetization strategy: offering
the game for free while selling digital items—such as weapons, abilities, costumes—or
additional gameplay access. This approach led to a surge in mobile gaming revenues,
with some games designed entirely around this revenue model. For instance, Fortnite, an
online multiplayer battle game, is free-to-play yet generates billions of dollars annually
from in-game purchases. This model has even expanded beyond free-to-play games,
with paid games now offering a wide array of digital add-ons.

– Apple forced to change App Store Policies

On January 16th, 2024, the US Supreme Court decided not to hear appeals in the
prolonged Apple vs. Epic case, effectively upholding the ruling that Apple's anti-steering
policies—which prohibited apps from informing users about or linking to alternative
payment methods like web stores—violated competition law.

In response, on January 17th, Apple updated its App Store Review policies, replacing the
anti-steering rule with a new "link-out" policy. This new policy allows apps to include links
to external payment options, but Apple imposes a 27% fee on any purchases made
through these links, only slightly less than the 30% fee that sparked the Epic vs. Apple
case. Additionally, developers must seek Apple's approval for using link-out options,
follow specific guidelines on how these links are presented, and include a disclaimer
screen before redirecting users to alternative payment providers. These updated rules
currently apply in the United States.

In the European Union, Apple faces a different regulatory landscape due to the Digital
Markets Act (DMA). On January 25th 2024 , Apple issued new policies to align with the
DMA, applicable only to EU users. The DMA offers broader implications than the US
ruling, presenting developers with two sets of terms:

1. Existing terms: Continue distributing apps exclusively through the App Store
and pay a 30% fee on in-app purchases (IAPs).
2. Alternative terms: Distribute apps via alternative app stores (sideloading), use
different payment providers, and link out to web stores with a reduced 10% or
17% fee on IAPs. Additionally, there is a "core technology fee" of €0.50 for each
install over 1 million, including updates and reinstalls, charged annually.

– Emerging alternative marketplaces, sideloading of apps, out-of-app sales

channels

Apple’s recent changes, such as the removal of anti-steering provisions, give you greater
flexibility to inform users about out-of-app sales channels. This shift can significantly
boost traffic to your web stores, which was previously a challenge for many developers.
As long as you’re not directly linking to your web store from the app, any purchases
made there aren’t subject to Apple’s fees, potentially saving you over 30% of that
revenue. Even just mentioning that your web shop offers cheaper items and discounts
can encourage your most engaged players to explore it, driving more sales outside the
app.

Sideloading was always a possibility in Android. For eg, In India sideloading of apps like
MPL, Dream11 is quite common. Sideloading is the installation of an application on a
mobile device without using the device's official application distribution method (eg.
Google Play store, Apple store, Samsung Galaxy store). Sideloading in Android is still
limited as the most preferred method for customers to discover apps is using Google
Play store only. Now after recent DMCA ruling in EU, this trend is expected to rise there
with more and more gaming publisher opting for alternative

Epic Games is planning to launch its own games marketplace for iOS platform (European
Union) and for Android Platform (worldwide) this year. It is supposed to include both the
titles of Epic games and also the games from other developers/publishers. A store fee of
12% for payments store process, and 0% on third party payments. AltStore, an
alternative app store, has launched its first batch of third-party iOS apps in the
European Union. The rollout comes a few months after the company launched an
updated version of its app marketplace in the EU. AltStore PAL arrived as a response to
the Digital Markets Act (DMA). In India, Fintech startup PhonePe launched Indus Store
for Android users which allows developers to integrate third party payment systems

– Increased focus of developers on cracking D2C game

Alternative and additional distribution channels are increasingly becoming a hot topic in
mobile gaming. These channels offer gaming companies substantial benefits, including
an extra revenue stream and more favourable profit margins. Direct-to-consumer (D2C)
brands can leverage their own platform to gather valuable data, personalise player
experiences, and build stronger relationships with their audience. Examples of effective
strategies include:

● Offering a discount for newsletter sign-ups with an email address.

● Providing a free gift for creating an account, which helps in tracking customer
actions across devices.
● Recommending personalised items based on browsing history, either through
email or directly on a webshop, to enhance conversion rates and improve
customer retention.
● Use email addresses of high-spending customers to create targeted audiences
on platforms like Meta and Google.

– Rise of Web3, NFT in gaming

The rise of Web3, blockchain technology, NFTs, and cryptocurrencies is dramatically

transforming the gaming industry, introducing innovative methods for players to engage,
trade, and earn within virtual environments.

● Web3 and blockchain technologies are revolutionising gaming by providing

decentralised, transparent systems that enable true ownership of digital assets.
Blockchain ensures that in-game items, currencies, and assets are secure,
verifiable, and transferable, moving away from traditional centralised models.

● NFTs (Non-Fungible Tokens) are a central element of this shift, allowing players
to own unique digital items—such as rare collectibles, characters, or virtual real
estate—that can be traded or sold. These NFTs provide real ownership and
create new revenue streams, enhancing player engagement and investment in
the gaming ecosystem.
 ● Cryptocurrencies complement this revolution by offering a means of exchange
and investment within games. Players can use cryptocurrencies to buy, sell, or
trade NFTs and other digital assets, or to earn rewards through gameplay. This
integration not only facilitates financial transactions but also supports the broader
economic infrastructure of blockchain-based gaming.

● Play-to-Earn (P2E) models are gaining traction, enabling players to earn

real-world value through their in-game activities. By accumulating and trading
NFTs or cryptocurrencies, players can generate income while actively
participating in the game. This model provides financial incentives and fosters a
more engaged and invested community.

Overall, the convergence of Web3, blockchain, NFTs, and cryptocurrencies is creating a

more immersive, economically viable, and interactive gaming experience. Players benefit
from greater control over their assets, new earning opportunities, and innovative ways to
interact with and invest in virtual worlds.

– Buy Now Pay Later (BNPL)

The number of BNPL users is increasing worldwide. In the US no of users are expected
to reach 82.1 million this year, and will exceed 100 million in 2025. Gen Z is the
generation that uses BNPL the most and adoption rates are expected to increase from
36.8% in 2021 to 47.4% in 2025 (US Data).

– Indie Game Growth

So far, 2024 is witnessing an unparalleled surge in the popularity of indie games, marking
a distinctive shift from the long-standing dominance of AAA titles. Recent successes
include Palworld with a $6.75 million budget – surpassing 25 million units sold. This trend
continues the legacy of highly successful indie titles such as Minecraft, Stardew Valley,
Among Us, Fall Guys, and Valheim. Indie game development has resulted in the
development of various game genres, each with its unique gameplay mechanics and
artistic styles. The top genres for studios below 50 people are action, adventure, and
RPG games.

Despite typically having lower graphical fidelity and complexity compared to AAA titles,
indie games are successfully delivering great player experiences, with average Steam
ratings for indie games at 72% nearly matching those of AAA games (74%)

Indie gamers are drawn to experiences that transcend reality. About 35% of indie gamers
play to engage in activities they cannot do in real life, compared to 23% of other gamers.
Indie gamers are also 80% likely to play for the opportunity to interact with gamers
globally, highlighting their preference for a connected, community-oriented gaming
experience.More than 36% of indie gamers look for an emotional connection to a story, a
sentiment that is notably higher than the 18% of gamers who play other major genres.
These trends indicate the Indie game market is only going to grow bigger and bigger in
the long term.
 – Influencers

The value of the global influencer market has tripled since 2019, reaching $21.1 billion in
2023. Marketers are continuing to invest in collaborations with prominent social media
figures to appeal to the millions online browsing social media for entertainment, ideas,
and recommendations. People trust influencers for their knowledge, transparency, and
authenticity. With the influencer industry poised to grow even stronger over the next few
years, it’s worth investigating how influencers can precisely target gamers and how to
create lasting partnerships with the right creators.

● Challenges faced by Game Publishers/Developers

– Supporting Local/Diverse payment preferences:

● Challenge: Different regions have varying preferred payment methods. For

example, while credit cards might be popular in North America, mobile wallets,
bank transfers, or cash-based systems might dominate in other parts of the
world, such as Southeast Asia, Latin America, or Africa. Supporting local
payments is a significant challenge for gaming companies, particularly as they
expand into global markets with diverse payment preferences and systems. Cart
Abandonment increases if local payment methods are not offered.

● Impact: Gaming companies need to integrate multiple payment options to cater

to local preferences, which increases the complexity of payment systems and can
require partnerships with local payment processors. Integrating local payment
systems into a game’s infrastructure is often complex and time-consuming. Each
payment method may have its own technical requirements, APIs, and compliance
standards.
– Regulatory and Compliance Issues:

● Challenge: Local payment systems are subject to regional regulations, which

can vary significantly across borders. This includes compliance with local
financial laws, anti-money laundering regulations, and data protection standards.

● Impact: Ensuring compliance with these regulations is not only essential to avoid
legal issues but can also be costly and complicated, especially for smaller
gaming companies lacking extensive legal resources.

– Currency Conversion and Exchange Rates:

● Challenge: When supporting local payments, gaming companies must handle

multiple currencies and exchange rates. Fluctuations in currency values can
affect pricing, profit margins, and user experience.

● Impact: Companies need to implement reliable currency conversion mechanisms

and decide whether to absorb exchange rate costs or pass them on to players,
which can affect competitiveness in certain markets.

– Localization and User Experience:

● Challenge: Providing a seamless user experience requires more than just

offering local payment options; it also involves localising the entire payment
process, including language, customer support, and culturally appropriate design.

● Impact: Failure to properly localise can lead to user frustration, decreased trust,
and higher abandonment rates during the payment process.

– Risk of Fraud and Chargebacks:

● Challenge: Supporting local payments can increase exposure to region-specific

fraud risks. Some local payment methods might have higher rates of
chargebacks or be more susceptible to fraudulent activities.

● Impact: Gaming companies must implement robust fraud detection and

prevention measures tailored to each region, which can increase operational
costs and require specialised knowledge.

– IAP Fees

Game Developers/Publishers pay up to 30% commission to distribution channels like

Google Play and App Store. This is applicable to both in-app purchases and subscri-
ptions. For many game publishers, particularly smaller studios and indie developers, this
30% commission represents a significant portion of their revenue. With thin profit
margins, these fees can make it difficult to sustain development costs or reinvest in new
projects. To compensate for the high commissions, publishers might feel pressured to
raise prices on in-game items, which can deter players and negatively impact user
experience and sales.

– Limited access to verified gamers data

 Many of the D2C strategies aren’t possible in-app due to Apple and Google’s guidelines,
which restrict the use of collected email addresses for spam or unsolicited promotions.
Additionally, Apple allows for anonymity in account creation, preventing developers from
collecting emails. This limits the ability of developers to create targeted audiences and
send promotional emails, personalised loyalty programs and discounts.

● Competitive Landscape and Existing Solutions

– Major players who provide payment solutions :

● Stripe
● Paypal
● Braintree
● Adyen
● Skrill
● Authorize.net
● 2checkout
● Square

– Rise of players targeting gaming industry specifically:

● Xsolla
● Stash

● Existing gaps in Market (Scope of Differentiation)

The gaming industry, despite its massive growth, presents several untapped
opportunities for innovative payment solution providers.

– Niche Focus on Gamers:

While generic payment solutions exist, there's a dearth of platforms specifically

tailored to the unique needs of gamers. This includes understanding gaming
economics, payment preferences, and the psychology of in-app purchases (IAPs).

– Overlooked Indie Developers:

Indie game developers often face challenges in accessing robust payment solutions.
Many existing platforms are designed with larger game studios in mind, leaving a gap
for platforms that cater to the specific requirements of indie developers. Indie
developers have less resources. Compliance requirements, handling multiple
localised payment methods, in-app purchase personalise, in-app catalogue
management etc. are too much of a burden for them.

– Limited Personalization and Rewards:

Current solutions often lack sophisticated personalization features that can maximise
IAP revenue. High-spending gamers (whales) are particularly underserved in terms
 of exclusive rewards and recognition. Identifying and nurturing these valuable
customers is crucial.

– Inefficient Gamer Experience:

Gamers frequently grapple with managing multiple in-app purchases, subscriptions,

and payment methods across different games. A consolidated platform that simplifies
this process is in high demand.

– Emerging Competition:

The rise of alternative app stores presents opportunities to innovative payment

solutions that can adapt to this evolving landscape can gain a competitive edge. For
example, in the EU, Epic games will launch its own app store. Game developers who
on-board their apps on these platforms will be looking for payment solutions that can
help them save commission along with ensuring great checkout.in-app purchase
experience.

Product Positioning/USP

● Positioning/USP

Positioned as the go-to Merchant of Record for the indie game market in the USA,
the gaming payments solution will offer localised payment methods to meet the
diverse needs of gamers and also facilitate IAP personalisation.

Second phase of this will include foray into the EU starting with France and Germany
(highest revenue in EU) and then to further countries/regions.

Later phase will include the launch of white-labelled wallet solution for distributors
and gaming marketplaces. This wallet will enable cross-game operability within the
distributor ecosystem.

● Justifications of some other points related to product positioning/USP

– Why initial focus on Indie Developers:

● Rising Indie Market : Indie games have emerged as a focal point of interest
for the gaming community over the past few years, with the percentage of PC
and console gamers playing indie games in the US increasing from 13% in
2021 to 18% today. This market is going to rise as indie developers are able
to better tap into gaming audiences who want to be more emotionally
connected with the games.

● Indie developers desperately in need of gaming commerce solutions :

Indie developers often have limited resources, time, and budget to
successfully bring their games to market. This often makes their games part
of the 43% that are killed in development before they launch. Finding the right
 tools that will alleviate some of these challenges and streamline the game
development process is essential to accelerating time to market.

● Could become product evangelists : By providing a tailored solution, you

can become their preferred partner. Satisfied indie developers can become
powerful advocates for your platform. Indie games developers may look for an
exit through acquisition by bigger publishers/studios. This could provide a
unique way of reaching AAA gaming companies in future.

● Rapid Feedback loop and Flexibility : MVP and initial phases collaboration
with game developers is crucial to get valuable feedback, insights and
understand opportunities to pivot if required.Indie developers are often more
receptive to new tools and technologies, providing quicker feedback for
product iteration. They can adapt to changes in the platform more easily than
larger, established studios.

● Low CAC and High conversion : Acquiring indie developers is generally

less expensive compared to larger studios (Low CAC). Indie developers are
often more open to trying new solutions (Higher conversion rate)

● Proof of concept : Success with indie developers can serve as a strong

proof of concept for attracting larger game studios. A solid foundation with
indie developers can be leveraged for expansion into other market segments.

– The Role of Merchant of Record (MOR):

A merchant of record (MoR) is a third-party service provider that handles payment

processing and financial transactions for a business. MoRs can also be called
payment facilitators (PayFacs). They can take on many responsibilities, including:

● Payment processing : MoRs can establish merchant accounts, manage

relationships with payment providers and acquiring banks, and handle the
underwriting process.

● Compliance : MoRs can ensure compliance with local and international

financial regulations, such as anti-money laundering (AML) and know your
customer (KYC) requirements.

● Tax collection : MoRs can collect and remit sales taxes, VAT, and other
applicable taxes.

● Fraud prevention : MoRs can detect and prevent fraudulent transactions,

protecting both the business and its customers.

● Legal liability: MoRs assume legal liability for the transactions processed,
meaning they are responsible for disputes, fraud, or compliance issues that
may arise.
– Importance of a Wallet: ‘

● Simplified in-game transactions management for gamers : Gamers can

easily track their in-game balances, purchases and subscriptions across
multiple games.

● Cross-Game Spending: Encourages players to explore different games

within the ecosystem. In other words, such wallet can help create ab

● Convenient Top-Ups: Users can add funds to their wallet once, rather than
for each game.

– Targeting the US Market:

● Market Size: The USA boasts a massive population with high disposable
income, providing a substantial customer base.It is the largest gaming market
by revenue.

● Diverse Customer Segments: The market caters to various demographics,

allowing for targeted marketing and product differentiation.

● Stronger brand reputation : Operating in a highly competitive market can

elevate your brand's visibility and credibility.

● Investor Confidence: Success in the US can attract significant investments

for expansion.

– Expansion to the EU:

● Take advantage of games opting for new marketplaces : The EU presents

a growing opportunity due to changing DMCA regulations on anti-steering and
the rise of alternative app stores. Providing solutions there gives a first-mover
advantage as many apps currently on-boarded on Apple will be itching to use
solutions that can save them significant commission cost. Apps with high IAP
will benefit from shifting a significant portion of their users to these alternative
marketplaces.

● Payment methods used across different countries in the EU are diverse but
still more homogenous as compared to AIPAC and Latin America.

● France and Germany are the best countries in terms of gaming revenue and
game development.

– Why not the EU first? :

● Cultural adaptation: Tailor your marketing and customer service approach to

resonate with local audiences can be challenging as each country may
require a different approach.
 ● Language capabilities: It may take some time in ensuring that the team has
the necessary language skills to communicate effectively with customers and
partners.

● How solution will integrate with existing gaming ecosystem

– Deep Integration with Game Engines and Platforms

● SDKs and APIs: Develop robust SDKs and APIs for seamless integration
with popular game engines (Unity, Unreal Engine) and distribution platforms.

● Customization Options: Offer flexible integration options to accommodate

various game development workflows. Allow customisation of payment UI and
checkout experience.

– Collaboration with Payment Processors and Financial Institutions

● Multiple Payment Options: Integrate with a variety of payment processors to

support diverse payment methods.

● BNPL Partnerships: Partner with established BNPL providers like Klarana to

offer flexible payment options.

● Financial Institutions: Collaborate with banks or credit unions for secure

transaction processing and fraud prevention.

Feature Set

● High Level feature set of Initial Launch

– Payments / Merchant of Record (MOR)

● Setting up Payment Methods: Support for a wide range of payment

methods including credit/debit cards, digital wallets, and localised payment
options.

● Integration with BNPL Service Provider: Offer buy-now-pay-later options to

increase conversion rates and player spending.

● SDK/API Integration: Simple and robust SDKs and APIs for easy integration
with game platforms.

● Checkout UI Customizer: Tools for developers to customise the checkout

experience to match their game’s branding.

● Fraud Detection and Prevention: Advanced tools to monitor and prevent

fraudulent transactions.
 ● Dedicated Support: Provide exceptional customer support with self service
options integrated in the product.

● Sandbox Environment: A sandbox environment is a critical component for

testing, development, and ensuring the security and reliability of the system. It
provides a controlled space to experiment with new features, integrate with
different payment gateways, and simulate real-world scenarios without
affecting live operations. This will help generate test transactions to mimic
real-world payment flows, including authorizations, captures, refunds, and
chargebacks.

– In-App Purchase (IAP) Management

● IAP Store Design: Customizable templates and tools to design the in-game
store interface.

● Catalogue Management: Tools for managing in-game product catalogues,

including virtual goods, upgrades, and other IAP items.

● User Attribute Schema: Define and manage user attributes to tailor IAP
offerings and promotions.

● Personalization Rules for Discounts and Promotions: Create and manage

rules for personalised discounts and promotions based on player behaviour
and attributes.

– Product Website

● Product Details: Highlight the value proposition, core features, and key
partners.

● Product Demo: Interactive demo to showcase the payment solution’s

capabilities.

● Documentation for Developers: Comprehensive technical documentation to

guide developers through integration and customization.

– Subscription Management

● Manage Various Subscriptions: Support for different subscription models,

including recurring billing, trial periods, and renewals.

– Payments Orchestration Platform

● Smart Routing to Payment Gateways: Optimise payment processing by

routing transactions through the most reliable gateways, reducing payment
failures.
● Dynamic Currency Conversion (DCC): Offer players the option to pay in
their local currency with transparent conversion rates.

– D2C Store/Site Manager

 ● Custom Storefront Builder: Tools for developers to create and manage
direct-to-consumer storefronts for their games.

– Include Crypto Payments

● Multi-Cryptocurrency Support: Accept payments in major cryptocurrencies

like Bitcoin, Ethereum, and others.

● Crypto Wallet Integration: Seamless integration with popular crypto wallets

for easy transactions.

– Wallet Solution

● Unified In-App Purchase Management: Allow gamers to manage in-app

purchases and subscriptions from multiple games within a single wallet,
simplifying the process and providing a clear overview of spending.

● Flexible Integration: Offer various integration options (SDK, API, embed) to

suit different technical capabilities of distributors.

● Features priority

It's essential to view this prioritisation as a starting point rather than a fixed roadmap.
Continuous evaluation and adjustment based on market feedback and performance
metrics are crucial for long-term success.

– Explanation of Scoring:

● Reach: How many users/customers will be impacted by this feature? (1-5

scale)
● Impact: How much will this feature affect the user experience or business
goals? (1-5 scale)
● Confidence: How confident are we about our estimates for Reach and
Impact? (1-5 scale)
 ● Effort: How much work is required to develop this feature? (Inverse scale:
1-5, where 5 means very little effort and 1 means very high effort)
● RICE Score: Calculated as (Reach * Impact * Confidence) / Effort

Based on these scores, features with higher RICE scores are prioritised for development.

Go-to Market Strategy (focus on initial Phases)

● Target segments and how to reach them

As discussed earlier, the initial target market is indie game developers. Not like
others won’t be on-boarded but the major marketing and distribution effort will be
focused on them. The part about how we can reach them is elaborated in Sales
Distribution, Marketing and Partnerships sections.

● Indie Game Developers: Core target market, focused on providing solutions

to their specific pain points.

● Mid-sized Game Studios: Expanding target market, offering tailored

solutions for their increased needs.

● Large Game Publishers: Potential long-term target, providing specialised

services and integrations.

● Gaming Marketplaces and Distributors: Partners for white-labelled wallet

solutions

● Pricing Strategy

Target
Plan Audience Features Pricing Value Proposition
- Basic in-app
purchase (IAP)
experience

- Standard payment 3-5% Transparent, competitive

MVP Pricing All users processing capabilities transaction fee pricing during MVP phase
- Basic IAP
Indie management
developers
and small - Essential payment 5% transaction Ideal for small developers
Basic Plan studios processing capabilities fee with basic payment needs
 Slightly higher
transaction fee
- Advanced IAP
management with Or
Growing personalization tools
studios and An annual flat Enhanced monetization tools
Standard mid-sized - Subscription fee + 5% with advanced management
Plan developers management transaction fee options
- Wallet integration Slightly higher
transaction fee
- D2C store
management Or

- Enhanced An annual flat Comprehensive suite for

Premium Larger customization and fee + 5% managing all payment and
Plan studios analytics transaction fee store needs
Custom
transaction fee
based on scale
and complexity
- All features from
Premium Plan And/Or
Large
studios and - Customised solutions Custom Fully tailored solution for large
Enterprise distribution - Dedicated account subscription enterprises with complex
Plan platforms management pricing requirements
- Add-on features like Flexible options to add
subscription specific features without
Modular management or wallet À la carte committing to higher-tier
Pricing All users integration pricing plans

– MVP Pricing:

● Transaction-Based Pricing:

Rate: A simple pricing model of 5% on each transaction will be implemented

during the MVP phase. This rate is designed to be competitive and aligns with
industry benchmarks.

Payment Carrier Charges: In addition to the 5% transaction fee, standard

card/payment carrier charges will be passed on to the users. This ensures
transparency and aligns costs with standard market practices.

● Benchmarking:

The 5% transaction fee is positioned as a benchmark price. Charging more

than this could deter potential users, while experimenting with a lower rate
(e.g., 3-5%) may attract early adopters or price-sensitive customers.
 For example, in the U.S., Apple allows a 27% commission for apps that use
alternative payment systems outside the App Store, which highlights the
opportunity for a more competitive pricing model like 3-5%.

– Future Pricing Tiers:

As the product evolves and additional features are introduced, a tiered pricing
strategy will be implemented to cater to different segments of the gaming industry.

● Basic Plan:

Target Audience: Indie developers and small studios.

Features: Basic in-app purchase (IAP) experience management.

Pricing: The 5% transaction fee will continue to apply for this tier.

Value Proposition: Ideal for those who need essential payment processing
capabilities without the need for advanced features.

● Standard Plan:

Target Audience: Growing studios and mid-sized developers.

Features:

○ Advanced IAP management, including personalization tools.

○ Subscription management features to handle recurring revenue

streams.

Pricing: A slightly higher transaction fee or a combination of a flat annual fee

+ 5% transaction fee.

Value Proposition: This plan is designed for studios looking to enhance their
monetization strategies through advanced tools that drive player engagement
and retention.

● Premium Plan:

Target Audience: Larger studios and gaming publisher with more complex
needs.

Features:

● Wallet integration for managing player balances across multiple

games.
● D2C store management for direct-to-consumer sales.
● Enhanced customization options and advanced analytics.

Pricing: Higher monthly or annual subscription fees + 5% transaction fee or

higher transaction fees.
 Value Proposition: Provides a comprehensive suite of tools that cater to all
aspects of payment and store management, offering a holistic solution for
larger studios.

● Enterprise Plan:

Target Audience: Large studios, publishers, and distribution platforms with

high transaction volumes and complex requirements.

Features:

● All features from the Premium Plan.

● Customised solutions tailored to the specific needs of the enterprise.
● Dedicated account management and support.

Pricing: Custom pricing based on an assessment of scale, customization

needs, and operational complexity. This could include a tailored combination
of per-transaction charges, and additional costs for custom features.

Value Proposition: Offers a fully customised, scalable solution that can handle
the demands of large studios and distribution platforms.

– Modular Pricing:

● Many of the advanced features can be made modular, allowing users to add
them à la carte based on their specific needs.

● Example: Subscription management or wallet integration could be priced

separately, offering flexibility for studios that only need certain features
without committing to a higher-tier plan.

This tiered pricing approach ensures that the solution can scale with the needs of its
users, from indie developers to large enterprises, while providing clear value
propositions at each level.

● Sales and Distribution Channel

Dedicated sales team

App Store and Marketplace Integration: Integrate the solution with emerging
alternative marketplaces to cater to developers looking for options beyond traditional
app stores.

Direct-to-Consumer Platform: Launch an online platform where game developers and

publishers can directly purchase or subscribe to the payment solution.

Partnerships with Indie Developers: Collaborate with indie game developers to create
case studies and testimonials that can attract larger clients.

For more details refer Partnerships

● Marketing and Promotional Tactics

– Influencer Marketing

● Collaborate with Gaming Influencers: Partner with popular gaming influencers

who have a strong following among indie game developers and players.
These influencers can showcase the ease of integration, benefits, and
success stories of using your payment solution.
● Product Demos and Tutorials: Work with influencers to create detailed
product demos, tutorials, and walkthroughs that highlight how developers can
integrate and benefit from your payment solution. This content can be shared
on YouTube, Twitch, and other platforms.
● Sponsored Content and Reviews: Engage influencers to create sponsored
content or honest reviews of your payment solution. Their endorsement can
significantly enhance credibility and reach.
● Live Integration Sessions: Host live coding or integration sessions with
influencers where they demonstrate integrating your payment solution into a
game, engaging with their audience in real-time.

– Content Marketing

● Educational Blog Posts and Guides: Develop blog posts, whitepapers, and
eBooks that address the pain points of indie game developers, such as
monetization strategies, payment integration challenges, and best practices.
● Case Studies and Success Stories: Publish case studies that showcase how
indie games have successfully used your payment solution to drive revenue
and enhance user experience.
● Webinars and Workshops: Host regular webinars and workshops on relevant
topics, such as optimizing in-app purchases, managing subscriptions, and
using your payment tools effectively.

– Community Engagement

● Developer Forums and Communities: Engage actively in game development

forums like Unity, Unreal Engine, and Reddit. Provide value through expert
advice, answering questions, and offering insights on payment solutions.
● Sponsorship of Indie Game Events: Sponsor game jams, indie game expos,
and developer conferences where you can showcase your solution and
connect directly with your target audience.
● User-Generated Content Campaigns: Encourage developers to share their
experiences using your payment solution through contests or challenges.
Feature their stories on your platforms.

– Partnerships with Industry Platforms

 ● Integration with Game Development Tools: Partner with popular game
engines (e.g., Unity, Unreal Engine) to offer seamless integration and
co-branded marketing campaigns.
● Collaboration with Indie Game Marketplaces: Partner with alternative game
marketplaces (outside Google Play and App Store) to offer exclusive deals,
such as reduced transaction fees or promotional support for games using
your payment solution.

– Direct Marketing and Outreach

● Email Marketing Campaigns: Create targeted email campaigns that offer

insights, updates, and special offers to indie developers. Use segmentation to
tailor content based on the recipient's stage in the development cycle.
● Personalized Outreach to Key Players: Reach out directly to influential indie
developers, publishers, and distributors, offering them tailored solutions,
incentives, and early access to new features.

– Referral and Affiliate Programs

● Developer Referral Programs: Create a referral program where developers

can earn rewards for referring other developers to your platform.
● Affiliate Partnerships with Industry Websites: Partner with websites and blogs
that focus on indie game development to promote your solution through
affiliate marketing.

– Paid Advertising

● Targeted Social Media Ads: Run targeted ads on platforms like LinkedIn,
Twitter, and Facebook, focusing on indie game developers and studios.
● Search Engine Marketing (SEM): Invest in SEM to ensure your payment
solution appears in search results for keywords like "game payment
integration," "indie game monetization," etc.
● Retargeting Campaigns: Use retargeting to engage developers who have
visited your site or shown interest in your content but haven’t converted yet.

– Influencer Partnerships Beyond Gaming

● Collaborate with Tech Influencers: Partner with tech influencers who focus on
fintech, SaaS, and startup ecosystems to reach a broader audience
interested in payment solutions and innovation.
● Cross-Industry Collaboration: Explore partnerships with influencers in
adjacent industries, such as e-commerce and digital content creation, to
attract a diverse developer base.
● Partnership Strategies

– Partnerships with Incubators and Accelerators

 ● Offer Exclusive Access: Provide free or discounted access to your platform
for indie game developers enrolled in incubator and accelerator programs.
This introduces your solution early in their development process.

● Mentorship and Training: Partner with these programs to offer mentorship,

workshops, or webinars focused on payment strategies, monetization, and
market entry. This positions your solution as an integral part of their success.

● Co-Branding Opportunities: Collaborate on co-branded events,

hackathons, or game jams, where your solution is the default payment
platform for participants.

● Alumni Programs: Create special offers or plans for graduates of these

programs, ensuring continued loyalty as they grow.

– Partnerships with Venture Capital Firms

● Integration with Portfolio Companies: Establish relationships with VCs that

fund indie game developers and offer your payment solution as a preferred or
exclusive option for their portfolio companies.

● Revenue Sharing Models: Propose revenue-sharing models where VCs

earn a percentage based on the transaction volume processed by their
portfolio companies through your platform. This incentivizes VCs to
recommend your solution.

● Investor Education: Provide VCs with resources and insights on the value of
integrating robust payment solutions early in a game’s lifecycle. Highlight how
it reduces time-to-market and enhances monetization.

● Joint Marketing Initiatives: Engage in joint marketing campaigns with VCs

to promote successful use cases where your payment solution has driven
success for indie games they’ve funded.

– Partnerships with Alternative Marketplaces

● Exclusive Launch Deals: Partner with emerging marketplaces to offer your

payment solution as a pre-integrated or preferred option. Negotiate exclusive
launch deals where indie games that use your platform receive promotional
support on these marketplaces.

● Revenue Incentives: Create incentive programs where developers who use

your payment solution receive reduced commission rates or other financial
benefits on alternative marketplaces.

● Localised Solutions: Offer tailored payment methods and currency options

that are region-specific to these marketplaces, enhancing your appeal in
diverse markets.
 ● Cross-Promotion: Develop cross-promotion strategies where your payment
solution and the marketplace both promote each other’s offerings, leveraging
each other’s networks to grow user bases.

● API Integration: Work closely with alternative marketplaces to integrate your

solution into their ecosystems seamlessly. This could include custom SDKs,
API integrations, and white-label options that fit their brand guidelines.

● Educational Content and Resources: Partner with marketplaces to create

joint educational resources, such as whitepapers, webinars, and case studies,
to educate developers on the benefits of using your payment solution.

– Partnerships with Indie Game Developers and Publishers

● Developer Evangelism: Establish a developer relations team focused on

building relationships with indie game developers. Offer dedicated support,
resources, and community engagement to foster loyalty.

● Flexible Pricing Models: Create pricing models specifically designed for

indie developers, with options like revenue-sharing or reduced fees for small
teams.

● Community Engagement: Participate in indie game development forums,

events, and communities. Sponsor indie game awards or conferences,
positioning your solution as a supporter of the indie community.

● Platform Integrations: Ensure easy integration with popular game engines

(e.g., Unity, Unreal) and publishing platforms. Provide plugins and tools that
simplify the process of adding payment functionalities.

● Co-Creation Opportunities: Engage in co-creation projects where you

collaborate with indie developers to build and refine features tailored to their
unique needs. Highlight these partnerships in your marketing.

– Partner with Game Development Tools and Services

● Integrate with Middleware and Tools: Partner with companies offering

game development middleware, tools, or services that indie developers
frequently use. Offer your payment solution as a built-in or easily integrated
option.

● Bundled Services: Collaborate with complementary services (e.g., analytics,

user testing, localization) to offer bundled packages that include your payment
solution at a discounted rate.

– Strategic Alliances with Payment Gateways and Fintech Firms

● Payment Gateway Partnerships: Partner with established payment

gateways to offer integrated solutions that include your features alongside
traditional payment processing.
 ● Collaboration with BNPL Providers: Collaborate with buy-now-pay-later
(BNPL) providers to bundle their services with your payment solution,
enhancing the value proposition for game developers and their customers.

Implementation Timeline

● Phased roll-out

– MVP Focus

The MVP should concentrate on the core functionalities essential for validating the
product concept and gathering initial user feedback. Here's a breakdown:

● Core Payment Processing: Ensure seamless transactions, including various

payment methods and integrations.

● Wallet Functionality: Establish a basic wallet for managing in-game funds.

● Developer Integration: Provide essential SDKs and APIs for easy

integration.

● Fraud Prevention: Implement fundamental fraud detection measures.

● Customer Support: Offer basic support channels (e.g., email, FAQ).

– Beta Version Focus

The beta version expands on the MVP by incorporating additional features and
refining the user experience:

● Enhanced Wallet Features: Introduce advanced wallet features like

cross-game compatibility, loyalty programs, and budgeting tools.

● Expanded Payment Options: Add more payment methods, including BNPL

and cryptocurrencies.

● In-Depth Analytics: Provide detailed performance metrics and user insights.

● Personalised Experiences: Offer tailored recommendations and promotions

based on user behaviour.

● Robust Customer Support: Expand support channels and offer more

proactive assistance.
– Phase wise Timeline :

Estimated
Stage Phase Focus Key Features Regions Months

Payments/MOR, SDK/API,
Checkout UI, Fraud
Prevention, Support,
Product Core Catalogue Management,
1 Definition Functionality Sandbox environement US 2-3
MVP Minimum Viable
2 Development Product Core features, basic UI/UX US 3-4

In-app purchases,
personalization,
3 Beta Testing User Feedback subscription management US 2-3

EU
Localized payment (Germany,
Market European methods, compliance, France,
4 Expansion Launch expanded wallet features UK) 3-4

Payments orchestration,
D2C store, crypto
Platform Advanced payments, cross-game
5 Expansion Features wallet US, EU 4-6

APAC,
Global Geographic Localization, payment Latin
6 Expansion Expansion methods, compliance America 4-6

Advanced analytics,
Continuous Innovation and loyalty programs, new
7 Improvement Optimization features Global Ongoing
 ● Idea validation

– To define iterative versions effectively, consider the following:

● Core Functionality: The MVP should establish the core functionalities of the
product.

● Feature Prioritisation: Based on the feature prioritisation matrix, determine

which features to include in each iteration.

● Market Feedback: Continuously gather feedback to inform the development

of future iterations.

● Technical Constraints: Consider the development team's capacity and

available resources when defining iterations.

– Shipping Iterative Versions

● Agile Development Methodology: Employ an agile framework like Scrum or

Kanban for flexible planning and execution.

● Continuous Integration and Continuous Delivery (CI/CD): Automate the

build, test, and deployment process to accelerate release cycles.

● Version Control: Use effective version control practices to manage code

changes and track progress.

● A/B Testing: Experiment with different features and functionalities to optimize

product performance.

● Phased Rollouts: Introduce new features to a subset of users to gather

feedback before a full-scale launch.

KPIs and Success Metrics

● KPIs to be used to measure success of product launch

– User Acquisition and Activation

● Customer Acquisition Cost (CAC): The cost of acquiring a new customer.

● Conversion Rate: The percentage of website visitors who become customers.

● Activation Rate: The percentage of users who take specific actions after
signup (e.g., creating a wallet, making a payment).

● Time to First Purchase: The average time it takes for a new user to make their
first purchase.

– Product Usage and Engagement

 ● Wallet Usage Frequency: How often users access and use the wallet.

● Average Transaction Value: The average amount spent per transaction.

● Customer Lifetime Value (CLTV): The total revenue generated by a customer

over their lifetime.

● Net Promoter Score (NPS): Measures customer satisfaction and loyalty.

● Churn Rate: The percentage of customers who stop using the product.

– Financial Performance

● Revenue Growth: Overall revenue generated by the platform.

● Gross Merchandise Value (GMV): Total value of transactions processed.

● Profit Margin: The profitability of the platform.

● Return on Investment (ROI): The return generated on the investment in the

product.

– Market Impact

● Market Share: The percentage of the target market using your product.

● Competitor Analysis: How your product compares to competitors in terms of

features and market share.

● Brand Awareness: Measurement of brand recognition and recall.

– Developer Satisfaction

● Developer Onboarding Time: Time taken for developers to integrate the

solution.

● Developer Support Tickets: Number of support tickets raised by developers.

● Net Promoter Score (NPS) for Developers: Measure developer satisfaction.

Risk Management

● Potential Risk associated with launch:

– Technical Risks

● Integration Challenges: Integrating with various game platforms, payment

gateways, and other third-party systems can be complex.

● Security Breaches: Protecting sensitive user data, financial information, and

preventing fraud is crucial.
 ● Scalability Issues: Ensuring the platform can handle increasing transaction
volume and user load.

● Technology Obsolescence: Staying updated with the latest technology

trends and avoiding platform lock-in.

– Regulatory Risks

● Payment Regulations: Adhering to complex and evolving payment

regulations in different jurisdictions.

● Data Privacy Laws: Complying with data privacy regulations like GDPR,
CCPA, and others.

● Tax Compliance: Navigating tax laws and reporting requirements in various

regions.

● Licensing and Permits: Obtaining necessary licenses and permits for

operating a payment and wallet service.

– Market Risks

● Competitive Pressure: Intense competition from established players like

Xsolla, PayPal, and others.

● Economic Downturns: Fluctuations in economic conditions impacting

consumer spending and developer revenue.

● Changing Consumer Behaviour: Adapting to evolving payment preferences

and trends.

● Market Entry Barriers: High barriers to entry in terms of capital, technology,

and partnerships.

Assumptions

Demand for Alternative Payment Solutions: There is a significant demand from game
developers and publishers for alternative payment solutions due to high fees and
restrictions imposed by major app stores. Assumption is that EU and legal framework
in other countries/regions will continue to shift towards the trend where Google Play
and App store will not be able to monopolise payments market,

Growth of Indie Games: The indie game market is growing rapidly, providing a fertile
ground for introducing tailored payment solutions that address the specific needs of
smaller developers. Assumption is tapping into indie game developers is a perfect
launching pad and they are inclined to move IAP, subs management, D2C store etc
to 3rd party services considering limited resources they have.
 Regulatory Compliance: The assumption is that the company will be able to navigate
complex regulatory environments, especially in regions like the EU, where recent
rulings have impacted the way payments are processed in the gaming industry.

Appendix

1. Most common frauds in gaming

a. Friendly Fraud : Friendly fraud occurs when a legitimate transaction is disputed.

This can happen for various reasons: sometimes, the dispute is genuine—such
as when someone isn't aware that another person with access to their gaming
account made a purchase. Other times, the individual may not recognize the
transaction when they see it on their statement. However, it's also not uncommon
for people to dispute transactions simply because they regret making an impulse
purchase and want to reverse it by claiming it was fraudulent.

b.

Competitive Benchmarking Template and factors that can be used

Cost/Challenges associated with regulations
Specific regulations in various zones
Some ideas