As far as Xsolla's role in China's game chain is concerned, it is far more than a cross-border payment service provider. On the basis of covering more than 200 regions, more than 20 languages, more than 65,438+030 currencies and more than 700 payment methods around the world, Xsolla also provides a number of services for the distribution and promotion of game products, such as consulting services around increasing the income of single products, intermodal services, online celebrity marketing services to help game products get better customers, and even visualization services based on big data analysis. It is worth mentioning that the business model of the above Xsolla business does not include the upfront cost, but only collects the share of the growth part, which has been affirmed by a considerable number of practitioners and game companies.
So, what changes are taking place in the global market for Xsolla, a veteran service provider who focuses on payment and is committed to providing a package of services? What hidden dangers should China pay special attention to when going to sea? From the perspective of Xsolla, how to provide quality services for developers and publishers in combination with responses to related questions? In this dialogue, let's give the answers to these questions to Mr. Chen Jinbo, the head of China District of Xsolla.
Jingbo Chen, head of Xsolla Greater China
The following is the interview record.
Change, Risk and Xsolla's Old Bank of Cross-border Payment
CIS: In an interview with the Indie Game Globalization Salon held during CJ this year, you mentioned that the ability of game developers in China has been greatly improved overseas. Then, combined with previous cooperation experience with overseas game companies, can you specifically talk about your feelings about his domestic game development in the past year? Or what do you think is the biggest change of domestic games going out to sea?
Jingbo Chen: In terms of indie games, the games developed by China are increasingly recognized by overseas players, including Dyson Sphere Project and so on. At present, going out to sea has become the first choice for China developers, and has achieved very good results in several tracks. In the past, China's games went out to sea mainly in the Asia-Pacific region, but now they have achieved very good results in Europe, America, Latin America and the Middle East.
CIS: Xsolla has been helping domestic and foreign game teams to solve the problem of cross-border payment at sea. For example, from your point of view, have the overseas payment environment and users' payment habits in Europe, America, Japan, South Korea, Southeast Asia and Russia changed in the past 1-2 years?
Jingbo Chen: Generally speaking, the payment environment is relatively stable, and each country has its own characteristics. For example, in Russia, payment must have its own local company. South Korea passed the "Partial Amendment to the Telecommunications Law" to end special situations such as large-scale platform monopoly supporting third-party payment.
Every region has its own particularity. Let's take the Russian market for example. Unlike North America, where more than 90% people use credit cards and PayPal to pay, Russia is one of many countries that have developed their own local payment ecosystem. In addition, as the old services gradually become obsolete and new services are replaced, the payment scene in Russia changes as rapidly as any other industry. According to the data monitored by Xsolla, only 26% of e-commerce payments in Russia are made by credit cards or debit cards (from suppliers such as Visa, MasterCard, Maestro and MIR), and the remaining 74% use other payment methods. This is very different from the American market. In the American market, 60% of payment is made by debit and credit cards, 30% by PayPal, and the remaining 65,438+00% by cash, gift cards, banks and other means.
CIS: For some markets with great potential in recent years, such as the Middle East and Latin America, local users may have a certain threshold in credit card payment. Our understanding of local user payment may be primitive, which may be point card and ATM. So what are the payment habits of local users that you have recently learned? Can you give me an example?
Jingbo Chen: We can mainly talk about Brazil. The most important market in Latin America is Brazil. According to Xsolla's data analysis, 52% of game transactions in Brazil are conducted by credit cards, but Brazilians rely heavily on domestic credit cards, which means you want to increase your income in Brazil. In addition to popular international credit cards, you also support local cards, such as Elo, Hipercard and Aura. On the other hand, installment payment can have a great impact on the game income in Brazil. Xsolla data shows that games that support installment payment can increase the number of paying users by about 60% in Brazil.
In addition, online banking transfer, cash payment and digital wallet are also very important. Although the proportion of online banking transfer is not high, it can also bring about an increase in income. Cash payment is very important. BoletoBancário, a popular voucher-based payment method, and the updated version of BoletoFreshPayPal are essential products for Brazilian digital wallets, as are local PagSeguro.
CIS: Based on Xsolla's previous cooperation experience and observation with domestic game manufacturers, are there any new problems or risks in cross-border payment that developers can easily ignore? For example, the bad debt rate in Europe and America mentioned earlier.
Jingbo Chen: The biggest risk may be compliance. This is the first one. Today, a company asked me if I could do something with an IP edge ball. We will definitely not accept this kind of thing, because Europe and the United States attach great importance to copyright, which is something that everyone needs to pay attention to.
There are also tax issues. Xsolla is different, and its business model is quite special. We are equivalent to the agent of virtual goods sales, helping our partners to sell locally, so we will face tax problems in different States. Some States will face a 50% fine if they don't pay taxes, but now many publishers will make a profit of more than ten points. If they are fined again, the risk will be very great.
As for bad debts, we have been focusing on the payment of games for 0/6 years, and we have a PayRank system, which has been well received by companies like Epic. On the other hand, we have the accumulation of databases. For example, a player's performance in other games is not very good, because there is a record, and his fraudulent means will be invalid on our side. For example, we can limit our consumption to a few dollars, so that even if something goes wrong, it won't do much harm to the game itself.
We have encountered some problems before. Some players will organize themselves, quickly consume game content through a large amount of consumption, and then refund through loopholes, and then write strategies or share according to the consumed game content to make profits, including playing gold. This will make people very headache.
For Xsolla platform, if you pay through us, there is no refund. Of course, there is also a situation here, such as the refund of credit cards. We can't go beyond the law, but in other aspects, if users come to us and ask for a refund, we will consult the issuer to minimize the bad debt rate.
For another example, we have a partner who made a comparison between Xsolla and other companies. Although our competitors are bigger than our company, this partner finally chose us because our competitors don't have customer service and we do.
So in general, Xsolla's system is quite mature in terms of payment and anti-fraud in overseas markets. At its peak, there were 30 million transactions per minute. It can be said that we have experienced all the related problems in the game and formed a system in this field, which can ensure that publishers will minimize bad debts.
CIS: You just mentioned the tax issue, which is indeed a common problem in cross-border payment. Then you can specifically talk about whether there are any new changes in local tax policies for some popular countries that pay more attention to domestic games, such as Europe, America, Japan and Russia.
Jingbo Chen: Indirect taxes are indirect taxes, including value-added tax, sales tax (levied by the United States), Russian value-added tax and GST(GoodsandServiceAX, called GST in Australia and New Zealand). Because Xsolla is merchantofrecord, we can help our partners to apply and submit tax returns.
Value-added tax (also known as Russian VAT, GST) is an additional tax, which is a kind of EU/Russia tax system, that is, you need to pay extra tax when shopping, and the tax rates vary from country to country. In addition, the business tax of SalesTax is calculated according to the United States, which is similar to the value-added tax. But in the United States, sales tax is usually borne by users, and our default setting is that sales tax is also borne by players.
Sales tax is the consumption tax levied by the government on the sale of goods and services. Because there is no federal sales tax in the United States, state and city (city and county) governments can legislate, promulgate and enforce their own sales tax laws, and the laws of each state may be different, resulting in high variability between purchases. Faced with such a complicated situation, we can maintain compliance in several different ways. For example, in South Dakota, we can use the sales tax management software paid by the state government; Developers can also pay attention to the different sales tax laws in the United States and design their own management software according to their own characteristics; Generally speaking, these tasks are still relatively complicated. You can leave the complexity of tax management to a reliable record dealer like Xsolla. At present, more than 65,438+0,000 well-known manufacturers and enterprises are cooperating with Twitch Xsolla to solve valve-related problems.
CIS: Under these risks, which market or type of games do you think is more difficult and challenging in cross-border payment?
Jingbo Chen: A large part of the challenges and thresholds of Haisai come from local laws and regulations, taxes and popular payment methods. For example, a large part of local payments in Russia are made on machines similar to ATMs. For example, few people in Brazil have credit cards. However, when the game company cooperated with our Xsolla, most of the thresholds and challenges have been handled by us. Our partners don't need to worry about these issues, so they didn't say that there are more thresholds or challenges for them.
CIS: Faced with these problems, can you talk about what preparations should be made and what factors should be considered when setting up shop pages, overseas accounts and payment functions in a single region?
Jingbo Chen: Before developing overseas business, the most important preparation is to know the local payment habits. As we said before, few people in Brazil use credit cards, so if a game company pins all its business channels in Brazil on Apple AppStore, the result can be imagined, because AppStore only accepts credit cards.
For China game developers who want to go to sea, I suggest you ask more information about focusing on the market and talk to experienced friends or companies like Xsolla. We may be able to give some relatively perfect solutions, and we will certainly provide relevant information to help you make better decisions.
CIS: Are there any differences when we formulate cross-border payment solutions for game developers in developing countries such as Europe, America, Japan, South Korea and the Middle East and Latin America? How to treat payment localization refers to the preparatory work that must be done in payment?
Jingbo Chen: Take MetroExodus as an example. Its current basic price is $39.99, $20 in Argentina or Kazakhstan, and almost $60 in Japan. Of course, you can also set a price for all regions, but this will prevent some potential buyers from buying, resulting in a decline in overall sales. However, if your product sends Steam, you can automatically set regional pricing.
For us, we can only make geographical restrictions and set different prices according to the characteristics of different markets. Of course, for various reasons, you can't restrict some users, but the proportion of these users is very, very small; In this regard, our PayRank system can push relevant content to players according to information such as region and payment habits. As just said, Epic's evaluation of this system is "the first in the world".
CIS: So, recently, South Korea, the Netherlands and other places have issued or pre-issued some bills urging Google and Apple to open third-party payment channels. How to treat this phenomenon? For domestic developers, do you need to plan ahead and make some preparations?
Jingbo Chen: This is determined by the western anti-monopoly culture. When a company becomes a giant, sharing dividends with other companies is one of the characteristics of western culture. We don't need to read too much about this. For developers, it is still necessary to adapt to these changes as soon as possible and seize the dividends brought by third-party payment.
In this respect, you can use webshop's solution instead of jumping from the game, which can not only avoid conflicts with platforms such as Google and Apple, but also increase income, transfer gamers from other platforms to their own distribution platforms, and increase player stickiness.
Xsolla foresaw this change earlier and launched a variety of products to solve related problems. Now we have aggregated these products into a new solution "xsolla online shop mobile game", which has solved the problems including discoverability, declining profit rate, lack of control over user experience, obtaining localized payment methods, cross-game marketing, and more effective user acquisition. Through this scheme, developers can get more than 40% revenue.
CIS: For developers with global distribution, even multi-platform and global distribution, you can share what processes, services, tools and resources Xsolla has used to help game developers make cross-border payment and realize payment localization.
Jingbo Chen: It may be more appropriate to talk about this issue with a case. Taking Night of the Fortress as an example, EpicGames uses Xsolla's localized alternative payment method "intelligent network" and has its own payment process, which allows players without bank accounts all over the world to pay, helping players to buy games directly from mainstream publishing platforms and developers outside the ecosystem, and at the same time, using self-updating algorithm to filter fraudulent payments, reviewing disputed transactions for 7*24 hours and providing summaries.
In addition, Roblox is also a very good case. At that time, RobloxCorporation wanted to find a partner to help them establish a player-centered game gift card program, which could increase the income and improve brand loyalty and participation. In this cooperation, Xsolla integrated the payment gateway of BlackhawkNetworkOnDemand, a trusted gift card publisher, and gave priority to Roblox's in-game store and checkout experience. The early success of this plan has led to the expansion of its influence, and at the same time, more partners have been added to form a strong network for wider distribution. Furthermore, it promotes the organic and effective layout of Roblox players' living, shopping and game spaces (including digital and physical retail stores). In the end, Roblox achieved a revenue growth of 35%, which was also affirmed by users. This integration made Roblox gift cards rapidly develop into mainstream products, and the average income (ARPPU) of each paying user increased from $65,438+$03 to $20. So far, Roblox's gift card program is still very strong.
Marketing, distribution, realization, data, don't just think of Xsolla as a payment company.
CIS: You mentioned that Xsolla has built a marketing platform among online celebrities, with more than 650,000 online celebrities, helping game developers to market among online celebrities. Indeed, online celebrity marketing has always been an important way to push games to the sea. Could you please talk about what Xsolla has done in this regard and how it can help developers?
Jingbo Chen: Actually, as a payment company, providing customer acquisition is a new thing, mainly because Xsolla found that many small and medium-sized companies have some shortcomings in customer acquisition, and they don't even know where the celebrity channel on the Internet is. Therefore, Xsolla has signed more than 50 online celebrity networks, covering many KOL and online celebrities. After signing, it is equivalent to an aggregation platform. If publishers want to get customers, they can invite them directly. Because there is no upfront cost, this model is actually very good, including PUBG, which has been used all the time, and many big companies like it very much.
The problem we found is that many companies want celebrity resources on the Internet, and they can only invite one or several people, and they have to pay in cash, while in Xsolla, they adopt the sharing mode and do not need to pay in advance. On the other hand, when there are many celebrities on the Internet, and the number reaches hundreds or thousands, your compensation will also be a problem, and Xsolla will also solve this problem. Many companies only accept money services, but not payment services. We have paid and spent.
CIS: In addition to the marketing among network celebrities, combined with the previous cooperation between Xsolla and channels, how will Xsolla help game developers to promote overseas?
Jingbo Chen: In addition to payment, taxation, customer acquisition, and so on, Xsolla also has a intermodal and unique service. Our combined transport and unique mode are quite special. For example, if a game earns $ 500w a month, but it can't get up after running for three months, then we can try to cooperate with Xsolla and discuss the proportion in advance. If the monthly income increases by 65,438+00% after the cooperation, then we will only share the increased $500,000, and will not take the original $5 million.
There is also a unique model in which a product, some regional and national markets can be handed over to Xsolla for distribution. On this basis, Xsolla recently launched a new product. For example, the income of a game of $ 2000w per month has reached the bottleneck. If Xsolla is found at this time, we will have a team of experts to do consulting services, including some suggestions obtained by users and so on. After the consulting service is completed, the game revenue rises, and we still only divide it into incremental parts without any upfront fees.
This service is very popular among overseas game companies, but as far as China practitioners are concerned, small and medium-sized companies may be more suitable. If you send products to Europe, you may be familiar with Britain, but you may not be familiar with Spanish-speaking areas and don't know how to do it, then this service Xsolla can be provided.
In addition, when it comes to going to sea in Arabic-speaking areas, everyone thinks it must be the Middle East, but sometimes it is not, because many Arabic users living in the United States are rich and willing to pay. To be the so-called "Arab market", we should not only be the Middle East, but also the United States. Like these details, people often don't know much about them. Xsolla has rich experience in this field and is willing to help you explore.
CIS: You also mentioned in your public sharing that in addition to helping game developers solve the problem of cross-border payment, you also hope to help developers improve their game liquidity through Xsolla. On this basis, you can talk about a certain category or the area where you go to sea. The games you find are often realized by going out to sea. In addition to payment, what other pain points do you have?
Jingbo Chen: I have repeatedly stressed that Xsolla has been focusing on playing games for fifteen years, and the foundation is still very deep. Our system is particularly stable. Not long ago, some partners reported that there is no need to worry about money when working with Xsolla. From the comparison of drop-off rate, the drop-off rate of another payment company they cooperate with is less than a quarter of this one, or Xsolla hardly drops orders.
Sometimes customers are often asked about their traffic, and many publishers don't know which countries and regions they are targeting. At this time, I will explain that if there are many users and the traffic is particularly large, we will set up the server locally and put the bandwidth well to avoid problems with the server affecting the payment processing. We have done the related work very seriously. For products with 1 10,000 to 2 million dollars, it may not be necessary to consider similar problems, but if it is a product with a scale of110 million dollars, it must be considered, otherwise the high drop rate will be very painful.
On the other hand, there is the XsollaLauncher launcher, which can be used anytime and anywhere, no matter where the user is. Xsolla not only allows you to collect money, but also allows players to see you, so we have made a series of related tools to let players find the game conveniently anytime and anywhere, recharge the game, and avoid the loss of players to the greatest extent.
Another thing Xsolla has been doing is that we sponsor all overseas conferences. Because we want to build confidence in players, let players feel trustworthy when they see Xsolla, and are willing to pay through us. At the same time, based on the recommendation of Xsolla, players may like to play your game with Xsolla, which is also an advertisement in a sense. If the players are not familiar with the game and the means of payment, some users may be worried and unwilling to pay. Don't underestimate this problem, in fact, it has a great impact.
CIS: Previously, Xsolla acquired Slemma, a developer of data reporting tools. You talked about making the user-paid data accumulated by Xsolla for many years into visual effects to help game developers. Can you tell us in the future how Xsolla will help game developers, especially domestic sea developers?
Jingbo Chen: This piece is actually very simple. Although we are a payment company, the core of our payment work is actually the processing of large-scale data. After processing, these data can not only analyze trends, but also serve customers. So how do customers analyze these data? How do we present customers' needs? So we visualize it, from payment to network celebrities, to intermodal transportation, to other aspects, including the acquisition of this company, which is essentially to help partners, so that we can enjoy a package of services more easily on our platform, get more users, and focus on the game itself.
Many publishers think that we are professional when they see our data, which is convenient for partners to find interesting points and find what they need in a chaotic way. This is not only visualization, but also making it easy for everyone to get the data they need to help their future development.