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Online Gaming companies moving towards Payment Gateway business models

The popular method for starting an online gaming company in the Philippines is that you talk to a developer in Korea and then you pay for the license of their game for a specific locality. You set-up the servers here and form the various departments needed to keep the game running. However, due to the high capital needed and operational costs involved in this type of business, companies are now making themselves payment gateways for international games instead of localizing.

Mobius recently announced that their local cards can be used to buy game time for Eve Online. Eve Online is a popular international sci-fi MMORPG brand that has a huge following in China and in the United States. Level-up Games also has the same deal with Silkroad Online. Local gamers can now buy in-game currency for the item mall using Level-up Top-up cards. Why the sudden move?

As I said earlier, it is really expensive to run an online gaming company. You will need a massive sales force that has to cover the entire Philippines. You will also need a very competent marketing and operations teams. Management will also have to come up with various support departments like Creatives and Marketing Services in order to fully promote their products. Companies will even have to pay for hosting their servers here, and let’s not even talk about how expensive the hardware is.

When you do a payment gateway scheme, you will just have to pay royalty for your card sales and the rest of the profit goes to your company. The servers will be international and even the events will be run by the international GM Team. Marketing promos and the like will be driven by the developer, and all you have to do is to constantly roll-out when there is a new major patch or update for your game. The bad thing about this is that you won’t have much of a say in the in-game marketing efforts and the development of the product. Your success will be limited to the capability of your developer to deliver good in-game events and promotions.

Payment Gateways are a sign of things to come. I strongly believe that the online gaming industry will boom, especially if the internet infrastructure matures and more people start hooking their houses up with broadband DSL connections. Let’s also take into consideration the sudden boom in the internet cafe business. Right now we have more than 10,000 internet cafes in the Philippines, and the numbers are climbing constantly, especially with more games coming in. If the growth of the industry continues, it is really not that surprising if a local company snags a payment gateway deal with Blizzard for World of Warcraft. When that happens, we’ll be seeing Taurens and Night Elves screaming “ASA!” all over the place, hehe.


About the PTB Guest Blogger:
Carlo “œWauks” Ople currently works as the Brand Manager for Ragnarok Online for Level-up Games. He maintains a blog, Waukster Online, which aims to give readers a glimpse of how life is working for an online gaming company.

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  • is the local market really that bad?

  • But eventually, aren’t profits bigger when they set up local servers as opposed to opening up payment gateways?

    Forged local communities keep players more hooked to the game, thus the potential for revenue is higher in the long run. As with the case of pRO, there are still a significant number of people who stay in the game to stay in the community.

    I tried Silkroad on the Int’l server. If I stumbled upon strong virtual ties, it would’ve kept me in the game more. Since this was not the case, the gameplay itself wasn’t enough to keep me hooked.

    Tantra, on the other hand, had a mindless grinding sort of gameplay but I keep getting sucked back in it anyway due to the community.

    So is it right to say that though the capital for setting up games locally is much more significant, the payback is also higher and more long-term?

  • Banana

    It’s been a while since I’ve been here! Been very busy since its almost the end of the term haha! anyway, its good news for filipino gamers when the Online game industry here expands to international grounds rather than local servers. But god please don’t let them infest World of Warcraft! Right now I’m this game so much because of its community of civilized gamers! I had enough run ins with really bad gamers here in our local game servers! If pinoy gamers really want to go with the international community I really think they should take a class or two in Internet Ethics! I really think most pinoy gamers don’t follow any code of ethics which is really quite annoying and if these kind of attitude is presented internationally, you can expect other players will begin to drop you out of a clan or group if you happen to be a filipino. But this is just my 2 cents. =)

  • I want to know more how you can setup the payment gateway business as said here.

    Sounds interesting.

    Thanks