Payments Help Move Gaming, Metaverse Beyond Today’s ‘Tip of the Iceberg’

To get a sense of how society changes right alongside technology, and technology changes society, consider this:

The pandemic has made it so that, in the quest for diversion, with platforms, joysticks, virtual reality headsets at the ready, more than half of the U.S. population goes online to play.

Gamers are a dedicated bunch in pursuit of the pleasure that comes with the swirl of graphics, with the communities that stretch across the globe, bound together in real time.

They’re willing to pay for the privilege too. And along the way, the metaverse can fully blossom.

Seventy-one percent of gamers play games on a weekly basis — and spend $61 on average, annually, to do so. Multiply those annual expenditures by hundreds of millions of people, and it’s no wonder that as recently as 2020, gaming was a $180 billion industry.

Thus, economies take shape inside these virtual ecosystems. But payment challenges arise, tied in part to the complexities of managing transactions across borders.

In an interview with PYMNTS’ Karen Webster, Scott Damassa, eCommerce, tech, comms and gaming sales head of NAM at Citi, TTS, and Aman Chadha, eCommerce, tech, comms, and gaming sales head of APAC at Citi, TTS, said that advanced infrastructure makes it easier for various stakeholders to monetize the video game ecosystem.

Damassa remarked that the world of gaming has evolved markedly from the days, decades past, of the Atari 2600.

“It used to be, you go to your local store, you buy a box of software, it was a physical disc, it was a cartridge, it was whatever it was. And that’s it. Game over,” he said. Pay $40, get the game cartridge, in other words.

Fast forward to the 21st century, and the subscription model holds sway, complete with add-ons and skins and all manner of ways to stay engaged with consumers. There are several points of contact between gamers, platforms, and even advertisers to engage and transact. (There’s even money to be made where people watch other people play games.)

Behind the scenes, of course, there are revenues, royalties and fees accruing to the developers, publishers and all manner of content creators.

“Everyone wants to get paid quickly,” Damassa said, “and you can’t just wait till the end of the month. In some cases you have to pay [creators] instantly to continue to deliver their services.”

That sense of urgency and desire for seamless fund flows, said Chadha, extends well beyond gaming into all manner of other platforms, including the gig economy. For financial institutions (FIs), and enterprises, batch payments are no longer adequate to meet the demands of always-on commerce. For the payors themselves, there’s the opportunity to charge a fee for speed and convenience.

Damassa and Chadha said that, through platforms, connections are being forged through marketplace economies and peer-to-peer networks enabling the exchange of goods and services.

Enhanced Connectivity

Enhanced connectivity, Chadha said, “opens up a lot of possibilities.”

Developers, especially, have a preference for alternative payment channels, including digital wallets — many of these creators may not have bank accounts. They pointed to Citi’s WorldLink Payment Services, which allow users to issue payments in more than 135 currencies without having to maintain local currency accounts.

The confluence of gaming, payments infrastructure and virtual reality (VR) is cementing the runway for the Metaverse, said the two Citi executives, bringing people into VR concert settings and other events.

The infrastructure to facilitate 3D shopping experiences and interactive digital storefronts is still being built. For the time being at least, Chadha and Damassa said that payments will have to be modular to work with different models as those models evolve.

Moving ahead, with embedded payments as part of the mix, Damassa pointed to the advantages the 3D metaverse will have over 2D offerings. The metaverse, he said, can bring commerce to all settings (including, say, the beach).

For a parallel, he offered the fact that back in the early days of filmmaking, movie cameras were stuck “inside” studios and sets. Soon, of course, the cameras and film technology became adroit enough to go anywhere.

As Damassa told Webster of the metaverse: “We’re waiting for our movie camera moment.”