Prepaid gift cards have a rich history in the gaming industry, dating back to the early days of online gaming. Nexon, a South Korean video game company, introduced the first game card in 2002 for the game MapleStory. The introduction of game cards was a significant development in the video game industry, as it allowed players without access to credit cards or online payment methods to purchase virtual items and currency. Since then, game developers have been using prepaid gift cards to allow players to purchase virtual currency, game time, in-game content, and other items. Blizzard Entertainment’s World of Warcraft game card and Riot Games’ League of Legends game card are two examples of how prepaid gift cards have been used successfully in the gaming industry.
The COVID-19 pandemic of 2020 led to a surge in the use of prepaid gift cards in the gaming industry. With more people staying at home and playing video games, the demand for game cards increased. This led Google to launch a new payment method for its Play Store called “Play Codes,” which are essentially prepaid gift cards that can be used to purchase apps, games, and in-app purchases on the Play Store. Xbox also followed suit by launching “Xbox Gift Cards,” which can be used to purchase games, apps, and in-game content on Xbox consoles and Windows 10 devices.
Prepaid gift cards have become a necessary part of the gaming industry, providing players with a convenient and accessible payment method. Game developers can avoid the fees charged by app stores by using prepaid gift cards, giving them more control over their earnings. The success of Roblox is a prime example of how prepaid gift cards can be used effectively in the gaming industry. The online gaming platform has made a third of its revenue from the sale of gift cards, which are powered by prepaid gift cards. By using prepaid gift cards, Roblox has avoided the 30% fee charged by app stores, giving them more control over their revenue. It is estimated that Roblox saves over $60 million in platform fees that might have otherwise been paid to Apple and Google.
In order to determine the extent of Roblox’s savings, we need to calculate the fees charged by Blackhawk Network, the company managing their gift cards through an alternative method. Based on Blackhawk Network’s SEC filing in 2016, they appeared to charge a commission fee of 7.6%, earning $1.2 billion in commission and fees from $16.6 billion in transaction volume. Additionally, Amazon.com charges a 20% referral fee on gift card sales. Combined, these fees amount to 27.65%, which is close to the fee charged by Apple. As a result, it is unlikely that Roblox prefers this option, unless Blackhawk and Amazon have negotiated lower fees for their best performing gift cards. It’s worth noting that while virtual gift cards make up the majority of Roblox gift card sales, physical stores take approximately 5% of the transaction value, making them a more profitable option than selling on Amazon.com. However, Amazon is able to charge a higher fee because they make up over 70% of Roblox gift card sales according to YipitData email receipt data. As a result, it may be difficult for Roblox to escape these high platform fees.
Other game developers have taken notice of the success of Roblox and are looking for ways to replicate their model. However, creating successful prepaid gift cards and loyalty programs with distribution can be a challenging task for games. This is where the QGlobe SDK comes in. The SDK is a complete decentralised Prepaid Gift Card solution. Incurring 0 fees to game developers, we enable games to have more control over their revenue while fully utilising the power of prepaid gift cards. Through QGlobe’s plug and play SDK we make it seamless for games to implement their own Prepaid gift card programs effortlessly. Additionally games can also promote their gifts to QGlobe’s large gamer community through their Social Fi platform called Tilted.
In conclusion, prepaid cards have become a necessary part of the gaming industry, providing players with a convenient and accessible payment method while giving game developers more control over their revenue. The use of prepaid cards in gaming has a long history, and it has evolved to become a crucial part of the gaming ecosystem. Roblox’s success in using prepaid cards to power its gift cards shows the potential of this payment method in the gaming industry, and platforms like Qglobe SDK are helping other game developers replicate their model. With the continued evolution of the gaming industry, prepaid cards will undoubtedly play a significant role in the future of in-game purchases.