Video gaming is just the tip of the iceberg when it comes to eSports, which has become a big global business — a form of rivalry in which supremely skilled players are rewarded with cash prizes.
Those eSports firms support competitive versions of multiplayer games like Call of Duty and Fortnite, with some matches being played in front of tens of thousands of fans. The sector is on track to exceed $1 billion in revenue by the year’s end — a 14 percent rise from $947 million in 2020 — after experiencing robust growth in viewership over the past 15 months. More than 75 percent of this income is expected to stem from sponsorships and media rights.
The industry’s success has attracted everyone from venture capitalists to Fortune 500 companies. It has even garnered the attention of celebrity investors, including singer and actress Jennifer Lopez and Canadian rapper Drake. As the industry’s star rises, so do the prize payouts for the professional players who take part in online and in-person tournaments.
Epic Games, creator of Fortnite, said earlier this year that the game’s competitive space will have prizes totaling $20 million for 2021, up from $17 million last year. The 2019 Fortnite World Cup featured an even more staggering prize pool of $30 million, with each of the 200 players who qualified for the event taking home at least $50,000.
Given the industry’s popularity and the enormous amounts of money at stake, the efficient distribution of prize payments is fundamental to keeping players satisfied. Issuing quick payouts for these fast-paced games has proved challenging, however. It can be costly and slow-going to send prize money via wire, ACH transfers and even paper checks, and such payments are routinely delayed. Manual payment processes make it impossible to get prize money into winners’ accounts instantly, and many traditional methods may not work for winners who lack bank accounts. Players’ disbursements must also be converted into their local currencies, which further complicates the process and increases the cost of paying out winnings for global tournaments.
The following Deep Dive examines consumers’ desires for faster digital payment options in the eSports and online gaming space as well as the challenges platforms can face in swiftly sending them their winnings. It also looks at why instant digital disbursements could be key to keeping them engaged and satisfied when gaming online.
Digital Platforms Present Solution To Slow Payments
One solution to the eSports payment conundrum is digital payment platforms that offer quick access to prize winnings through several methods. These can include options such as bank deposits in local currencies, Venmo, PayPal, branded prepaid or virtual cards and debit card transfers. Networks geared toward fast or instant digital payouts can simultaneously handle thousands of prize payments and even permit winners to track and receive their transfers online or on their mobile devices. This functionality is also important because many eSports players hail from younger demographics, which typically value digital funds transfers.
Silvana Hernandez, senior vice president of Digital Payments at Mastercard, told PYMNTS that online gamers and gamblers are coming to demand more convenient, secure and seamless payment experiences that improve their lives. She said that the pandemic has accelerated the adoption of instant payments because consumers have come to expect the function as part of the gaming process, making it integral to the end user experience. Hernandez said the shift is happening not just in gaming but across many verticals, including peer-to-peer (P2P) payments, insurance disbursements and loan payouts.
Even as the pandemic abates, Hernandez said customers are unlikely to lose their desire for faster payouts in gaming or other sectors. Mastercard estimates that the U.S. gaming market is valued at $120 billion and is only growing. This means that faster payouts are advantageous for merchants as well as consumers because they provide an opportunity for businesses to modernize how they interact with their customers and establish themselves in a booming market.
International eSports Prize Payments Made Easy
Ensuring that winnings can be seamlessly paid out to gamers worldwide is the other part of the eSports payments equation. Live tournaments are held online and take place globally, and organizers must distribute players’ winnings in the appropriate legal tender. For the most part, tournaments are required to provide payout options in various currencies, but this can be a challenge for gaming organizations that hold international tournaments. Digital payment platforms promise to eliminate the difficulties associated with the prize money distribution, however, by offering speedy, frictionless and efficient payouts.
In-game currencies could also have a place in gaming’s future. Epic Games and other platforms have introduced currencies that can be purchased via said platforms or elsewhere. Fortnite features V-Bucks, for example, which can be spent on various items in the game. While such solutions are not technically considered eMoney or currencies, players could eventually opt to receive their winnings through these methods, which would give them yet another digital choice.
Digital gaming is an intriguing option for consumers. The greater numbers of consumers taking part in gaming activities are likely to have an impact on the space’s future and could direct more people to consider digital platforms as well as instant digital disbursement methods in the years ahead.