The array of monetization strategies in the video game industry is varied and expanding, and that means the risk associated with traditional payment methods is expanding as well.
Think about it: It’s been a long time since the only costs involved with video games pertained to the console, the controllers and the games themselves. Today’s digital video games feature many ways to lure gamers into opening up their wallets: microtransactions, downloadable content, gaming subscriptions, etc. Gamers, however, can’t purchase these digital offerings—and those that we’ll see in the future—with cash. Traditionally, this is where credit cards come into play.
Now think about that credit card in the hands of preteens—a demographic that is projected to account for just shy of $2 billion in digital game spending this year. And what’s more, that spending is going to keep growing over the next four years.
Kids want to purchase digital game content like outfits in Fortnite, but it’s unlikely that parents will simply hand over a credit card when their children start playing video games. It’s feasible, however, that parental scrutiny over their children’s credit card transactions declines over time, which is a recipe for big headaches: unapproved charges, stolen credit card data, even identity theft.
Surprisingly, some parents aren’t aware of the wider range of game payment options available—options that mute the risks associated with credit card transactions and alleviate the challenges children face when they’re given cash or gift cards that can only be redeemed at brick-and-mortar stores.
Unlike older kids and adults, preteens don’t rely on a fixed amount of money that they set aside each month for video games. Not surprisingly, parents are the primary funding source for preteen gaming, and the parents primarily give the money to their kids as gifts (68%) or as a reward for good behavior (62%). There are those, however, who give their preteens money for gaming as part of a regular allowance (46%).
Given the sporadic nature of how preteens spend for gaming, game makers can’t rely on recurring transactions when trying to appeal to preteens. That said, Netflix-style subscriptions are favored by parents (67%), followed by upfront game purchases (64%), as these for-a-fee options are relatively traditional in terms of what is being purchased. When it comes to newer monetization strategies, such as loot boxes and energy boosts, parents are less comfortable.
Preeteens 7-12 spend more on in-game content than they do on the actual games. That means the gaming industry needs to identify what makes parents uneasy and make efforts to ease their concerns—particularly as newer monetization strategies gain in popularity.
The upside for the gaming industry—even amid some negative press about newer monetization strategies like loot boxes—is that parents generally have positive attitudes toward gaming. Parents are also accepting of their children’s gaming habits, with more than 70% agreeing with most positive sentiments pertaining to gaming.Additional insights into the next generation of video gamers can be found in Nielsen SuperData’s new Preteen Gamers report.
The insights in this article were derived from Nielsen SuperData’s preteen gaming study, which was conducted in September 2019.
- Parental data for this study was obtained through an online survey of 1000 US parents conducted from Aug. 22 to Aug. 27, 2019. Qualified respondents had at least one child 7-12 years old who played video games at least once a week, and respondents had to monitor their kids’ gaming habits regularly. Qualitative insights from preteen gamers were obtained from in-person focus groups conducted in New York City from Sept. 4 to Sept. 11, 2019. Qualified participants played video games at least once a week: 50 participants were 7-9 years old and 50 were 10-12 years old.