According to the figures disclosed in the China Games Industry Report 2020, the actual sales revenue for overseas markets of China’s self-developed games in 2020 amounted to USD 15.45 billion, which is equivalent to nearly RMB 100 billion. This is the first time that China’s games industry in the overseas market has reached the RMB 100 billion mark.
What is more striking is the growth rate: China's outbound games business grew by 33.25% year-over-year in 2020 compared to 2019, while the growth rate increased by 12.3%. Against the backdrop of the rapid growth in China’s outbound games, Xsolla, a behind-the-scenes leader in the industry, surfaced and the name began to be of interest to Chinese game developers.
Revenue, revenue, and revenue! No matter how well-conceived a developer’s ideas are and how refined the game is, the product will ultimately be converted into revenue to realize “the thrilling move from goods to money." Xsolla’s core business is to help game developers and publishers find the most efficient means of user payment in different markets overseas, and help them collect their revenue more smoothly.
Every ship that leaves for the sea must be equipped with a reliable anchor. Only when the ship has an anchor can it be stationed and fish in peace. For game companies targeting overseas markets, Xsolla is that anchor for their ship.
In 2005, Xsolla’s predecessor, 2Pay, was established in Russia. It provided payment services mainly through local payment methods such as cash, prepaid cards, money orders, electronic wallets, etc. During the initial period of the company’s establishment, it mainly targeted local Russian game developers and publishers. Since the addition of PayPal and SMS payment options, 2Pay covered the entire CIS market and started to expand its global business.
In 2010, 2Pay moved its headquarters to California, USA, and the company changed its name to Xsolla. To date, Xsolla has provided world-class cross-border payment solutions for over 1,500 games from over 1,100 game companies worldwide, covering over 700 different payment methods in over 200 countries and regions.
In 2020, as outbound Chinese games were thriving, Xsolla officially began to operate in China and established an office in Beijing. In August 2021, Chris Hewish, Global President of Xsolla, was interviewed by the Chinese media and discussed in depth several aspects of the gaming business that concern Chinese game developers. A veteran of the games industry, Chris Hewish has had extensive experience in development at the world's largest gaming companies, including Activision and DreamWorks, and was the head of Survios, a renowned VR gaming studio.
Reporter: In 2021, the size of the global game market was close to USD 200 billion, of which the size of the mobile game market was close to USD 80 billion. What is the role of Xsolla in global game payment services?
Chris Hewish: Game payments may not be the first thing that comes to mind when you think about game development, but they are an important part of the entire games industry chain. As a commercial product, only when you collect revenue from users can the development finally be considered a closed loop.
But the process of collecting money from users is no trivial matter, as it involves complex dealings with local banks, tax authorities, and government regulatory authorities. So for us, it became necessary to set up a special company to help game developers handle payments.
For the 15 years since its founding, Xsolla has been focused exclusively on game payments. As a result, we have built the most extensive game payment infrastructure in the world. As described on our website, Xsolla covers more than 700 different payment methods in over 200 countries and regions, which covers over 20 different languages and over 130 different currencies.
You can consider that a significant portion of the 200 billion US dollar revenue from the global game market is channeled through Xsolla to the accounts of various, large, and small developers. By doing this, Xsolla facilitates the prosperity of the game development ecosystem.
Reporter: Xsolla provides payment services to the global game market. What are your service advantages and competitive barriers, and what are the key factors?
Chris Hewish: In terms of payments, Xsolla is a qualified leader in the global games industry. First, Xsolla has the most comprehensive payment method and coverage, which allows any game developer to work with us wherever they want to do business.
Second, we have PayRank technology, which is unique and can provide smart payment options for users according to various parameters such as location, payment history, game genre, currencies, etc. Among the 700 alternative payment methods, the user will be provided with the best local payment option through the assistance of artificial intelligence.
In fact, game developers need a comprehensive one-stop service based on payment methods. Collecting revenue is not only a matter of passage, but also a series of related issues, such as compliance, after-sales, anti-fraud, and so on. Xsolla’s expertise and service on these related issues are the most comprehensive. Xsolla has focused exclusively on the video games industry from the beginning. We’ve never stepped into other industries such as retail, and we’ve partnered with thousands of games worldwide. We’ve helped many games to grow to be strong on a global scale, and we’ve accumulated numerous experiences and responses during this period. All of them contribute to Xsolla’s partnership with game developers today.
It’s worth mentioning that Xsolla’s services are provided at no upfront cost. Xsolla only receives a portion of the revenue that a partner earns. This approach enables us to always serve our partners with a high sense of ownership and responsibility.
Reporter: How is Xsolla’s business in China? How should a game developer work with Xsolla if they want to explore overseas markets? What advice do you have to give them before they prepare to enter overseas markets?
Chris Hewish: In China, in addition to working with top developers such as Tencent and NetEase, we’re also working with more and more small and medium-sized developers who also hope to go overseas. Xsolla attaches great importance to communication with partners, so we set up offices in China to better serve developers, locally.
In China, our scope of work is not only limited to daily business operations and customer service, but we also conduct educational events for Chinese game developers. For example, Xsolla organized a special event at ChinaJoy this year to help Chinese developers expand the global vision of their gaming business.
In the process of expanding into overseas markets, it’s necessary to have some basic understanding of local payment trends. In Brazil, for example, few players have credit cards. Therefore, if a game developer wants to enter the Brazilian market, they limit their success if they only distribute through channels such as Apple’s App Store, which only accepts credit cards.
For game developers in China that want to expand to overseas markets, I suggest that they listen to the various stories of the target market and talk to experienced friends and consultants in the industry, such as Xsolla, before they start. We don't necessarily tell developers what the final solution is, but we can definitely give Chinese developers more information that will help them make better decisions.
Reporter: Xsolla not only provides payment services to the games industry but also helps game developers find investment. Could you describe Xsolla's investment strategy and services? For the vast number of game developers in China, how should they pay attention to Xsolla’s investment opportunities?
Chris Hewish: Xsolla has a Funding Club with approximately 200 members, including investors and publishers. In this club, Xsolla recommends quality games based on investors’ interests, and lets the investors negotiate with the developers themselves. Our funding services are completely free to support the development of great games. So far, more than 50 game developers have completed financing ranging from several million dollars to over 10 million dollars with our help.
We’ve also launched another platform recently for co-investment. When the development of a game nears completion, they may need additional financial assistance. Xsolla evaluates the game and negotiates investment terms for other investors to make co-investments. The investment itself is on the revenue of the game, and not on the developer or the company, so the return on investment can be quick.
Reporter: The whole Chinese-language game market has huge potential, and the number of Chinese users on Steam has already surpassed those of other regions. Does Xsolla have a clear initiative to guide and support global game developers to create games that target Chinese users?
Chris Hewish: Of course, we also have the goal of helping overseas developers get quality games into China. On one hand, to enter the Chinese market, game developers worldwide must also have a payment system suitable for Chinese users, which is precisely what Xsolla’s basic core function is.
On the other hand, for global game developers to succeed in the Chinese market, they also need to cooperate with Chinese publishers and local developers. Xsolla can help them build relationships for linking and cooperation.
Finally, while Xsolla may not be able to do everything, we can connect you with our partners in the industry who can help you accomplish your goals. And at Xsolla, all of you are our friends.
For more info on Xsolla, visit https://xsolla.pro/china, or contact our team at email@example.com.
Contact Person: Anthony Mendoza
Telephone: +1 (818) 435-6613
Location：Los Angeles, CA