With the online video game industry booming, established companies and new players entering the market compete for your attention every day. While many offer similar features and run the same business model, finding a suitable company for your web shop or direct-to-consumer (D2C) venture can feel daunting. How do you choose the right partner with the right solutions for your needs?  Operational expertise is essential. Navigating web shop logistics, payments, and customer support can be complex. A partner with proven experience can streamline your operations and ensure a smooth customer experience. In this blog, we will guide you on navigating among companies that support D2C models and provide critical insights to help you find a trusted partner who can seamlessly integrate with your vision.

Why you need a gaming-focused MoR

To run a successful direct-to-consumer business model, you need a robust video game commerce partner to help with the back-end logistics. Companies that operate as your merchant of record (MoR) can do a lot for your studio. They take on all the legal responsibility and handle all ecommerce requirements, like fraud protection, tax remittance, local regulation compliance, managing refunds or chargebacks, and more. There are many MoR companies across the globe. Some are more generic and serve all business vertices and niches, while others are designed specifically for a particular segment. Our recent blog, Maximize Your Game Success: Why You Need a Game-Specific MoR, outlines key benefits of working with a gaming-focused merchant of record, like access to customized industry solutions and player-centric features. A gaming MoR:

• Offers diverse checkout options optimized for the games industry, taking into account different game types and player preferences
• Supports additional game distribution channels for in-game items and virtual currency
• Allows targeted messaging based on player demographics and buying behavior, leading to increased revenue and user engagement
• Ensures compliance with regional regulations as they pertain to the gaming industry, like youth protection and spending limits
• Has industry-specific tools, protocols, and triggers to prevent game purchase fraud and protect players, especially younger ones
• Employs gaming experts to assist players and buyers with specific gaming or payment issues and developers with integration, business development, and account management. 

But here's the catch: not all MoR providers are created equal. Their advantages, benefits, and features can vary greatly. You'll need some insider tips to compare established players and fresh newcomers to find the perfect fit for your video game business.

Global reach and alternative payment methods

It's important to check whether your web shop provider can offer global coverage and a catalog of relevant, in-demand payment methods. That way, you can ensure your customers can pay for your games and virtual items with their preferred payment methods and local currency. Statistics prove that 40% of players opt out of making purchases when they can’t use their preferred payment method.  Debit and credit cards have been the most used payment methods for years, making up almost 50% of the global payments landscape. But that's changing. Across the globe, especially in major gaming markets like China, Japan, South Korea, Germany, and Brazil, players increasingly turn to alternative payment methods (APMs) for their online purchases. Why the shift? Well, traditional bank cards aren't always accessible or convenient for everyone. By embracing the changing landscape of online payments, you can open your gaming world to a new wave of players. Here are some compelling stats:

• Big percentage of paying users. 90% of unique paying users in top geographies (China, Japan, South Korea, Brazil, and Germany) pay with alternative payment methods.
• From our analysis of Xsolla transactions, we've observed that after a new alternative payment method is offered, up to 30% of new paying users start using the newly provided APM. Around 10% of existing customers also switch from credit cards to APMs.

Why does this happen? There are many different reasons. Some consumers prefer to transfer their funds immediately (here, instant or real-time payment methods like open banking, Pix, and UPI step in). Other consumers seek security and want to keep their bank card details private (digital wallets solve this concern). In highly unbanked population regions, many customers simply don't have a bank account, debit, or credit card - and can only pay with cash-based alternatives (prepaid cards and mobile money payments can overcome these challenges). Lastly, another section of consumers desire payment flexibility to split their purchase payments into equal and interest-free parts.  Want more stats? Xsolla partners who have gone global with our 700+ payment methods have experienced the following gains in their business metrics: 

• An increase of 10-30% in conversion rates
• More than a 1000% increase in website visits per month
• Transaction count boosted to over 350k annually
• 200% increase in new customers

Past experience and partner portfolio

Remember, your new game commerce partner is a long-term investment. When you're evaluating a potential business partner, check their past performance results and suite of products and solutions. They are all good indicators of their current and future ability to support you with new and relevant opportunities and meet your needs as your own business grows.  Take the time to research their history and choose someone who has a proven track record of success. Review their client portfolio, use cases, and success stories. You can often measure a company's credibility by the quality and number of launched and well-performing campaigns and projects.  Companies that are brand new on the market might have perfectly made documentation but have yet to showcase successful launches. That is a risk you can take, of course, working with untested newcomers. At Xsolla, we've helped launch more than 185 direct-to-consumer web shops globally with our Web Shop solution. In fact, 40 of the top 100 mobile games have web shops powered by Xsolla. And on top of the APM-related gains, our Web Shop partners are also experiencing the following headways:

• 10-16% increase in revenue
• 40-60% increase in conversion rates from login to purchase
• 30-40% average capture rate 
• 60% of players making repeated purchases

Industry and team expertise

Products and solutions are not the only things you need to consider when you look at a prospective business partner. You also need to evaluate their team and their skills and capabilities. Look for companies that have industry experts in every department, from the back-end developers to customer and partner support to tax and compliance to design, etc. Every part of an MoR's business is crucial to its operational efficiency and ability to encompass and meet all your business needs. New companies sound exciting, promising quick solutions and nimble moves. However, they might be young and inexperienced, struggling with smaller teams and limited resources. While they can handle basic needs, complex situations with many clients or intricate projects may be beyond their capacity. Established companies offer the security of experience. Years in the market translate to ample resources, expertise, and established processes. They're better equipped to support growing demands, larger projects, and diverse client needs. Additionally, they invest in continuous improvement, ensuring their products and services evolve alongside your business. The Xsolla Web Shop team has 100+ people working diligently on the solution. Further, each Web Shop partner can expect a dedicated team of experts to handle their web shop launch, maintenance, and customer support:

1. Project Manager
2. Content Manager
3. Designers
4. Account Manager
5. Solution Architect
6. Integration Manager
7. Front-end and Back-end Developers
8. Quality Assurance Engineers
9. Technical Customer Support
10. Data Analyst
11. Live Operations
12. Growth Manager

Ultimately, the best choice depends on your needs. If you have simple, straightforward requirements, a new company might be sufficient. But an established provider with a proven track record may offer better stability and adaptability for complex demands and long-term growth. Additionally, it's worth noting that building the compliance part of global ecommerce (payment and industry) requires not only significant expert resources but also time. That's why new game commerce companies typically build their compliance services from scratch or opt-in with the services and solutions offered by third-party companies for a quicker solution. These third-party businesses might also have local expertise, covering specific territories, like US sales tax only, but don't ensure global reach. 

Beyond automation: The human factor in AI success

Finally, a word on generative artificial intelligence. Some folks are rushing to use AI tools like they're magic wands, hoping to instantly whip up games and websites or even run marketing campaigns. Sure, AI is fast, learns from tons of large datasets, and works super efficiently, but it's not a quick fix.  Remember: AI tools are best when they work alongside humans, not as a replacement for them. Think of AI as a helpful assistant, not a superhero. It can tackle tasks and projects and be a value-add layer, but it always needs a human eye to guide and review it.

In conclusion

Entrusting your web shop's success to a game-focused MoR is like comparing your game commerce partner to a fortress. You can choose a brand-new, hastily constructed fortification. Or, a citadel carefully created brick by brick over time and with years of expertise that can eventually help you build an entire stronghold around your game.  Look for a gaming-specific MoR with global payment coverage, a diverse and extensive client roster, strong industry experience, and a human element to guide automated services. From global payments to fraud protection and tax compliance, all the way to alternative distribution channels and D2C to supplement your existing game sales strategy, Xsolla has you covered. Create your free account to explore Xsolla's range of industry-specific tools today. If you want to learn how Xsolla can help reduce your workload and provide a customizable solution that allows you to publish your game across multiple platforms, contact an expert from our team.