With gaming experiencing a huge boom in popularity over the last year, so has the gaming payments industry. In-game purchases of skins, items and other micro-transactions have ramped up, and so has the need for streamlined payments.
Someone who knows a lot about this is Evan Heby, Sr. Manager, Partner & Industry Marketing at Tipalti, a provider of end-to-end accounts payable software to automate the entire supplier payments operation.
Here Evan recounts a conversation about the gaming landscape, and how payments can make or break an esports business.
At the end of last year, I had the pleasure of sitting down with Chris Smith, Founder & Director of BIG Esports, to discuss the overall gaming/esports landscape. We discussed everything from how Chris got his start in gaming to emerging industry trends and the direction the sector is heading over the next few years. We were lucky enough to be joined by Greg Kampanis, formerly of Enthusiast Gaming. Greg provided insight into the state of finance in gaming and how businesses can leverage content to build their brand in the sector. These are a few key takeaways from the conversation and the reasons why streamlining payments can improve your business overall.
Chris got his start in gaming about 10 years ago. He’s done everything in gaming—from being a gamer himself to broadcasting tournaments and much more. Today, he’s pivoted to focus full-time on running his consultancy, BIG Esports, where his team’s mission is to raise the bar in the esports, gaming, and technology industries.
Today, esports is about a $1.1 billion industry, which only makes up about 1% of the global gaming industry. According to Chris’s research and information from companies like PWC, esports is reaching a 10%+ compounded growth rate in some regions, which is entirely unheard of for many other industries.
Impact of Content & Influencers
“Over the last few years, viewership of gaming content on all platforms has just exploded—whether that’s Twitch or YouTube.”
As the old saying goes, content is king. That sentiment holds true when it comes to the esports world. Building your esport team’s brand through content is one of the best ways to increase your team’s visibility. It is also a great way to create new revenue streams and monetize the team’s efforts beyond winning tournaments.
For Enthusiast Gaming, their team has “ten shows on Snapchat and gaming content on Facebook—and the appetite of the audience is getting bigger.” Moreover, COVID has impacted engagement with content for Enthusiast, and the team is seeing “some channels [with] 40-50% viewership growth YoY.”
Payables Challenges in Gaming
With many of his clients, Chris stresses the importance of financial literacy to help scale your esports/gaming business. In the gaming world, the sheer number of international payments you’ll need to process as you start to grow is outstanding. Ensuring that you have a solution for managing cash flow is critical to your success: “Payments is a key area that esports teams need to keep an eye on. With the growing complexity and ‘globalness’ of esports, it’s crucial to understand what you need to do to ensure you get paid.”
For Enthusiast, “payments are an important thing on the influencer side” because it can be an advantage over your competition. Ensuring a seamless payout experience for your influencers/partners/suppliers/etc. will often be a reason why your team can retain top talent or be one of the areas that can hurt your reputation and discourage current partners (and new ones) from working with you down the road.
The Future of Esports
In 2021, the esports industry will continue to grow rapidly, and businesses that organize their back-office finance/accounting functions will have an advantage over their competition. Tipalti is trusted by gaming companies like Twitch, Roblox, Enthusiast Gaming, Esports Engine, and many more. Tipalti is a Hebrew word meaning We Handled It. Our mission is to support gaming businesses of all sizes by eliminating up to 80% of their manual payables workload.