Exciting articles several times a month
29 September 2016
Our today’s guest is Aleksandr Agapitov, founder and CEO of the US-based global payment services provider Xsolla. The company offers a wide selection of monetization solutions for forward-thinking game developers and publishers, making it easy to accept in-game payments online and do business worldwide.
Could you tell us more about your company? What makes Xsolla different from the competition?
Xsolla is a video game publishing and distribution suite. We only work within the video game industry. It’s what we love and we wouldn’t have it any other way.
Does your company’s name have any special meaning?
To create the name we worked with Art Lebedev design studio, one of the best design studios in Eastern Europe. As our passion is gaming, the design of our logo took inspiration from console controller designs. (The name itself doesn’t carry any special meaning.)
Why did you choose game developers and publishers as your target customer base? Are you planning to offer payment solutions across other industries, like e-commerce?
Video games are unique because of the instant digital delivery of the product, and the need for worldwide availability. Customers (gamers) expect games to be available worldwide on day one. The challenges that come with these needs interested me and drew me in. Of course it didn’t hurt that I am a gamer myself.
As for expanding into other industries, we think it’s best to focus on doing one thing extremely well. Fortunately for us, the gaming industry continues to expand dramatically, providing fresh opportunities every day for our own business to grow.
Do you work with all companies willing to pay for your services or you have some special requirements that they need to match?
We are happy to work with all video game companies from AAA to two-man independent teams. We choose not work with any gambling or adult content games.
Do you work with mobile game and app developers? What payment options they can’t use in comparison with PC game developers?
Of course we love working with clients on all platforms, including mobile games and app developers. Licensing and relationships notwithstanding, you can use all payment options on any platform using Xsolla’s system.
How much time did it take to make your first deal and what was the interaction like?
I built the first version of the system, developed the first agreement template, and negotiated the first deal with combats.ru in ICQ by myself in 2006. The entire process took me about 6 months.
What countries do you operate in? What was the most difficult foreign market to break into?
Xsolla Inc. is headquartered is in Los Angeles, and we are also represented in Europe and the Asia Pacific Region. Our strategy for entering new countries is always driven by data. We don’t blindly step into new markets, so I wouldn’t say we’ve ever had difficulty breaking into a particular foreign market. Xsolla has a great team of legal and financial professionals who take time to research and master the particular payment, taxation, and publishing rules of every new territory, so we always know what we’re getting into beforehand.
What was one of the nicest things a client ever said about your business?
“We can’t work with you because it would mean we need to fire more than 50 people including me.” – said by a payment manager from what used to be one of the biggest game publishers.
Xsolla offers over 500 different methods to make payments, from Bitcoin to Subway gift cards. How do you find all those innovative payment solutions? Are credit cards still the most popular payment method?
We listen to game developers’ expectations and needs, user feedback, and closely analyze user behavior data. Providing a huge quantity of payment methods is not the hard part. The hard part is ensuring that all of our users’ experiences are as smooth as possible, whether they’re using a subway gift card or a credit card. Every type of purchase requires a special experience – microtransactions need easy one click payments for second purchases; subscriptions need to be recurring payments or auto invoicing; for physical goods we need payments to integrate with the shipping address. When it comes to the video games industry, the pie chart of payment options is substantially more fragmented than traditional e-commerce businesses.
How much money does the average gamer spend each month on in-game purchases? What are the latest trends in selling techniques?
A big trend right now is expanding on the daily reward concept. The user buys a digital bundle for a heavily discounted price, however, the items in the bundle are dispersed over many days. They need to login daily in order to claim that day’s digital items. It’s an interesting combination that solves two problems at once – monetization and user retention.
Another trend is a digital reward drop, rewarding streaming gameplay. The quality of the drop can be tied to the number of viewers watching the stream per minute. It’s a great way to encourage influential streamers to help market your game.
Is it true that Mac users tend to spend more money than Windows users?
This is not true. Mac has less market share, less content, and is less popular in the hardcore gaming community.
Do you play games in your free time? What are your favorite ones at the present moment?
I play around four hours a day, 4:30PM – 6:30PM at the office and 9:30 -11:30 at home. I download and launch most new games, but I spend a little more time on global blockbusters like Overwatch, Dota 2, and Battlefield. Our office mainly loves competitive multiplayers, where we can play on the same team. At home, I stick to calm and peaceful games like GTA and Hitman.
Do you still work on Capsidea, a data visualization and analytics platform? Can you tell us more about this project?
We rebranded it to slemma.com. It’s a data sources aggregator, bringing in data from the many places and formats it’s stored in, and displaying it in easily understood, live updating charts and graphs. We’ve had some challenges, however, it’s an amazing product and adoption is growing. I feel confident about its future.
Where do you see your company in 5 years?
In five years? I see our company being the number one brand video game companies come to when they want to distribute their products and reach users on a global scale. We already have the power to distribute globally, but our main goal in the next five years is to be the number one choice for AAA & indie developers to get their game in the hands of the millions of passionate gamers across the world. And of course, still right here. We just signed a 10 year lease in a Sherman Oaks executive tower.
What is that one piece of advice you would share with upcoming startups in the Fintech industry?
The one piece of advice I would share with startups in the Fintech industry is to find something that you are truly passionate about and run with it. My passion, since I was young, was video games. I took hold of my passion and found a way to make it my everyday life. The more passionate you are for the industry you go into, the more success you will have because you will work harder to keep your company going, understand your consumers better, and be able to pursue different avenues that you would not have otherwise considered.
Exciting articles several times a month