If you’re a developer looking for investment then Xsolla has got your back. Likewise if you’re looking to break into the games industry by financing a future smash hit, then Xsolla knows where the smart money goes.
That’s the vision, and Xsolla has been busier than ever through 2022, helping to bring developers and investors together to forge new relationships and get post-Covid dev wheels spinning once again.
Whether it’s through apps, games, free-to-play, subscriptions, micropurchases, in-game purchases, NFTs, Web3 and beyond, they’re known for leaving no option on the table in order to deliver the best benefits for investors, devs and players alike.
We caught up with Berkley Egenes, Xsolla’s VP of Marketing to discover what makes Xsolla special and get a glimmer of where the future of games is going.
How would you describe what Xsolla does? Are you hunting for cool new property from developers, or looking for investors with cash to spend?
It’s a little bit of both. We want to meet new games and developers. Our matchmaking service allows us to line up a developer to an investor. We make the intro and we walk away. And then if they want to go to a crowdfunding or are looking for multiple investors, that’s when our game investment platform comes in and we help to put that relationship together. And our accelerator program is for young companies and developers who might need a bit more assistance through the process.
So it works both ways. People come to us, and then we find games that we want to go into. And sometimes based on the situation, we will take an investment and place it into a game. That’s our whole investment side of the house and we want to do more of.
So do you get people that are sitting on large sums of money and are simply looking for great games to invest in?
Sometimes, it depends on who it is. We build relationships, meeting with investors. We work with the big ones and we work with family offices that are looking to make investments. There’s a lot of people that are looking for non-traditional investments right now, and want to get in entertainment. They see the numbers and see the potential and want to get in on the ground floor on some of the games that are happening. We’re able to help facilitate that.
Say I’m a developer. How big do I have to be before I can come to you guys?
It’s not really a ‘number of people’ or ‘size of offices’ thing. Maybe it’s just three, four or five guys in a garage who need help. They know they have something really special, they just need to develop a pitch deck. They need some help. How do you do a vertical slice? How do you do a trailer? How do we put all this stuff together?
We get a lot of “Hey, it’s a concept” and that’s really hard for investors to wrap their heads around: What this game is going to be. When people are still working on the back of pizza boxes and napkins. I get “We needed to get funding”, well, you need to take it a level further. So just show, ‘here’s our concept’, ‘here’s our roadmap’, ‘here’s our vertical slice’. And you’ve got something legit right there. We’ve heard it from investors that’s what they want to see so that they can wrap their brains around it, and then put a monetization schedule to it. Then we can get into the program and start making intros.
And from the investors side. What do they look like?
We might be dealing with investors where it’s their first time getting into video games. They’ve heard that this is where all the action is where some money is to be made. So you need to make it simple for them. They’re maybe looking for specific genres or specific platforms that might fit into their portfolio. Maybe they want mobile, or console or PC and they want to stay in that platform. And there’s others that just want the coolest games, and they have no parameters.
Was Xsolla always a video games entity? Or did it start from the investment side?
Xsolla has always been in video games. Right from the very humble beginnings 17 years ago when our owner started the business.up. And it’s always been about how to pay for your game and how to monetize it. There are large multi billion dollar companies that we work with to monetize and process payments. Then, we have a lot of partners that come to us, and say, “Hey we’re based in Cyprus, but we want to go into Japan, Taiwan and Korea. How do we do that when we don’t have the capabilities to do that in house.” As a merchant of record we can process that transaction for them in multiple locations. So that’s where we started. From humble cash kiosks to the merchant of record business model that we have today. It’s been very successful and the reason I say it’s successful is because it successfully helps these developers go do what they need to do.
What is it that makes you guys different?
We’re in 200 plus countries around the world, 700 different payment methods, 130 different currencies in 20 different languages. We’re only in video games. There’s a lot of people in our competition that do B2C, they do consumer goods, they do other things. And they dabble in gaming. But we’re the only company from a payments perspective that has this reach. That’s our video game focus and that’s our passion. That was the commitment from our owner from the very beginning and we stayed true to that.
What are the investors that come to you looking for? What games do they want to see?
They just want to see an amazing game. An amazing story, with amazing content. They want to see something that’s not just a single platform. Okay, there’s some branding opportunity, there’s social content, there’s trailers, but there’s things that you can do to expand beyond just the physical game. They’re looking to invest in a brand and invest in something that has potential as it goes forward. And those are the fun projects we can engage in.
So is there is a subscription based model? Have you ever thought about a three tiered method? Looking in at an in-game store and in-game transactions as you go forward? Because a lot of times you need to decide that one on the upfront. And how do you monetize your game long term? That’s what people are looking for. And that’s our consultative approach that we take. We listen to what they want, what a developer is looking for, what investors are looking for and we can bring them harmoniously together and match that up.
And then our goal is to help make that game successful. Because if they’re not successful, we’re not. We don’t take a fee up front. That’s one of the differentiations. We take a small share of the transaction on the back end. So if an indie game developer does really well, then we’ll be successful only because of their success.
And you’re an international concern?
We want to make gaming available for everybody. Bringing these games to people in different regions that they never thought of. They never thought they’d be in India. Never thought they would be in Vietnam or different locations, and we’re able to make that possible. What kind of monetization methods to use. What’s hot right now. What features developers can put into games and make some money.
Is microtransactions where it’s at?
The microtransaction conversation is a hot one right now. The free-to-play model – obviously Fortnite was very successful – battle passes, subscriptions and in-game items. That one’s very, very popular. People want to replicate it, and figure out how to do that. But first of all you’ve got to have a great story. You’ve got to have great content before you have great gameplay. And that’s before you can get into the monetization side of it. Players only spend more if they’re going to play more. And so that’s the ultimate goal.
What would you say to a developer that knows they’ve got a great game, they’ve pitched to you, you think is good, and they say “We want to sell this at $4.99. That’s it. That’s all we want to do.” What do you say to those guys?
We would say“Explain that to us”. A lot of times it’s a resource thing and that’s understandable. We’ll say okay, there are different versions that are going to come out or upgrades that we can do with the game and monetize that into it. And that becomes the strategy. We support that. We’ll also provide different ideas and suggestions. Is it going to be once a year? Why don’t we do it quarterly? Once you set up that expectation and start that conversation with your audience we help you go direct to your consumer to share that message. That’s when you can potentially monetize your game even more, and turn it into a business.
If you were developing a game right now, what kind of game would you develop?
Good question. I would develop free-to-play. Actually I would develop a cross-platform free-to-play game. The genre does need not be specific, but I would go cross-platform. That’s one of my things. Games that are going cross-platform are very, very successful right now. They may start out on the PC and go mobile, they may be mobile and want to go PC or to the web. That also helps them get into specific regions around the world. We see Southeast Asia is very mobile, India, very mobile, Vietnam, mobile. Players in each of those countries want to play their content on any platform anytime, in any place. That would be my North Star. That’s what I would go after, but it is not easy and you will need some help.
How does the discussion regarding NFT and blockchain games go these days?
It’s an interesting conversation. If you’re able to sell NFTs from IP that you have in your game we view that as a way to extend your brand. And people can share their NFTs that they have acquired. They can just show off what’s going on, but they can also monetize that too. So we believe in it. In fact, right before GDC last year, we launched our NFT checkout where users can buy NFTs using their preferred method of payment, including fiat currency.
There are some that say, ‘I don’t want anything to do with it. It’s not in my strategy, it’s not my plan’. There are others that are all-in and they want to be in the NFT space. Phase one was launching the NFT checkout about six months ago. And then we’ve got phase two coming up very, very soon, of what we’re able to do, to help those developers out.
So we’re believers. We have a whole other side of the business that’s all Web3 technologies. NFTs, tokens, drops, things that we’re looking at. And being able not only to do that within gaming, but in the entertainment space as well, to bring those worlds together. There’s a lot of big money people involved that want to be part of the gaming industry right now and NFTs and digital items are a way for them to expand their reach and brands within the space.
Everyone likes the idea of interoperability between games. Perhaps the NFT blockchain side has been miscommunicated.
I completely agree. It’s a little bit wild west right now. I think the education has improved but I think we still have a ways to go to get to the masses and to cover that around the world, so that people can understand what’s really going on. Then, what’s the application to gaming? And how do brands companies leverage that to extend their brand and make money?
You mentioned Web3. Where do you think all this is heading?
I think Web3 – when it’s done correctly – is the vehicle to make this all happen. It’s the next iteration of what is possible on the internet. Where it’s come from, from the early 90s, to where it is today. That rate, that velocity. It’s mind blowing.
What we’re seeing more and more of this also with super apps and content and things that you can do within one’ device and app. The telecoms, the ISPs, the airlines are doing a really good job of this right now. You can say ‘I’m about to go on a trip to Asia’ and I’m already getting hit up with ‘Here are the restaurants you need to go to, here’s the offer, here’s the movie. Oh, by the way, here’s a game you should play which is super cool’. You can do literally everything. You can order food, you can book a hotel, you can book a flight, you can buy clothes, you can download a movie, you can play a game, buy a game, monetize a game.
Those things are going to start coming together and it won’t be just about ‘what’s the utility of it’ but ‘what’s its entertainment angle’ too. How to use that device and app for multiple things? That’s where it’s going to go.