PayPal Research: Surging Hong Kong Gaming Sector Drives Digital Goods Market
Nearly Half Of Hong Kong Gamers Play Daily As The Sector Is Fast-Becoming A Substantial Business Via A Growing Ecosystem, Digital Payments, The Rise Of E-Sports And Government Backing.
September 13, 2018, Hong Kong ― PayPal today revealed that gaming is fast-becoming a substantial business sector with the company’s gaming revenues increasing by more than 23% in 2017, accounting for more than US$12 billion in total payment volume globally. The PayPal 2018 Global Gaming Research showed nearly half (48%) of gamers in Hong Kong play online or mobile games every day, compared to 39% globally. This is just the latest sign of accelerated growth in Hong Kong’s gaming market with PwC predicting annual revenues in the Hong Kong gaming industry to reach US$1 billion (HK$7.8 billion) by 20211.
The surging market has been fueled by improved access to gaming, a growing ecosystem driving a multitude of gaming transactions and related digital goods, together with the growth in seamless secure digital payments that facilitate a fast, simple and convenient payment experience for gamers everywhere.
The research highlights some of the spending trends of Hong Kong gamers with console gamers revealed as the heaviest spenders in Hong Kong. The PC and console audiences comprise of more males than females and also those with higher average incomes – the data shows this group are a dedicated audience and willing to pay upfront for the latest games.
Average spent on game downloads every three months: HK$496 (Console) vs HK$221 (PC/Mac) vs HK$134 (Smartphone/Tablet)
Average spent on in-game content every three months: HK$224 (Console) vs HK$200 (PC/Mac) vs HK$182 (Smartphone/Tablet)
This study was conducted between February and March 2018, in partnership with SuperData Research, across 25 markets2 with approximately 25,000 active paying gamers globally.
Hong Kong’s Gaming Sector Gets Serious
“The worldwide explosion in e-commerce activity has clearly extended to transactions of digital goods and gaming in particular. We project Hong Kong to quickly realize its vast potential in turning gaming into a substantial industry and business sector,” said William Ip, Director, PayPal Hong Kong, Korea & Taiwan. “Hong Kong’s surging gaming demand is being supported by the rapidly evolving ecosystem which is enabling greater access to games, more seamless gaming transactions and an extended market of related goods and services.”
The gaming sector is getting a significant boost in the shape of an HK$100 million government fund to create spaces for gaming events and foster industry development programs in Hong Kong, while Hong Kong Cyberport is committed to building the required ecosystem to support a flourishing e-Sports industry.
“There are encouraging signs for gaming and e-sports but to fulfill this potential requires creating a better understanding among the wider public on how gaming is an emerging industry and is not merely an entertainment for the youth,” said Terence Leung, E-sports Lead and Youth Team Lead at Cyberport.
“Market maturity is growing as we see an extensive support network emerging with gaming providers, technology enablers, gaming-related product companies as well as critical e-commerce enablers such as digital payments players, which all add to greater levels of professionalism. We are confident that the development of the gaming and e-sports industry in Hong Kong will grow local talents and create job opportunities.”
One of the key ecosystem players Sony Interactive Entertainment (SIE) is gearing up efforts to promote e-sports and gaming in general as a serious professional sector. “SIE foresees major growth opportunities through multiple revenue streams as consumers are showing huge appetite for in-game purchases, related merchandise as well as the obvious hardware demands to create a modern complete gaming experience that goes beyond the games themselves,” said Jacqueline Chiu, General Manager, Marketing Communication & Network Business Department at Sony Interactive Entertainment HK.
Gaming Is Cross-gender And Cross-generations
The PayPal research also highlighted how gaming is growing new audiences that go beyond the traditional assumed demographic of the young and male gaming population. In Hong Kong, 53% of female gamers play video games every day, compared to 43% for male gamers. While gaming is sometimes assumed to be for the younger population, mature gamers (aged 35 or above) were found playing as often as younger gamers (aged 18 to 34) with over 90% of gamers saying they play video games at least once a week.
71% of women gamers reported using smartphones or tablets for gaming most often, compared to 17% for console and 11% for PC/ Mac
Among gamers who play most on mobile devices, 2 in 3 are women Action and Adventure games are most popular among Hong Kong gamers
Male gamers in Hong Kong love action games the most as 48% said they have downloaded or played an action game in the past three months
Female gamers prefer puzzle games, 45% have downloaded or played a puzzle game in the past three months
Both male and female named PlayStation and Nintendo their favorite two gaming brands in Hong Kong followed up by SEGA
Digital Payments A Key Cog In The Wheel
One key area identified as a major enabler of ongoing growth is the growth of digital payments. “Faster, easier and secure online transactions whether in-game or game downloads will be critical to creating seamless end-to-end customer experiences that gamers demand which providers of gaming goods and services must be mindful of,” said William Ip at PayPal.
The research found that 70% of consumers in Hong Kong select their payment method because it is ‘easy to use’. Over half of Hong Kong customers would quit the online transaction if their preferred payment method was not available, while 35% quit before finishing a transaction for a digital game or in-game content because ‘the process was taking too long’, compared to 27% for global respondents. Finally, 4 in 5 gamers in Hong Kong are open to changing payment methods, with convenience and security being the most critical requirement.
This growth in gaming activity adds to the need to protect consumers in this surge of online transactions. In Hong Kong, PayPal announced its Seller Protection Policy had expanded to cover not only intangible items but also eligible digital goods, such as gaming, music downloads, and video streaming, providing a greater peace of mind for thousands of digital merchants when consumers make online transactions. PayPal’s Seller Protection can cover the following situations: unauthorized chargebacks or ACH (Automated Clearing House) returns, unauthorized claims, unauthorized fraud reversals, items not received chargebacks, etc. In such situations, PayPal will cover the full amount of the eligible transaction and waive the chargeback fee if applicable, provided their terms and conditions are met.
Besides, with PayPal One Touch, consumers can enjoy faster and secure checkout without the need to type in their password, billing, and shipping information, enabling a more seamless and convenient payment experience.
1 PwC: E-sports – New horizons for Hong Kong and the World. Slide 9-10.
2 The 25 Markets include Argentina, Australia, Brazil, Canada, China, Czech Republic, France, Germany, Greece, Hong Kong, Hungary, India, Israel, Italy, Japan, Mexico, Netherlands, Poland, Russia, South Africa, Spain, Sweden, UAE, United Kingdom, and the United States.