We caught up with Chris Hewish at a hectic Devcom for all the latest news from Xsolla, their take on where the world of webshop innovation and app payments are heading and his hopes for even better business in the future.
PocketGamer.biz Interview with Chris Hewish
So how do you find Devcom and Gamescom? What are your aims for being here at the show?
Chris Hewish: Well, being here really caps off our latest releases that we’ve been talking about. Approximately every quarter, we do a release week where we announce new products, new features, new partnerships, anything that might be of interest to our partners. And then usually that is around the time of some sort of major event as well. So we like to go into the event and evangelize the new stuff as well as our current slate of products and solutions.
We’re a sponsor of Devcom and we have a number of tracks where we do panels or presentations. And then we go into Gamescom where we do a lot of the business development meetings one on one.
How’s the last six months been for Xsolla? What’s exciting and what’s been a success for you?
Chris Hewish: So the last six months have been good. Really good. We’ve been ahead of the curve on bringing new partners and projects on board. We’ve continued to see a lot of strength with our webshop business. That was something that we launched about a year and a half ago now, and that is a solution that allows mobile game companies to spin up a presence online and do a lot of their commerce with their players through these webshops.
The thing we’re really seeing happen now is that the webshops are starting to evolve into community hubs. That’s really something that you’ve seen on the PC side of gaming for a while, but mobile gaming really hasn’t had that, right? So it’s pretty exciting to see that development and expect to see more of that in the coming six to 12 months.
We’ve been ahead of the curve on bringing new partners and projects on board.
Elsewhere we’ve got our new parental controls, where we partnered up Privo. And that was in response to the past six to 12 months of government and societal interest in parental controls around kids and gaming. Obviously, we’ve had game ratings and age checks for quite a while but it’s something that hadn’t been particularly top of mind for a lot of companies.
It’s a real, full suite, not just, hey, we put a age gate option in our pay station or launcher. We really put a full stack of privacy controls for parents and guardians in there. There’s a changing landscape as regards the use of in-app purchases and the familiar gatekeepers are diminishing in their dominance and their relevance.
How do you see things progressing on that front? The volume of avenues that people are going to have and the means to which they’re going to be able to make payments. Where do you think we might be in six months time?
Chris Hewish: Look, it’s always changing, right? Let me take a step back. Having been in the industry for so long, remembering way back to the game ratings and how that all came about. I think any time that an industry can get ahead of regulators and introduce tools that allow them to self-regulate, that’s a good thing.
It’s healthy for the industry, and it can help us avoid getting to a point where, if people keep their heads in the sand, then eventually regulators will take action to mandate certain things even more strictly than might be good for business.
And cryptocurrency and Web3 just make payments and privacy even more complicated…
Chris Hewish: And crypto? I mean, gosh, that opens up a whole new vector of how people can pay and how do you even verify at that point if they’re a minor or not? So getting ahead of it, I think, is important and it’s healthy for the industry.
How does your deal with Crypto.com work for you guys? What does the connection bring?
Chris Hewish: Really there’s a couple of things. We’ve been looking at crypto for for years now, but we’ve been very cautious in our approach to integrating different crypto currencies into our payments API because even though we are not a payment processor, we’re a merchant of record. We still work very closely with banks, major credit card companies, and we never wanted to do anything that would inadvertently run afoul of those companies. So we’ve been looking at this for quite a while. We integrated Bitcoin were pretty slow and cautious and that led us to thinking, okay, we know this is legitimate now, we’ve seen enough going on we’re hearing enough from our partners. The Web3 landscape is kind of through that initial craziness, and we’re getting to the point of where we may start to see legitimate products or games releasing that take advantage of the technology.
It gives us access to 80 million crypto users and really helped open the door for us to be able to work with Web3 creator communities.
So now really is the time where we need to figure out how we can engage with that space in a way that protects us, protects the customers, and offers the greatest range of options for all of our players and partners. So that led us to looking for a partnership, and Crypto .com kind of quickly came up as a company that are doing this right. They’re doing everything above board, they’re not cutting corners and we know we can safely engage with them, not only for ourselves, but also for our partners and our players.
And it gives us access to 80 million crypto users, expanded all of the payment methods that we were making available, and just really helped open the door for us to be able to work with Web3 creator communities.
What’s your take on the pressure on App Stores to make changes? I was thinking back at when the Apple App Store started and they introduced the 30% cut. What was your take back then? When you first saw 30%, did you think that was outrageous at the time?
Chris Hewish: You know, having been in the industry for so long and understanding margins and the cost of doing everything, and honestly looking at it… When I heard 30%, it just made no sense, right? Because the margin, you know, at the time, unless you had a big breakaway hit, you were dealing with 8 to 12% margins in a lot of cases for companies. And I just thought ‘how are you going to reconcile 30%?’
Obviously, it makes sense when you look at free to play and doing things at a massive scale but honestly, that success kind of hid how just big that 30% ‘tax’ was, that 30%. Sure, it made sense maybe early on when the infrastructure was new, when the App Store was small, the size of market was unknown, and they were introducing a whole new ecosystem.
Obviously, there’s a lot of cost and often when something new launches, there’s a higher price point initially. So in the early days, I was shocked, but I understood. And then as time has progressed, it’s like, OK, it’s obvious that this is out of whack with the realities of the market.
Tell us about your work with AppsFlyer too. What does that connection bring?
Chris Hewish: That’s a really cool one. I mentioned our web shops and how that’s been a really successful growing business. But how the heck do we drive traffic? How do we know what data is happening there? How do we understand, get a full picture of what’s going on?
We provide some of that data already, but obviously we wanted to be able to see the end-to-end journey of a player from, hey, I saw an ad on social media through to hearing about it on PocketGamer to then playing the game and making purchases. Understanding what channels are delivering the higher LTV (lifetime value) players. Understanding, frankly, which players aren’t converting after either the first or second purchase.
AppsFlyer specializes in attribution: user acquisition, understanding what campaigns deliver quality users, what campaigns do 18% click fraud, understanding the bottlenecks in the journey, whether it’s a targeting optimization or communication optimization. Really just being able to pull back the curtain and have better data on what’s going on.