8 min read

How to Set Up an Online Gaming Business


Andre Bourque
Business and Startup Adviser
Contributor
online gaming
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The gaming industry has significantly evolved in the recent decades courtesy of the internet.  Online gaming, popularly called iGaming is a multi-billion dollar industry. As of 2015, the industry was estimated to be worth 1.7 trillion U.S Dollars, a figure which is expected to grow to 2.14 trillion U.S Dollars by 2020. In 2016, 72% of the global online gaming revenues came from North America and Asia-Pacific, the world’s largest gaming districts.

Online gaming comprises of mobile, social, and free-to-play and pay-to-play multiplayer gaming. These four categories generated revenues worth 44 Billion U.S Dollars in 2015. Forecasts from statistics show that the global online traffic due to gaming is on an upward trajectory. This is a clear indication that iGaming is growing and hence a good business for investment.

Although this is a profitable business, it is also a risky one that requires detailed research before taking the dive. You need to understand the market and its trends, legal requirements, infrastructural demands, and security.

Below, are the steps you need to follow if you intend to start an online gaming business. These steps are a tried and tested recipe that will set you up for success.

1. Conduct a Market Research

This will help you appreciate market leaders such as Video game developers like Ubisoft, Electronic Arts and Social game developers like Supercell. Knowledge of these market kings will give you an idea of the kind of services your clients will expect as well as identify gaps in the industry. These gaps are business opportunities.

As established, the major gaming regions are Asia Pacific and North America; such information guides you on the best places to invest. Investing in these two areas almost guarantees you returns. Knowing the profitable regions is not enough. You also need to establish the demographics; they introduce tastes, preferences and trends into play.

Given that the online gaming market is predicted to grow 11.95% Compound Annual Growth Rate (CAGR) up to the year 2019, many online gaming firms are fighting for this market. The only way to stay ahead of these competitors is to conduct a thorough market research.

2. Find a Technology Provider

After doing a qualitative market research, you then proceed to choose a firm to provide you with iGaming Software. Even though, you can develop the software yourself, it is complicated and costly as opposed to hiring an expert company.

Ample time should go into evaluating available options for quality and price as well as their ability to meet your specific needs.

Preference ought to be given to a software provider with an in-depth comprehension of the online gaming field as well as enough experience in launching online games.

A good technology provider should provide the following services in their package;

  • Payments gateway module with multi-currency support
  • A gaming management system
  • High-quality back-end tools
  • Customizable and user-friendly front end
  • Free risk and account administration
  • Access to leading online games and events
  • Broad coverage of the gaming markets
  • Support services

It is also at this point that you address your need for a dedicated server. Though costly, you can acquire you own servers but you can reduce expenditure through farming servers from third party operators.

3. Create a Website

The appearance of your website is of great importance. It should have an attractive design besides a user-friendly interface because it is the point where your clients interact with your services. You need to give consumers a reason to choose your site.

Consider the following recommendations for a good website;

  • You need to avoid the temptation to overload your website with unnecessary or even sometimes complicated and demanding graphics and elements. This has a negative effect of slowing down your site and consequently the gaming experience. From research, gamers are more likely to leave your website if it takes a lot of time to load.
  • Your website’s front end needs to integrate with your database smoothly.
  • It should also be dynamic enough to handle surges in traffic.
  • It must be compatible with all the popular browsers. This translates to a larger audience for your online games.
  • Avoid dead links on your website. All the links to both internal and external pages must be working.
  • A user should be able to comfortably view your site without having to scroll horizontally.

4. Form a Company

You choose whether you want to register your business as a corporation or a limited liability company putting into perspective the requirements for registration as per different jurisdictions.

Forming a company serves to create a distinction between you and your business; thus promoting accountability. It also makes it easy to negotiate for credit, do pitches to potential investors, go into contracts with your technology provider, and apply for a gaming license.

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5. Obtain a Gaming License

You need to obtain all the relevant licenses before you proceed to the launch of your website. Keep in mind that different jurisdictions have different licensing requirements and procedures. For example, before you set up an online gambling business in the UK, you require a personal management license and an operating license.

In the gaming industry, there are four types of  jurisdictions;  those that regulate online gaming within their territory, those that have banned it, nations that have monopolies and countries that have no regulations at all.

Getting a license is not an easy task because it can take a few months to even a year to get one depending on jurisdiction.

You can get a license through one of the following options;

  • Application to the relevant authorities in the country you intend to operate in
  • Partnering with the iGaming software provider such that you become their licensee.
  • Working under a white label solution. This option will give you time to focus on other aspects of your gaming business other than just chasing a permit.

Before settling on a particular jurisdiction, you need to put its reputation, taxes, licensing requirements and duration of license application into consideration.

6. Choose a Payment System Provider

Without discussion, you have to invest in secure payment systems for your business. For this reason, you need to find an established and trusted payment system provider. You should then enter into a contractual agreement with them so as to facilitate quick and efficient handling of transactions between the business and the gamers. You will need fully functional bank and merchant accounts. A good payment system for your online gaming business is one which;

  • Allows multicurrency transactions
  • Links with known and commonly used e-merchants
  • Can detect fraud
  • Is affordable

You also need to ensure that the payment mechanisms are comfortable and convenient.

In a move to stand out, you need to consider giving your clients various methods of payment as opposed to limiting them to credit cards only. You could be flexible enough to allow for wire transfers, e-checks or even money orders. This will boost your chances of getting customers.

7. Decide on a Sound Marketing Strategy

The ability of your business to grow will depend on many factors and the key among them is your ability to attract and retain players. Since the online business is brutally competitive, you need to have a good marketing plan. You can consider the following strategies;

  • Market positioning -With this approach, you show your clientele why you stand out from your competitors. You will need to assemble a professional team of marketers to clearly communicate your goals and mission. You should concentrate on quality by selling quality games from trusted providers at the same time keeping your website neat and fast. This creates trustworthiness.
  • Conducting pre-launch advertisements – This helps create awareness and hype. It can be attained through online advertisements and publications.
  • Doing after-launch promotions – This can be achieved through online advertisements, banner networks and search engine optimization.
  • Gamer attraction and retention campaigns - You can accomplish this through a reliable support service or a 24-hour call center for those clients having problems with your systems. You can also create “How to manuals” and demonstrations to enable customers easily navigate your online gaming platform. Additionally, you could come up with a bonus system for top gamers. All these services lead to customer satisfaction and retaining a happy customer is easy.
  • Search engine optimization (SEO) – Through creation of optimized content, you can direct traffic to your gaming site through search engines.
  • Supporting multiple languages on your website – This strategy will help your business cover a wide area.
  • You could also run a Google Adwords Campaign to help drive traffic to your site.

Establishing an online gaming business is no small task. You need to fully grasp the in’s and out’s of the industry if you are to stand a chance of success. You are required to conduct a broad market research, choose an experienced and successful software provider, contract a reliable payment system provider, and overcome the bureaucracy associated with getting a license before you can launch your business. The work doesn’t stop there, though. You must have a meticulous marketing formula in your business plan for it is through marketing that you attract and retain customers.

As you build your brand in this segment, remember to keep up with digital trends and uphold high quality.

Finally, you need to be prepared to deal with typical challenges associated with running an online gaming business such as; dealing with hackers and having a large number of site visitors but only a few signing up for your games. Starting Business offers a complete range of advisory services and practical solutions related to the formation, licensing and on-going support for your online gaming business.

Start Your Company Registration Today

Starting Business offers a complete selection of company services, and can help you to start your company in a timely and efficient manner.


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Andre Bourque Business and Startup Adviser
Based in San Francisco, Andre Bourque is an experienced social media influencer, business writer and startup adviser. Catch some of my work on my the Huffington Post and Entrepreneur magazines.
Based in San Francisco, Andre Bourque is an experienced social media influencer, business writer and startup adviser. Catch some of my work on my the Huffington Post and Entrepreneur magazines.

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