The gaming industry is thriving with an unprecedented surge in players, game titles, and competitive events. Worldwide, there are around 3.24 billion gamers, marking an increase of over 1 billion within the past seven years. The allure of the gaming community, especially during times of social isolation, has propelled the industry to its most vital position to date.
This robust growth is mirrored in the financial realm. The present-day video game market boasts an estimated value of US$365 billion, displaying an annual growth rate surpassing 7%. Forecasts predict that by 2027, the market's volume will reach US$482 billion, driven by the maturation of the Metaverse, GameFi, VR, and AR technologies. These developments bode well for gaming publishers, painting an optimistic future.
However, amidst this encouraging backdrop, the gaming industry has become a target for fraudulent activities. The rapid expansion of the market, combined with the anonymous and swift nature of digital goods, has created a fertile ground for fraudsters seeking quick and substantial gains. Outdated payment fraud protection measures further compound the issue. Consequently, gaming companies grapple with fraud-related challenges, shouldering the costs within their industry.
Source: Statista.com
Does High Fraud Pressure Mean Game Over?
Regrettably, like any field, fresh ideas and progress often spring from new entrants in the market. In the realm of gaming, the substantial prevalence of fraud has the potential to tighten its grip on emerging businesses, leaving established gaming companies inert. This stagnation could deter them from harnessing the industry's remarkable expansion to innovate new products and venture into unexplored territories.,Even if it doesn't spell the demise of their enterprises, it undeniably hampers their capacity to attain full fruition.
The gaming landscape is rife with a multitude of fraudulent schemes. That being said, what should genuinely instill concern within gaming enterprises are the impending waves of deceitful assaults at scale.
Given the intrinsic nature of digital assets, the trajectory indicates that as fraudsters refine their proficiency in masquerading pilfered cards as authentic, they will inevitably amplify the scale of their illicit operations. Presently, gaming companies are already contending with an array of highly sophisticated attacks. The true test lies in preempting these assaults without resorting to a complete shutdown of operations or impeding genuine customers from conducting transactions.
Today, the playground for fraudsters is all in their favor. They are on the offense, trying different methods of attack without paying any real price. What if you could turn the table and kick back?
It’s time to switch to offense
When offensive measures come into play, it puts you in control. You have the power to cost them theire time and money; and do it to a pointwhere it no longer makes any financial sense to continue attacking your marketplace. For example, suppose a fraudster successfully attacks a cdkey marketplace using social engineering and gets 100 cdkeys. In that case, the fraudster can then sell the products quickly in a secondary cdkey platform for a discounted price. But what if the cdkeys are fake? How much time will they waste beforethey notice that? What would happen if the fraudster hurt their reputation when uploading it to a secondary platform that will trigger an alarm for “fake cdkey”? This will cause frustration, hurt the fraudster’s business, and make them think twice if they want to continue attacking this platform. In the end, it’s an ROI game.
And the results? When fewer fraudsters mess with the platform, the fraud pressure goes down. A lower fraud pressure means less chargebacks, more possibilities to develop new products and explore new territories. The customer experience improves and the merchant can focus on the user experience rather than protection, which is directly correlated with friction. And most of all, the merchant gets the privilege of focusing on their business and growth.
Interested in a game-changing, and patented offensive measure?
Actually, at nSure.ai, we have two – they have been made into products named Stingback™ and Softapproval™
The first (nSure.ai Stingback™), is an offensive measure, where when the nSure.ai model recognizes a fraudster and sends the fraudster a fake product, making them feel like they’ve won. As mentioned before, when the fraudster tries to monetize it, there is a high chance that their reputation will be damaged. Even if not, there is a reasonable probability that the fraudster will try to scale the attack after the first “success”, resulting ineven bigger loss of money and time.
The second (nSure.ai Softapproval™), is a process where the model initiates a set of behavioral economics tests for fraud-suspected buyers and creates more data points that enrich the model. With Softapproval™, gaming companies reduce fraud pressure and increase approval rate by approving legitimate clients they would otherwise decline.
The digital goods landscape within the gaming industry frequently depends on fraud prevention tools that aren't finely tuned for their specific needs, often employing a passive approach. To emerge triumphant in this battle and fully harness the rapidly expanding gaming sector, it's imperative to adopt pioneering strategies that effectively alleviate the considerable burden of fraud. This will enable companies to direct their focus towards core business endeavors, free from the constraints of constant fraud fears and threats.
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Gaming Case Study - How nSure.ai grew approved GMV for a leading gaming exchange by more than 60%
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