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January 31, 2010

Prepaid enters gaming rewards realm

The synergies between prepaid and video gaming are surprisingly obvious, and now prepaid issuers and game makers are aiming to tap into this huge youth-driven market by offering prepaid solutions tailored to this segment Of all the places for prepaid card rewards to emerge, the video gaming sector might seem a surprising one

By Verdict Staff

The synergies between prepaid and video gaming are surprisingly obvious, and now prepaid issuers and game makers are aiming to tap into this huge youth-driven market by offering prepaid solutions tailored to this segment. As Charles Davis reports, they are also taking the opportunity to build customer loyalty.


Of all the places for prepaid card rewards to emerge, the video gaming sector might seem a surprising one. The edgy, youth-driven gaming community seems an unlikely home for prepaid experimentation, until one takes a step back and acknowledges the realities: gaming is a multimillion-dollar enterprise, with surprising demographics and unheard-of brand loyalty.

So perhaps it is not that surprising that prepaid card companies servicing the gamer crowd are developing rewards programmes that allow co-branded partners to build relationships with video game players.

The latest such product, announced in January by gaming giant Electronic Arts (EA), is the prepaid EA Sports DebitSmart Visa card, which features a rewards system that lets users redeem points for some of its video games. Capcom Entertainment was the first gaming company to launch a prepaid rewards product, introducing its own Visa-branded prepaid rewards card in North America last year.

Credit card-style rewards

For EA Sports fans, the rewards are quite simple: more EA Sports games. The reloadable prepaid debit card enables users to receive a percent back from every purchase at thousands of brick-and-mortar and online retailers to redeem points that can be used to purchase EA Sports titles.

“The EA Sports DebitSmart Visa prepaid card is a great opportunity for us to offer our community of loyal customers a new way to purchase and save on their favourite EA Sports game titles,” said Todd Sitrin, group vice-president of global marketing at EA Sports. “Consumers use the card while making their everyday purchases and are rewarded with video games. This programme is a perfect marriage of encouraging responsible spending while providing a unique reward programme.”

Funds for the cards can be allocated from a payroll direct deposit, checking account, or another prepaid card. Cardholders can also transfer funds electronically from a bank account or arrange for the cards to be funded through direct deposit.

The cards can also be loaded at thousands of GreenDot and Western Union retail locations, including Wal-Mart, CVS/Pharmacy, Walgreens, Rite Aid, 7-Eleven, and Radio Shack.

The number of points varies by retailer, but it typically ranges from 1 to 10 for every dollar spent, according to Randy Chase, a product manager at EA Sports. Cardholders can redeem the points for video games, exchanging 6,500 points for titles that work with Microsoft’s Xbox 360 or Sony’s PlayStation 3 consoles, or 5,500 points for a Nintendo Wii console game.

EA Sports worked with Coconut Creek, Florida-based StorValue Card Solutions to develop the product, which is issued for EA Sports by MetaBank. MetaBank charges cardholders a monthly $1.99 service fee, $0.50 for each cashback transaction at the point of sale and $1 for withdrawals at ATMs. Online purchases and standard signature-debit transactions are free.

Gaming – a multi-billion dollar business

Gaming is big business, and a huge opportunity for the prepaid card market. In 2009, EA posted net revenue of $4.2 billion and had 31 titles that sold more than one million copies.

It is a huge market, and one that does not play to all the stereotypes about soda-guzzling teens staring at PlayStation consoles all day, but there is a huge segment of the gaming market that will find it increasingly difficult to obtain a credit card.

A part of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act that takes effect this month requires people younger than 21 either to have a co-signer older than 21 or to prove they can handle the debt themselves.

A prepaid card, on the other hand, can be issued to teens with no regulatory concerns, to say nothing of the twenty-something crowd that forms the largest segment of the gaming market. Adding credit card-like rewards to the mix will only add to the attractiveness of the product.

Combining the passion of game players with the passion of collectors is an even smarter combination. A wildly popular new multiplayer online game, Dragonica, recently announced a new line of collectible prepaid cards. The Dragonica Online prepaid card series revolves around in-game elements, and will come in values of $10 and $25. The first element series to launch are the Water Series, the Fire Series, and the Earth Series. Each include four different collectible cards depicting key characters and scenarios from the game.

Fans who purchase a $25 card receive an exclusive digital Dragonica Online comic book based on the element of that particular card, plus a secret bonus item when they redeem the cards for ICE Cash (ICE is the game’s virtual currency that can be used to purchase items that customise a player’s Dragonica Online character and gameplay experience).

Leveraging prepaid to loyal youth consumers

Dragonica will release a new card series each quarter, and special edition cards will reward players with rare in-game armour and items.

“Prepaid cards are a great way to further promote the game with our growing fan base, and an ideal way to capture offline traffic,” said Wim Stocks, vice-president of sales and strategic partnerships. “Our primary audience for Dragonica Online is teen boys and girls who generally don’t have credit cards at their immediate disposal, so prepaid cards purchased at retail become the ideal means for them to get involved in the game.”

Targeting prepaid cards at highly loyal, repeat affinity customers is a winning formula, one that the gamers might have seen first in the casinos of Atlantic City and Las Vegas.

Most casinos offer some form of gift card that can be used at virtually every retail outlet at the property, with the exception of the casino. By regulation, gift cards can’t be used at the gaming tables and slot machines.

Harrah’s Entertainment, for example, pioneered the development of the popular “player rewards” card offers. Its Total Rewards gift card can be used at nearly 175 retail outlets in Atlantic City and beyond, with rewards that can be used to purchase tickets for shows at the House of Blues in Atlantic City, or for a free meal at any of the more than 70 restaurants available at Harrah’s four Atlantic City properties.

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