How international payments are becoming a problem for gamers
Gaming has come a long way since PAC-MAN and Space Invaders, both in terms of technology and its maturity as an industry. With maturity has come big money, with the industry now more valuable than the film and music industry combined. Competitive gaming, or e-sports, is one of the primary areas driving growth for the industry with millions tuning in to watch their favourite gamers compete for big money prizes on games such as League of Legends, Overwatch, or Counter Strike: Global Offensive, also known as CS:GO.
The esports industry is increasingly resembling ‘analogue’ sports with events and athletes inking multi-million-dollar sponsorship deals, entire sub-sectors of training and athlete development, and big money investors. Even traditional sporting leagues are getting in on the action. During its pandemic-induced hiatus, Formula One drivers competed online via the licensed video game in an event which was organised by F1’s parent company and broadcast on Sky Sports.
During the pandemic the industry only got bigger, with tournaments simply moving online rather than in-person and, with other sports on hiatus, their reach expanded beyond their usual demographics as consumers searched for something competitive to watch in lockdown. Almost $15million in CS:GO winnings alone were distributed in 2020. However, these big money prize pools are becoming an issue for competitors. If a solo competitor wins $100,000 but doesn’t have a US dollar bank account for it to be paid into, they may end up with far less than they anticipated after exchange fees and other overheads.
These games have a truly worldwide reach with the larger teams scouting players from all corners of the globe. As a result, prize money for these teams often has to be split into various currencies. As complexity increases, the need for an FX specialist to effectively manage exchanges increases. Teams with more comprehensive and complex operations (running teams in tournaments year round in different games etc.) may also want to create an FX hedging strategy in order to mitigate the effects of fluctuating exchange rates.
Tournament organisers usually payout in dollars, but also have huge foreign exchange requirements when dealing with brands, sponsorships, and broadcast deals in various parts of the world. Currency UK can assist with this too, acting as a consultant on any deals being made and making use of our various hedging mechanisms to ensure you get the most from any deal.
Overpaying for foreign exchange is costing nearly every aspect of the industry from teams to competitors to organisers. This is to be somewhat expected as the industry has had to grow up very fast to keep up with its own reach but has also led to some ridiculous situations like a Swedish fifteen year old having to manage the currency exchange of a $50,000 payment and trying to maximise how much they receive.
The industry needs to build more substantial relationships with foreign exchange providers in order to manage the large amounts of currency involved. Having worked with e-sports competitors, teams, and organisers, as well as low overheads and competitive exchange rates, Currency UK has the cross-industry experience and expertise required to fulfil your foreign exchange needs, no matter your position in the esports industry.