Rixty Solves Credit Problem for Virtual Goods
What the Coin-Op System Means for Online Gamers: No Credit Card? No Bank Account? No Problem — SAN FRANCISCO (AdAge.com) — Founders of virtual-currency company Rixty were working on a virtual world when they ran into a problem …
Context & Ripple Effects
Virtual goods have been building toward a real economy for years: CNET profiled the banking of virtual economies back in 2005, and the New York Times reported in November 2009 that virtual goods were bringing real paydays to game makers. But the buying side has lagged the selling side — eBay's 2007 delisting of all auctions for virtual property closed off one informal channel for acquiring game currency, leaving players without credit cards or bank accounts with no sanctioned way in.
Rixty's answer is a coin-op style payment system aimed squarely at that gap: confirmed on August 31, 2010, it lets online gamers load value and buy virtual goods without either a credit card or a bank account — the two instruments most teenage and young players lack.
First-order effects
- Under-18 and unbanked gamers gain a first-party purchase path for virtual goods, converting a population that previously paid through parents' cards or gray-market resellers into direct customers.
- Game publishers running virtual-currency economies get a new top-of-funnel: Rixty removes the checkout abandonment that comes when a teen hits a credit-card wall.
Second-order effects
- Prepaid card issuers and rival virtual-currency processors face pressure to match cash-friendly loading options, since the publisher-side economics favor whichever rail converts the youngest spenders.
- With eBay out of the virtual-property trade since its 2007 delisting, more of the transaction volume migrates through official payment partners like Rixty — tightening publishers' grip on their own currencies.
Third-order effects
- If cash-based loading proves out, payment infrastructure designed for minors becomes a structural layer of the virtual-goods business rather than a niche workaround — raising the likelihood that regulators and payment networks eventually treat minor-oriented virtual currency as its own compliance category.
The trend: Virtual-goods monetization is extending down the age curve, with payment rails built around cash and prepaid value replacing the credit card as the default entry point for young players.