In another move to win over video game devotees, American Express Co. created a League of Legends-branded prepaid card, which could be more fitting than its earlier efforts to appeal to gamers.
The new prepaid card follows a digital payments tie-in to Facebook game Farmville and a credit card initiative tied to Halo 4, the latest in a series of popular shooter games on Microsoft's Xbox. Though these promotions each tie to different Amex products, they all target a new audience for the issuer.
The League of Legends "player base is largely male and millennial, which is a difficult segment for us to reach through traditional advertising," says Ian Swanson, vice president, partner and product management for American Express Serve.
With the new League of Legends prepaid program, plus joint promotions with the game including sponsoring its championship series, a weekly broadcast of professional gaming, Amex is experimenting to try and reach this demographic.
Some gamers considered the earlier Halo promotion a misfire, since it required a credit card instead of a prepaid card.
Prepaid accounts appeal to younger gamers, who might not have their own credit or debit card, says Billy Pidgeon, an independent market research analyst covering the international gaming sector.
"Many people in this crowd are reluctant to use a credit card," Pidgeon says. The use of prepaid cards in Amex's latest promotion shows that the card company's decision makers "definitely have learned something and are developing ties with the [gamer] demographic and business," he says.
The League of Legends promotion more closely resembles Amex's earlier promotion with Farmville and other games made by Zynga Inc., Swanson says.
"[The] Zynga Rewards program proved to be a successful one," he says. "It's a first-of-its kind virtual currency rewards program and it is currently in 10 Zynga games and has resulted in hundreds of thousands of users signing up for Serve."
The new Amex prepaid cards, which are illustrated with game images and characters, allow cardholders to receive Riot points (Riot Games created League of the Legends franchise) for certain tasks. This in-game currency can then be spent within the game. League of Legends is free to download and play, but it charges fees for optional extras such as game characters.
Amex's product plays into this model by giving gamers a way to obtain digital content without putting up their own money.
Users receive 1,000 Riot points when they sign up for the prepaid card and another 1,000 points the first time they load $20 or more on the card. Users also receive 1,000 points after their first 10 purchases. They get 10,000 points the first time a cardholder receives a direct deposit of $20 or more.
"The games industry's business model has been rapidly changing to a free-to-play model based on transactions," Pidgeon says.
Some gamers might favor prepaid as an alternative to storing a credit or debit card number with a game operator, particularly after incidents such as the payments data breach that struck Sony's platforms in 2011. Microsoft's Xbox, Sony's Playstation and Nintendo's Wii game systems all let users make purchase from a stored-value account loaded by plastic cards purchased in stores.
In November, with the release of Halo 4, Amex announced it would reward cardholders based on their performance in the game if users linked an Amex credit or charge card to an Xbox account. With the Farmville promotion, players were rewarded within the game for opening an Amex Serve account.
Pidgeon expressed surprise that more financial services companies aren't targeting the same audience.
Especially in international markets, "mobile is gaining a lot of ground in gaming," he says. And "specialty prepaid has evolved in the gaming industry, such as cards specific to certain game publishers and/or games."