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Why European game studios are switching to USD

Over the last few years we’ve noticed that studios we’ve been funding have increasingly moved to using USD as their primary operating and reporting currency. We wanted to better understand their motivations for doing so, and also highlight some potential operational pitfalls, as well as advantages of this approach.

The primary motivation for using USD as a base currency is that it’s the global currency of advertising. It’s the reporting currency of all the major ad platforms, so there is a perception that if gaming studios choose to adopt a local currency approach they will somehow be at a disadvantage.

Studios choose to have all their user acquisition and monetization revenues in the same currency to make their ROAS/LTV calculations easier to compute. It also avoids them taking any foreign exchange risk or having to factor in live exchange rates to the UA calculations. We’re also seeing studios often employ the idea of “Clean Room Economics” on their UA spend and monetization. This means that their UA/monetization cycles are segregated in a separate bank account from the operating costs of the studios, which may be in a different currency altogether.

Here are the key reasons studios choose USD as their primary currency 

1. Some ad networks only pay in USD

Some ad networks who have less sophisticated treasury operations than the likes of Facebook or Google will only make payments in USD. Sometimes this forces the hand of the studio. They either have to set up USD accounts to receive these payments, or face the punitive prevailing FX rate of the accepting bank to auto-convert payments into local currency.

2. FX risk

UA and finance leads look to manage any real or perceived foreign exchange risk. They do not want to have to factor in foreign exchange calculations into ROAS/LTV measurements when they clearly fluctuate all the time. They look to standardize both their UA spend, and monetization revenues (both ads and IAP) in a single currency. Given that some of the ad networks only pay in USD, this is the key factor behind this currency choice.

3. Dominant user domicile

Studios should also consider where their largest share of IAP revenue comes from, and the currency in which users as being charged. For many studios the US is their largest market and as a result most revenue is earned in USD. If you choose to receive payouts in a currency different from USD, you will have Apple and Google convert the USD into the local currency using their own internal FX rates. If you then have to pay ad networks in USD, it'll be a double conversion eg USD >> EUR >> USD, with the cost being borne by the studio.

4. Internal/Investor reporting

From a reporting perspective, consistency is everything. Internally, many studios choose to report in a currency most consistent with their business. So if 80% of their costs are on user acquisition in USD, it makes sense to report overall numbers in USD. Or course, you may want to do a local translation back to local currency at a consolidated level, but being able to talk about headline numbers in USD is somewhat of a standard approach in gaming.

If you have external VC investors, it’s fair to say that most of them “think” in USD and expect portfolio companies to report their key metrics in USD. It helps for comparison across different investments and portfolio companies, so this is just another reason to account internally in USD.

5. Jurisdiction of company location and domicile of publishing entity

Many studios operate publishing entities outside of their real jurisdiction where the real development work is done. US, Cyprus, Malta, UAE, and Singapore are popular jurisdictions for publishing entities, but often this is not where the development work takes place. Sometimes this is for tax, remote working, or increasingly, geopolitical reasons where the company may have a legally domiciled publishing entity in one jurisdiction but where development activities are taking place elsewhere. Normally such companies will account in USD and then pay development costs, freelancers, etc. from that entity.

Practical considerations

Practical considerations for game studios changing to USD as main form of currency

Choosing a bank

You should make sure that your bank or EMI (Electronic Money Institution) can support USD as a currency and also consider how sophisticated their implementation is. For example, some institutions have their own direct payment network access in the US (usually ACH) which makes it easier and cheaper to receive payments. Some use correspondent banks which makes the flow of money slower and more expensive. Be sure on the costs of transferring money from place to place, for example to pay bills or make internal transfers. Some institutions will charge to receive funds as well as transmit funds, and banking fees can rack up quickly. It’s important to understand all potential fees upfront as well as the timescales to move money around.

The Google “Issue”

To put a spanner in the works, Google entities (Google Play, Admob, etc.) only make payouts in the local currency to the country where the publisher is domiciled. This means, for example, a company running all of their UA/monetization accounting based in Finland, will only be able to accept payments in EUR. On top of this, Google insists on only paying out to a locally domiciled IBAN number, so for Finland, the bank account would need to be held by a Finnish bank and start with the letters FI.

This causes a problem as studios have to set up alternative banking arrangements from the rest of their operations, and it prevents them from using some of the more progressive neobanks and EMIs who offer low cost FX services and more advanced banking services. In the EU, it is also technically IBAN discrimination which prevents businesses from choosing best of breed banking providers across the EU region. But good luck getting Google to acknowledge this or change their practice!

Tax/accounting issues

Other considerations to keep in mind are those around accounting and tax. Specifically on the accounting treatment, how accounts are prepared and consolidated into a single currency, and how FX fluctuations are handled, are critical points to reach a policy decision on.

Also look at the impact of VAT/Sales Tax and how this is handled if working in a non-domestic currency. For example how are VAT liabilities calculated in an environment of changing FX rates? It’s sensible to seek good advice on the accounting and tax side. You don’t want to have to unpick mistakes later on.


There can be great advantages to a strategy of keeping things simple and standardizing on USD as a base currency. It allows a greater clarity of thinking without having to constantly think about FX risk and other operational parameters. But it’s important to get the thinking right and optimize your structures and banking providers to enable smooth operation. Hefty banking fees from EMIs or sky-high FX transfers from bank can eat into the all important CAC/LTV profit margin and make user acquisition less profitable. Take the time to map out all the flows and talk with other studios in your network to establish how others are running their operations and figure out best practice.

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