Key resellers & grey markets

gizmo · 21-06-2016 2:14pm

If they were legally sold they wouldn't be faced with so many chargebacks from fraudulent credit card purchases that their provider shut them off.

Nor would they be conversing with merchants on G2A who outlined how they do use databases of stolen credit cards to harvest third party keys in order to resell them on G2A. A situation identical to the Far Cry 4 issue from early last year on Kinguin.

Nor would the guys from IndieGameStand have said this about the issue.

This has been a huge problem at IndieGameStand this past year. I’ve personally wasted around 6-9 months of development time on security detection rather than building cool new things for our site. I’m sure it’s affected other game marketplaces too since I know larger sites like Humble Bundle build in a refund/chargeback percentage to all their sales payouts and my guess is that this type of scamming has contributed to the closing of smaller sites like ShinyLoot and maybe even Desura. In the case of IndieGameStand, I estimate it’s directly cost us well over $12k and that’s just in raw chargeback fees and developer payouts (for refunded/scammed sales) – not counting the hours of ongoing development time that we’ve wasted on this problem.

K.O.Kiki · 21-06-2016 3:30pm

Rob2D wrote: »

I'm so sick of all the bleeding heart idiots being taken in by this.

IT'S ALL A BUSINESS

None of these companies ever complain when some crowd wants to buy a few thousand keys from them in the first place. Publishers will always sell as much as they can to whoever can pay. Do some digging on this and I bet you'll find they were all legally sold. Nobody stole some poor ordinary Joe's credit card and used it to buy a quarter mill worth of keys, that's ridiculous.

These companies are just using the whole grey market fear thing to try and recoup some money because they're butthurt at how well it's doing. And as soon as the next big release happens you can be sure that the phone will ring with someone on the other end looking to buy a few thousand keys and they'll be told "yes sir, no sir, how many would you like sir".

And the whole thing will start over again.

Either you have not read, or do not understand, any of the links in this thread.

Their keys are being bought but they're not seeing a cent from the sales.

FAILSAFE 00 · 21-06-2016 3:48pm

The developer should be setting up proper security measures to avoid getting stung with fraudulent credit card use.

No sympathy from me. I have worked with retailers where they have had to put systems in place to avoid illegal credit card use.

Cordell · 21-06-2016 3:52pm

The developer is not a retailer. They make games, they don't maintain payment processing systems. Blaming them is victim blaming, they are the only ones that lose and they are at fault now? Really?

FAILSAFE 00 · 21-06-2016 3:57pm

Cordell wrote: »

The developer is not a retailer. They make games, they don't maintain payment processing systems. Blaming them is victim blaming, they are the only ones that lose and they are at fault now? Really?

IndieGameStand wrote:

This has been a huge problem at IndieGameStand this past year. I’ve personally wasted around 6-9 months of development time on security detection rather than building cool new things for our site

Referring to the article above. Loads of payment processors can do that automatically for the seller. Even very small businesses use it.

Cordell · 21-06-2016 4:08pm

In any case it is not their fault but they end up paying the chargebacks. Even if they failed to take proper measures they weren't the ones stealing. Or buying stolen stuff for that matter.

Would you buy stolen goods and say that you don't have any sympathy for the people that were robbed because if they failed to take proper security measures they are the only ones to blame?

FAILSAFE 00 · 21-06-2016 4:21pm

Cordell wrote: »

In any case it is not their fault but they end up paying the chargebacks. Even if they failed to take proper measures they weren't the ones stealing. Or buying stolen stuff for that matter.

Would you buy stolen goods and say that you don't have any sympathy for the people that were robbed because if they failed to take proper security measures they are the only ones to blame?

A business sold goods without performing adequate security checks on the purchaser.

Thats all really.

gizmo · 21-06-2016 4:40pm

FAILSAFE 00 wrote: »

The developer should be setting up proper security measures to avoid getting stung with fraudulent credit card use.

No sympathy from me. I have worked with retailers where they have had to put systems in place to avoid illegal credit card use.

You seriously have no sympathy for a small indie store having to put up with this crap?

FAILSAFE 00 wrote: »

Referring to the article above. Loads of payment processors can do that automatically for the seller. Even very small businesses use it.

IGS use Paypal, Amazon and Stripe for payment processing. If those industry leading services were capable of detecting all fraudulent activity then IGS wouldn't need to be spending additional resources on detection.

dunworth1 · 21-06-2016 4:59pm

I'll go wherever is cheapest to buy.

Same as if I was buying anything else.

If the devs were really worried they would reduce the cost to match simple as. They are greedy asking for 70+ for a game

K.O.Kiki · 21-06-2016 5:15pm

dunworth1 wrote: »

I'll go wherever is cheapest to buy.

Same as if I was buying anything else.

If the devs were really worried they would reduce the cost to match simple as. They are greedy asking for 70+ for a game

Except if you followed the above linked articles, it's affecting devs who are asking $10-15 just as badly (or even, arguably, worse).

Besides, have you ever worked out the cost of a game?
20 people (a REALLY small team) at an average of 40'000 salary (laughably low) is 800'000/yr in salary alone.
Before costs such as PCs, software licenses, electricity, rent, etc.

They'd need 11'429 sales @ 70 quid just to break even - and again, that's not taking into account overhead costs of any kind.

So, you inflate those costs to 1'500'000 / yr, and assume the dev gets 30 quid back on each sale.
They need 50'000 to break even on a year's work.

Cordell · 21-06-2016 5:15pm

Yes, because going into a price war with thieves is a battle that they can win. Those who do sell stolen games at half price can half the price again, it wouldn't cost them anything, right?

Shiminay · 21-06-2016 5:18pm

dunworth1 wrote: »

I'll go wherever is cheapest to buy.

Same as if I was buying anything else.

If the devs were really worried they would reduce the cost to match simple as. They are greedy asking for 70+ for a game

Once again, for everyone who keeps ignoring this. Developers do not set prices for AAA games. Publishers do. They are 2 very, very different companies doing 2 very, very different jobs. One makes games, the other markets and sells games.

In the case of the indie dev, who is typically a team of less than 10 and who does not have the support of a multi-billion dollar publisher behind them, they have to wear both hats and they are the ones that are really suffering in this climate of stolen/fraudulent keys.

It's the same in music, gigantic bands on big labels make their money on record sales, the label makes its commission and it also pays for and receives the profits from big tours (and in their defence, they front an absurd amount of money and take on a big risk in doing so). Small bands who aren't on a label make their money by going out and gigging and selling Merch and CDs to people on the night. Sure, I could just stream or download their album, but given the choice between making a very real "can afford to eat next week" difference to a small band (or indie developer) who's art I am enjoying versus giving as little as possible back which only means they find it harder to stay in the game, then that's a no brainer - I'm always gonna try help a struggling artist because if people don't support the arts, they don't get arts.

dunworth1 · 21-06-2016 5:46pm

Shiminay wrote:

Once again, for everyone who keeps ignoring this. Developers do not set prices for AAA games. Publishers do. They are 2 very, very different companies doing 2 very, very different jobs. One makes games, the other markets and sells games.

Surely the devs have already been paid when the game releases no?
I assume that the publisher fronts the money and hope to make a profit from the sales?

If a local shop was selling an item for 70 euro and an online retailer is selling the very same item for 40 euro. Who are you going to buy from?

I don't believe that the stolen keys are as common as people are saying as they normally deactivate the keys anyway

gizmo · 21-06-2016 6:07pm

dunworth1 wrote: »

I don't believe that the stolen keys are as common as people are saying as they normally deactivate the keys anyway

In the context of this discussion, it doesn't matter if the key has been deactivated because the retailer in question, whether it's the developer selling directly or an online store, will have already suffered the chargeback fee for the fraudulent transaction. This fee has been said to be up to $45 per instance, depending on the payment provider and case in question.

The scale of the problem is unknown but numerous developers, publishers and storefronts of various sizes have been hit with it over the last number of years as outlined in the links posted in the OP and since.

FAILSAFE 00 · 21-06-2016 6:15pm

gizmo wrote: »

In the context of this discussion, it doesn't matter if the key has been deactivated because the retailer in question, whether it's the developer selling directly or an online store, will have already suffered the chargeback fee for the fraudulent transaction. This fee has been said to be up to $45 per instance, depending on the payment provider and case in question.

The scale of the problem is unknown but numerous developers, publishers and storefronts of various sizes have been hit with it over the last number of years as outlined in the links posted in the OP and since.

Well, we haven't heard of many deactivated keys incidents in the last couple of years. Only a few incidents reported so it can't be that bad and we know how gamers like to complain when it comes to deactivated keys.

I think the vast majority of reseller keys on the market are genuine and its a very small percentage that are fraudulent. Otherwise we'd be hearing about deactivated keys all day, every day.

dunworth1 · 21-06-2016 6:20pm

FAILSAFE 00 wrote:

I think the vast majority of reseller keys on the market are genuine and its a very small percentage that are fraudulent. Otherwise we'd be hearing about deactivated keys all day, every day.

That's the thing if there was lots of keys being deactivated on g2a people would have stopped using it.

Once in a blue moon is fine but if every couple of games were being deactivated I wouldn't be buying from them anymore.

I've only ever had one game deactivated and that was eso

So 1 out of about a hundred odd

EoinHef · 21-06-2016 6:21pm

Every online retailer of digital good is vulnerable to this. Not just small indie stores.

They seem to want to try appeal to the emotions of the consumer to try and stop it. Im sorry but imo emotion has nothing to do with business,as a company there job is to try get the most possible from a sale,as a consumer my job is to try and get the best value i can. Lets not try and pretend business cares about the consumer.

If the key market sellers did not exist would prices/profit margins be higher at these sites? Would an appeal by consumers to reduce inflated prices be heard by any of these companies in that enviroment?

gizmo · 21-06-2016 7:23pm

FAILSAFE 00 wrote: »

Well, we haven't heard of many deactivated keys incidents in the last couple of years. Only a few incidents reported so it can't be that bad and we know how gamers like to complain when it comes to deactivated keys.

Quite true, there haven't been many publicised incidents but there are a number of reasons why this is the case, namely:

There may not be that many incidents in general.
Companies don't want the negative publicity of deactivating large swaths of keys. Case in point, the blowback over Ubisoft and Rebellion revoking keys for Far Cry 4 and Sniper Elite 3 in the past.
It's not exactly easy to track which keys were fraudulently obtained. As the second IGS article says, tools to do this aren't exactly prevalent so it's difficult to do it accurately without harming legitimate buyers. The tinyBuild blog post has also been updated since, addressing this fact.

FAILSAFE 00 wrote: »

I think the vast majority of reseller keys on the market are genuine and its a very small percentage that are fraudulent. Otherwise we'd be hearing about deactivated keys all day, every day.

Putting aside the idea of outright fraud, however, there is a fairly decent argument from developers that the key reselling market is being bolstered by people purchasing keys in bulk from bundles and then reselling them for a profit on these marketplaces. Obviously, EULA issues aside, this is more of a moral issue but one which I'm clearly very much against. Is it the free market in action? Sure. Doesn't mean it doesn't suck for those depending on a much smaller number of sales to survive though.

To reiterate what I said earlier...

gizmo wrote: »

In general though, I find the more interesting question in this debate isn't really "is the key I bought working fine", it's "who is getting shafted in order for me to get this cheap key" and the obvious follow up, "do I care?".

EoinHef wrote: »

Every online retailer of digital good is vulnerable to this. Not just small indie stores.

They seem to want to try appeal to the emotions of the consumer to try and stop it. Im sorry but imo emotion has nothing to do with business,as a company there job is to try get the most possible from a sale,as a consumer my job is to try and get the best value i can. Lets not try and pretend business cares about the consumer.

If the key market sellers did not exist would prices/profit margins be higher at these sites? Would an appeal by consumers to reduce inflated prices be heard by any of these companies in that enviroment?

All totally true however I'd argue that the emotive aspect plays a larger role in these cases because we're dealing with smaller companies who simply can't afford to survive with these losses. In the case of tinyBuild, whose blog post kicked this thread off again, this is an interesting read on how they got their first game out the door, how they moved into publishing and what they've done since. They may be a business but they're also just a small bunch of folk trying to get some neat games out there and who I don't particularly like to see getting hit in the manner which they've described.

dunworth1 · 21-06-2016 8:16pm

gizmo wrote:

Putting aside the idea of outright fraud, however, there is a fairly decent argument from developers that the key reselling market is being bolstered by people purchasing keys in bulk from bundles and then reselling them for a profit on these marketplaces. Obviously, EULA issues aside, this is more of a moral issue but one which I'm clearly very much against. Is it the free market in action? Sure. Doesn't mean it doesn't suck for those depending on a much smaller number of sales to survive though.

Thankfully my moral compass is aligned with my wallet.

I'd also look at it while they are getting less large sums of cash i would bet that people are buying more games.

I'm more likely to buy a few games rather than just one purely down to the cost

Stingerbar · 21-06-2016 8:35pm

Affiliate for two cd key resellers here

The vast majority of resold keys are simply bought on cheaper markets and sold to more expensive ones. The developers in these cases get the revenue, less per unit, but more volume sold.

There's the option to use a Russian VPN and have lots of cheap games, but nobody really wants to do this, so the market exists. Capitalism.

Naturally not all cd resellers are to be trusted, some are shady, some are new, and certain keys (like Blizzard keys) I would be cautious of.

The two resellers I am an affiliate for have good trustpilot scores, feature regularly on large international deal sites, respond quickly on twitter, have tens of thousands of followers/likes/shares, have been around for several years, are pretty well established.. personally I can see the sales, return rates, etc so it all reconciles.. yet they get lumped in with bad sellers (e.g. fly by night resellers who seem to disappear into thin air or rename their company) or get associated with old and recent stories about deactivated keys and so on

TLDR: the whole market itself is grey, but certain resellers are dependable. Likewise I don't trust every single computer hardware site I come across, I check them out. Zero risk, stick with Steam/Uplay/Origin

Robert ninja · 22-06-2016 1:05am

I wouldn't have bought a ton of the games I have if they weren't as cheap as they were on key resellers. Mostly older games from big publishers. Like Max Payne 1/2 deal I got for something like 3 quid. Those titles are pretty old and awesome but R* are not a company I respect and have pushed even stricter DRM so I've no interest in directly supporting them but I'll still buy their older games albeit at a cheaper price.

Simarly if there's a developer or publisher who has been catering to my niches and values then I'll buy directly from their site if possible or from steam/gog. A lot of AAA publishers seem to think adding more DRM and regional restrictions will curve this problem... but for me that just makes me think less of them and even more likely to buy from a reseller or outright dismiss their game.

Just stick to your guns with these kinds of issues. You can't take on the weight of the whole market. Do you little part in supporting things you like but I won't be losing any sleep over Rockstar not getting an extra €13.01 from me. (and I refuse to buy any RSC games).

Shiminay · 22-06-2016 2:52pm

TotalBiscuit went on a full on shouty crackers rant about this yesterday on the Co-Optional Podcast (which had Sky Williams as a guest and he's a man who up until very recently was sponsored by G2A). Like him or not, he's a great orator and he made the point that you're actually doing LESS harm to small time developers by pirating their games instead of buying stolen keys. The Developers in these instances have to foot the bill of a chargeback/refund and often times that's a flat fee, not a percentage of the transaction, so it can be for MORE than the game would normally sell for.

Some interesting points I took away from the discussion/rant: G2A and Kinguin offer you (the consumer) insurance to protect against fraud - they are straight up admitting that they know their platforms are being abused for these purposes and they're cashing in on it - it may be rare to be sold a stolen key, but it's a nice little money spinner for the platform.

G2A told developers who wanted a fix that if they signed up exclusively to their sales platform, they'd be able to fix, but otherwise no - that is a fking shake down of Mafia proportions. You cannot suggest these are the actions of a company that has any ethics or interest in addressing a serious legal issue that's ongoing with their platform. Fine - argue that Ethics and Maximising Profit are mutually exclusive and that ethics has no place in this conversation, but that makes you a part of the problem.

G2A, knowing their reputation has been taking a hammering on these issues for a few years has decided to throw money at things and people to buy good-will. TB said of a recent tournament he casted that was sponsored by them that he didn't want to do it when he heard they were the headline sponsor, but the event organisers said that they gave them so much money, they couldn't afford not to take it.

Links234 · 22-06-2016 10:09pm

Take a good look at this if you think G2A aren't a shady business.

gizmo · 22-06-2016 10:21pm

Shiminay wrote: »

G2A, knowing their reputation has been taking a hammering on these issues for a few years has decided to throw money at things and people to buy good-will. TB said of a recent tournament he casted that was sponsored by them that he didn't want to do it when he heard they were the headline sponsor, but the event organisers said that they gave them so much money, they couldn't afford not to take it.

Six million dollars I heard. Repeatedly.

Robert ninja · 23-06-2016 4:24am

I'm not defending G2A. I've bought from them before with no issues but I know full well they're grey market but no more 'evil' in terms of corporations than the 'legit' guys.

What I find rich is that the same people who shouted about them (resellers in general) being illigetimate are now surprised that they're taking any kinds of steps to try and gain their customer's confidence back.

I never liked their 'shield' and insurance policy crap either. I always unticked it. Consumer rights garuantee I get a working key not a charge. And if I ever recieved a non-working key or later flagged as stolen I'd reverse the charges with my bank and never do business with the seller again. They're making the whole inusrance thing a part of their business model now which i think is a bad idea. But I can do what I've always done, ignore it, no matter how tacky it gets. Certainly can't be any worse than payed mods steam tried to push or the desolation of certain mod scenes' integrity from the steam workshop overall.

gizmo · 23-06-2016 1:05pm

I'm not really sure I'd consider throwing money at sponsorship deals for LoL teams and events while simultaneously promoting account selling and ELO Boosting services for the very same game as attempts at gaining customer's confidence back, Robert. I'd liken the former aspect to more straight up self promotion and increasing brand awareness than anything else.

Hell, I'd happily take the point that what they do in general isn't anti-consumer. I would, however, consider it damaging to the developers and publishers whose games they resell for the reasons already stated. They may, to quote Stingerbar above, "get the revenue, less per unit, but more volume sold" but that doesn't really do them any good if their total revenue is diminished because of their business. It's also important to note that most of the complaints about the resellers have come from the smaller outfits who are less likely to be able to absorb the losses stemming from both those falling revenues and large fees stemming from chargebacks.

Robert ninja · 23-06-2016 5:10pm

@gizo

We've heard all this before about piracy and it's not true or exagerated. I'd say a large amount of people who buy resold keys don't have a lot of money for video games and/or aren't exactly the core audience or fans of that particular game. Either they're going to buy it at the reduced price or they're not going to buy it. It's similar to the pirating situation: They're either going to pirate it or not play it if there's no crack yet. Do you really see people suddenly just paying full price for things they're not mad into? They'll skip it.

Again it's all about priorities. People buy multiple games more than ever on PC. Most people couldn't possibly have a library of 100s of games if they didn't use bundles, sales and resellers. Look at console players' libraries. A lot smaller. There's very little variation in price.

gizmo wrote: »

Hell, I'd happily take the point that what they do in general isn't anti-consumer.

Or at all anti-consumer. Do people even know what anti-consumer means? Saving a consumer money or giving them more choice is under no circumstance anti-consumer. Adding DRM, regional restrictions definitely is anti-consumer though and are done by the industry its self to combat reselling/piracy. Look how well that's turned out.

I'll always support my favourite games as directly as possible if they're catering to my values. Most people who have disposable income really don't use key resellers and they're not as popular as people make them out to be. My friend gifted me Crysis ME (2007) recently because he wanted me to stream it. He got it full retail price for €20 on steam. I told him he could've gotten it way cheaper if he got it from a key reseller but he said it doesn't matter because it was easy to gift over steam. I had to practically crack the game anyway because of an issue with that game running @ 32bit. It doesn't show up as me playing it on steam now because of this (which I don't mind too much). The official servers are also no longer supported so there's no multiplayer. And the game continously prompts me to install anti-cheating software on top of its DRM... every time I boot it up. To me, this is exactly the kind of game I buy from resellers. Support dropped, ancient issues unsolved, development studio and publisher doing absolutely nothing interesing anymore and not catering to their original audience.

FAILSAFE 00 · 23-06-2016 5:51pm

https://www.youtube.com/watch?v=mBakPg6x63Q

gizmo · 27-06-2016 3:06pm

Robert ninja wrote: »

@gizo

We've heard all this before about piracy and it's not true or exagerated. I'd say a large amount of people who buy resold keys don't have a lot of money for video games and/or aren't exactly the core audience or fans of that particular game. Either they're going to buy it at the reduced price or they're not going to buy it. It's similar to the pirating situation: They're either going to pirate it or not play it if there's no crack yet. Do you really see people suddenly just paying full price for things they're not mad into? They'll skip it.

Again it's all about priorities. People buy multiple games more than ever on PC. Most people couldn't possibly have a library of 100s of games if they didn't use bundles, sales and resellers. Look at console players' libraries. A lot smaller. There's very little variation in price.

Funny that you mention piracy actually, given some of the fees which certain companies have been hit with over the last while and the general distaste towards G2A and their ilk expressed by others, I'd wager RageSquid aren't the only ones wishing some people had just pirated their game.

You're certainly right with the above though, the pirated game being equal to the lost sale has always been a nonsensical argument. At the same time, however, so too is the point that people would suddenly just stop buying or playing games if they couldn't download or acquire them cheaply. Yes, they'd probably buy less in terms of volume but, as I said above, using the higher volume of sales argument that some of the resellers use doesn't do studios much good if they're not able to survive on the reduced revenue it leads to.

This isn't a retailers good, resellers bad argument though. There are resellers who use basic economies of scale to offer discounts to customers with which I'd wager no one has any real problem with. In these instances practically everyone gets what they want and no one is being screwed in the process.

What would be even better is, of course, if we saw the larger price variation you mention. Personally though I'd prefer if this came from pricing that was perhaps more reflective of the costs involved in the production of the title combined with a more organic price drop of older games over time. Again, the objective would be to ensure that content producers are adequately rewarded for their work while customers get access to a wide range of varied content at prices which everyone can afford at some point.

Robert ninja wrote: »

Or at all anti-consumer. Do people even know what anti-consumer means? Saving a consumer money or giving them more choice is under no circumstance anti-consumer. Adding DRM, regional restrictions definitely is anti-consumer though and are done by the industry its self to combat reselling/piracy. Look how well that's turned out.

I italicised the "in general" part to draw a distinction between their actual business model and the Shield nonsense they've been peddling for the last while. It's the latter I'd lump into the "anti-consumer" bracket there.

That being said, if the reselling market grew to the point that it started to actively harm larger publishers and they in turn normalised prices across all geographical regions in order offset the damage done to it, would that be classed as anti-consumer? I mean, everyone is now paying the same price for the product, that's fair, no?

dunworth1 · 27-06-2016 5:48pm

FAILSAFE 00 wrote: »

-levelcapgaming youtube-

from that i gather that the problem is some games on g2a are stolen keys but not all are so really the issue is with credit card companies not deactivating card fast enough/people reporting them stolen

he even mentions about how to convince people to pay double the price
and doesn't really have any solution.

the clear solution is for devs/publishers to reduce the game prices.
if they are loosing out as much as they are making out well then

reducing the price to the same or close to g2a prices would get people buying from them instead of g2a.

its hard to justify 70 euro these days for a game when often enough you have to buy dlc and the game ends up costing 100+

id much rather pay 30 odd for the game and then probably another 20 or so on dlc.

with the lower price i get to buy more games and play more so to me personally its a good deal that i will continue to do until such a time when devs/publishers reduce the prices.

similar thing happen in the movies/music industry it was rampant with piracy but Netflix/spotify came along and stopped a huge chunk of it (yes i know it still happens)

the point i'm trying to get across is offer the product at a reasonable price and people will pay

Key resellers & grey markets

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