Ultimatum for G2A from Gearbox Software threatens promotional deal
Gearbox Software shocked many with an out of the blue message addressing G2A about their practices and impact on the gaming industry. Having recently announced that Gearbox Software had a promotional partnership deal for a collectors edition of Bulletstorm with G2A this seems like an unlikely turn of events. From what we have been able to ascertain Gearbox Software responded to direct concerns voiced by John ‘TotalBiscuit’ Bain. TotalBiscuit confirmed in a recent video titled ‘What happened to G2A and Gearbox’ (https://www.youtube.com/watch?v=cac0ACHux-Q&t=327s) that he had spoken to Steve Gibson, Gearbox Head of Publishing, about the way in which G2A go about their business. TotalBiscuit stated that in that conversation he expressed particular concerns about the way in which the keys are obtained. He also highlighted the impact on indie developers as a result of sales for which they receive no compensation and the services which G2A have created as solutions to known issues on the platform which not only fail to solve the issue but are used by G2A to profit even more. At present G2A is accused by many as actively profiting from the struggles of the developers, publishers and other retailers as a result of the problem G2A has apparently facilitated and encouraged. A TwitLonger that TotalBiscuit recently wrote also breaks down the issue if you prefer not to watch the video; http://www.twitlonger.com/show/n_1spp1mm.
This brings us up to present where Gearbox Software Publishing decided to give G2A an ultimatum in which they have been requested the following changes;
Before Bulletstorm Steam launch, G2A makes a public commitment to;
- Within 30 days, G2A Shield (aka, customer fraud protection) is made free instead of a separate paid subscription service within terms offered by other major marketplaces. All customers who spend money deserve fraud protection from a storefront. To that end, all existing G2A Shield customers are notified by April 14th that fraud protection services are now free and they will no longer be charged for this.
- Within 90 days, G2A will open up a web service or API to certified developers and publishers to search for and flag for immediate removal, keys that are fraudulent. This access will be free of charge and will not require payment by the content holders.
- Within 60 days implement throttling for non-certified developers and publishers at the title, userid, and account payable levels for a fraud flagging process. This is to protect content providers from having large quantities of stolen goods flipped on G2A before they can be flagged.
- Within 30 days, G2A restructures its payment system so that customers who wish to buy and sell legitimate keys are given a clear, simple fee-structure that is easy to understand and contains no hidden or obfuscated charges. Join the ranks of other major marketplaces.
Gearbox Publishing has stated that if changes requested are not made by the 7th of April 2017 (which Bulletstorm's release date on Steam), they will be actively taking advantage of a clause in the promotional deal contract. This will enable them to back out of the deal with G2A, and they have threatened not to be willing to work with them in future as well.
For those who are not aware of G2A or how their service operates it is a bit like an auction site. Users can list the game keys that they have, often at way below the market value and other users can purchase them. In doing so the person who listed the item gets a portion of the sale and the rest of the sale value goes to G2A. The original developer of the game does not get a cut unless it was them who listed the game keys. G2A, Kinguin and other similar sites are often described as grey markets. A grey market is when ‘a market legally circumvents authorised channels of distribution to sell the goods at prices lower than those intended by the manufacturer’. Comparisons could be made to Ebay, Amazon and even used goods shops like CEX and Game’s used games section. These mostly behave in the same manner the case of stores like Game, Gamestop and Target this has become a crucial part of their business to survive.
In many cases, these sites do use keys that have been legally obtained, and users are only looking to sell on unused games that they never redeemed and make a few dollars back. However, it is blatantly clear that the system is being gamed by those selling on keys that have been either stolen or fraudulently obtained via other means. This generally either involves exploiting region values, reselling on keys from bundle sites or more seriously those selling keys that were purchased using stolen credit cards. Kotaku spoke to one individual on how they had gone about obtaining keys which they then sold on via G2A which can be found at the following link; http://kotaku.com/g2a-scammer-explains-how-he-profited-off-stolen-indie-g-1784540664.
Outside of using stolen credit cards, it has been documented that some individuals are submitting false press key requests to PR companies, developers and other distributors under the name of well-known YouTube, streaming and other online personalities. In response to this problem websites like https://www.keymailer.co/ and https://www.terminals.io/ have started to gain popularity in recent years. Sites like these enable streamers and YouTubers as well as websites like Charede Gaming to sign up and gain approval or accreditation. After which they will be connected with Developers and Publishers to get keys by either requesting them or being offered them. This not only helps make the process easier for those who are not so familiar with the traditional method of getting press copies of games but also enables the developers and publishers some assurance that those they are handing out keys to are the people/organisation they claim to be. Those using these and other similar websites are often required to submit links to their coverage. This helps verify that the key has been utilised for the intended purpose and helps reduce the number of people who are trying to game the system. In some cases failing to provide the coverage may negatively impact your statistics on those websites and can lead to your account being banned or in negative standing. A status which developers and publisher can often see and use to inform their choice whether to work with you or not.
Another method which is known and used more often is the use of bundle sites in which you can pay as little as $1 for a variety of keys each month. Many of those sites are working with developers to help charities or actively work with indie developers specifically to help their games gain more attention and wider distribution. The full extent of the damage is not known. However in one article with PC Gamer (http://www.pcgamer.com/tinybuild-claims-g2a-sold-450000-worth-of-its-keys-without-paying-a-penny/) TinyBuild stated that keys for three different games they have published (Party Harder, Punch Club and SpeedRunners) alone amounted to approximately $450,000 (retail value) in lost in transactions made on G2A (more than 26,000 keys). Many of the keys from the incident were accused (by G2A) to have come from bundle sites, but to my knowledge, this has never been verified.
In some cases, developers have felt forced to sign up and list their own keys in an attempt to kerb the number of people listing their keys on the site. Although companies like TinyBuild have managed to avoid doing this so far, but many others have gone ahead and done so. Developers in this situation have to list the keys well below market value otherwise they will be undercut and gain little to no benefit of being on the G2A website.
Many argue that what G2A and other similar companies are doing is perfectly legal and that they have no obligation to developers, consumers or the industry in general to police this matter. Although I acknowledge that G2A themselves are not the ones sourcing the keys with stolen credit cards and that they do have some legitimate users they have encouraged and facilitated a growing problem. They have chosen to turn a blind eye to those who are using illegal and questionable means to obtain keys to turn a profit via the G2A website. As a result and due to other actions by G2A they are failing to support developers and have opted to engage in profiting further via services they have offered such as G2A Shield. Many developers, publishers and end users feel obligated to use these services to try and control the fraud that is going on via the website even though it offers no real solution essentially allowing G2A to double dip. Personally, I feel G2A is acting in an immoral fashion, and actively hurting the industry by facilitating fraud and other crimes via their website and services.
Although not committing a crime directly G2A are more than aware of the issue and actively profiting from it by further exacerbating the problem. Should they have some legal obligations to prevent it, face repercussions for facilitating it and failing to take appropriate action? Mainly I feel they are an accomplice at this stage and should take more responsibility for making a change. I fully acknowledge that problems like these are a hazard of doing business, especially in one that allows users to list their items rather than it being a storefront that deals directly with developers but it doesn’t excuse ignoring the issue or a half-hearted attempt to solve it. Unlike G2A storefronts like Steam, GOG or Green Man Gaming (disclosure: I am a partner with Green Man Gaming) source their keys directly from developers and give the developers control over pricing. G2A doesn’t allow developers to set prices for their products which they haven't provided or ensure that they get a portion of every sale.
At the time of writing this, it is a hotly discussed topic and one that is starting to gain traction as the result of TotalBiscuit’s video and other outlets that are becoming increasingly vocal on the issue. I hope that through more open discourse on the matter people will realise what goes on, the pros and cons of using grey markets and the impact it has for better and worse. Some individuals and organisations passionately defend such sites, but likewise, many like myself perceive them as actively damaging the industry. We would love to hear from you, your experience using such sites and your opinions on whether people are using their services fraudulently, if G2A themselves should have a legal and/or moral obligation to do something about this and if you think G2A will follow Gearbox Software’s demands. Let us know your thoughts in the comments.
Research Material and quoted material
SidAlpha Video: https://www.youtube.com/watch?v=nH57yXBWkD0
TotalBiscuit Video: https://www.youtube.com/watch?v=cac0ACHux-Q&t=327s
TotalBiscuit’s TwitLonger: http://www.twitlonger.com/show/n_1spp1mm