The claim is that G2A acts as the equivalent of a fence.
Let me explain. Many crooks want money. A lot of illegal activities generate what looks like value but it's hard to turn into money and unless you do it's useless. A stolen television is valuable but why would I pay 60% of retail price to some geezer in a lock-up at 2am for what is obviously a stolen TV? The Fence buys stolen things from crooks for a fraction of their value, then operates a seemingly legitimate business which sells those things to ordinary punters to collect the difference.
Being a Fence is a crime. "Receiving stolen goods" we call it in most places. You're guilty if you know or should reasonably have known that the goods you got were stolen.
The argument against G2A is that logically the stuff they're buying for cheap can only exist if it's being obtained by crooks. A week after a game is released for $25 the _only_ reason somebody wants to sell 100 codes for $5 each is that they used stolen credentials to get those codes and are cashing out.
Many of those codes are readily available via legitimate means - indie games often get published in bundles and the codes get resold, GPU makers and developers often do giveaways with free game keys, etc. There are many cases in which the keys are obtained in perfectly legitimate ways.
I mean, it seems like they are removing games purchased fraudulently, Steam notifies you when one of your games is removed for this reason, yet despite many G2A purchases I'm yet to have a game removed, is there any evidence that this is actually as rampant as is claimed?
Reselling keys from bundles is also a problem. I don't have a link handy but I was reading just the other day some indie developer complaining that they're seeing more keys from Humble Bundle being redeemed many months after the bundle that had them than actual sales on Steam, and they claimed G2A was the cause (being a means by which people could sell their old bundle keys that they didn't want).
More specifically, they said this practice serves as a very strong discouragement from indie games ever participating in bundles again, because the bundle economics depend on many (most?) of the keys either not being redeemed, or being redeemed by people who would otherwise not purchase the actual game. But when people who want the game are able, many months later, to pay a fraction of the price for a key sourced from a bundle, this really hurts sales for the game and makes the bundle a net negative instead of the positive it's supposed to be.
> this practice serves as a very strong discouragement from indie games ever participating in bundles again, because the bundle economics depend on many (most?) of the keys either not being redeemed
This isn't exactly a compelling argument in favor of having the bundles around.
What do you mean? Bundle terms usually forbid redeeming of the keys by anyone other than the bundle purchaser, but that generally can't actually be tracked (I know Humble Bundle always tells me that the steam keys should only ever be redeemed by me, but ultimately they're just keys with no technical means of enforcing that restriction). The fact that people are breaking these terms and selling the keys doesn't mean the concept of bundles is flawed. In the absence of marketplaces like G2A key reselling isn't a big deal because you really need the marketplace to find someone else who's willing to pay for it.
The fact that people are breaking the terms of sale doesn't necessarily mean the concept of bundles is flawed. The fact that the economic viability of bundles depends on the bundled products being purchased almost exclusively by people who don't want them does indicate that the concept is flawed.
I'm not talking about like "buy Awesome FPS 2, get Awesome FPS 1 in a bundle for $1 more", I'm talking about bundles that collect a bunch of disparate games. People buy these bundles because they only want a few of the games. And then companies like Humble Bundle sell bundles where you don't even know what they contain until you buy them, so it's entirely possible to buy a bundle where you end up not playing any of the games in the bundle.
Bundle operators and game developers engage with consumers on the grounds that the keys won't be resold individually. However, they have no way to control this. So they make reseller/G2A responsible for complying with terms of an unenforceable honor code. Seems a little arbitrary to me. It's akin to a grocery asking you not to sell eggs individually from a carton you just bought from them. (How are they gonna enforce it?... And as a consumer, are you even OK with not having full control over what is now your property?)
I think this is a problem with the business model, rather than the problem with "unethical" resellers. So you either give up on the business model, as many game devs are doing, or you find ways to enforce it. Either start suing users who resell keys, or partner with the likes of Steam to create a system in which keys can't be activated individually.
The problem with resellers like G2A is there's no large legitimate source of keys to resell. They may not be responsible for stealing the keys / breaking terms of service on key sources themselves, but they are acting exactly like a fence for stolen goods, and they know the keys they're selling are almost certainly not legitimately allowed to be sold in this way.
If I bought that key in a bundle, I own it fair and square and I'll do what I want with it. If resellers are helping with that, I view that as a positive.
Except you don't. Every bundle I've been a part of says you can't resell the keys. That's kind of the whole point of the bundle; you're not expected to actively want to purchase every item in the bundle, but the value you get out of it is still worth more than you paid for it, and the developers of the software get to reach users that otherwise wouldn't have bought the game anyway, thus gaining a bit of money from those users and, hopefully, causing increased word-of-mouth sales, or for a multiplayer game causing the player numbers to go up and thus produce better network effects.
If you resell the keys, you're breaking the bundle's terms of service and actively harming the developers involved.
Imagine if they sent you each game on a separate CD and told you "but don't sell the ones you don't want", you'd think that was ridiculous, right?
That's exactly how stupid this idea is. I own the products I purchased, just because it's not a physical copy doesn't mean I have any less rights to it. I highly doubt their ToS would hold up, I consider it highly immoral to attempt to deny people the rights to sell or trade their own purchases.
It seems odd that there's no way to track this, seems a trivial thing for steam to add.
Even something as simple as a checksum of the game key needing to match the last digit of your steam id would solve the problem, and would be trivial for humble/steam to implement. Every time someone requests a key from their bundle, the bundler just had to find a remaining key that matches.
Edit: I originally speculated that perhaps it wasn't in Steam's interest to support this, but thinking about it, they're losing their cut of these dodgy sales.
For a short while, you could only redeem games on steam by linking your account with Humble Bundle. They would redeem the key with a server side API. This didn't last long, though, and they reverted back to just giving you the keys manually.
> Reselling keys from bundles is also a problem. I don't have a link handy but I was reading just the other day some indie developer complaining that they're seeing more keys from Humble Bundle being redeemed many months after the bundle that had them than actual sales on Steam, and they claimed G2A was the cause (being a means by which people could sell their old bundle keys that they didn't want).
The thing is, there's no guarantee that that is the case. I still have unredeemed keys from (year) old bundles that I intend to redeem, I just haven't got around to it because there are more important things to do with my time.
The responsibility for that one lies solely on the developer deciding to put the game in a bundle. Indeed I'd say that was a bad decision on their part.
It's not supposed to be a bad decision. Bundle economics actually work¹ in the absence of key reselling. Bundle keys are not allowed to be resold by the terms of any bundle I've ever looked at, so it hardly seems fair to blame the developers when the users are the ones breaking the ToS, and marketplaces like G2A are actively soliciting this behavior.
¹For the most part. It's not always good for 100% of the people involved, but on the balance it's supposed to be a good deal for everyone.
So basically, bundle economics work if you ignore the existence of the market for those games.
Yeah, that sounds about right.
You would never cut a software developer slack for putting "no reverse engineering, no exploitation" in the ToS and then being surprised when vulnerabilities are discovered, business people need to consider basic stuff like this too. Markets for things exist outside of yours.
Additionally, I never even agreed to a ToS buying the early Humble Bundles at least and a hidden ToS is unenforceable at best.
A lot of those game bundles intentionally underpromote the bundles so that they get maybe 100 sales, then they resell the keys for higher margins with no cash going to the dev.
If a bundle company asks for 10000 keys and their bundles are clearly only selling 200 units each, their bundles are just a front for the real money. Legit operations return all unused keys. Dirty operations (the vast majority of bundles) will block your emails the minute you mention returning keys.
But unlike stealing the TV, if somebody stole a bunch of codes, isn't it the same as pirating the game? However the devs claim it's actually worse than pirating - it actually costs them more when codes are resold. Why? Where the additional cost is coming from?
If I use a stolen credit card to buy a code for your game, eventually there is likely to be a chargeback/refund processed when the credit card owner/company realizes that it was fraudulent. Chargebacks/refunds can sometimes be things that have real penalties associated with them and that can require time investment from you the developer to deal with.
Another, less concrete cost is that of incentivizing bad behavior. If I cannot sufficiently move a certain type of stolen goods, I'm less likely to attempt to steal that type of good again in the future. However, if people choose to pirate a game instead, the bad actor is not rewarded and might realize that he can no longer move that type of product.
Yeah true but the problem with chargeback happens regardless of whether somebody bought the codes or not - unless they bought the codes with stolen credit card, and then the store selling it, not the developer, gets the chargeback. So I don't think this scenario applies here. Developers usually have publishers to deal with things like credit card charges.
Aside from the cost of credit card charge backs, consider that these are (mostly) customers who think they are buying the game legitimately and just getting a good deal. That money is going straight to g2a instead of the devs/publishers.
Maybe a customer wouldn't buy the game at the full price, but since they're not pirating from the get-go, that shows they are a customer willing to spend money. Maybe they wouldn't buy the same game or as many games, but it's possible they'd still be spending some money on games through legal (but more expensive) means if they knew g2a was just piracy with more steps.
Probably because banks will do chargebacks for those stolen credit card purchases and developers will have to deal with that.
Many years ago I experienced something like that with Paypal where someone bought a license for my software and then immediately made a chargeback claim. And on Paypal unless it is a physical delivery with a tracking number, buyer always wins. I lost some time while communicating with Paypal about the chargeback.
I thought the reason platforms such as Steam collect an outrageous cut of 30% is in at least covering the costs of this fraud, which is in any case still a tiny fraction of that percentage.
Steam itselt dont sell keys to end users at all and ability to sell gifts is really limited. Though game developers / publishers can generate any reasonable amount of Steam keys for free and sell them outside of Steam where Steam itself get absolutely nothing.
This is where most of fraud take place and game developers lose a lot of money on it.
Another unmentioned cost to the developer is the support costs of dealing with someone who believed oneself to be a legitimate customer by obtaining and using a "legit" code previously obtained through not-so-"legit" means. With traditional piracy, the pirates know full well that they're on their own and can expect close to zero support (and in fact outright hostility) from both the original developer and the broader community.
In addition to the points about chargebacks, there's the additive factor of validating purchases on G2A. Consumer A has a successful purchase on G2A, which results in a transaction where they paid money and got a product. They had a positive experience (getting a game for cheaper than what they would pay for it elsewhere), which causes Consumer A to talk to potential consumers n both about a place where they can get the game for cheap, and to disparate the developer for charging so much when someone else will sell it for cheaper.
It damages their brand (vs. piracy, which unless you're using invasive DRM is net neutral at worst, and positive at best), generates negative sales additively (vs. net neutral to positive sales based on word of mouth advertising), and drains the development house's emotional and fiscal capital as they deal with the fallout.
> They had a positive experience (getting a game for cheaper than what they would pay for it elsewhere), which causes Consumer A to talk to potential consumers n both about a place where they can get the game for cheap, and to disparate the developer for charging so much when someone else will sell it for cheaper.
I don't exactly see how this is worse than piracy. isn't it basically the same as "Customer A gets a game for free of {torrent site}. they tell all their friends about {torrent site} and their favorite bittorrent client."? the only way it's different is if most consumers have some moral objection to torrents. in my experience, very few people who work outside of software (or other IP-based industries) really care. they only pay if it's less trouble than torrents.
The argument that I find most persuasive, and that as a fellow game developer resonates with me the most, is that marketplaces like G2A that traffic in stolen goods erodes the perception of value for games. Why would a consumer pay full price for your $25 indie game when they can purchase it for half that on launch day? At best G2A and its partners are exploiting an arbitrage opportunity around regional pricing. More likely and I suspect most often, they are front for money laundering operations that exploit credit card fraud victims, developers, and game enthusiasts who might have their keys revoked.
The chargeback thing, plus most games are fiddly and complicated to pirate these days. (And many multiplayer games can't be pirated at all if you want to play online.) IMO, the #1 reason for the decline of PC game piracy is that Steam makes it so much easier to just buy the game.
But buying a G2A code is almost as easy as buying from Steam. And a lot of people who wouldn't pirate for ethical reasons don't realize it's not legit. So G2A turns loses you sales from people who would otherwise have bought the game legitimately.
3. Fraud and money laundering (e.g. stolen credit cards)
I think that the reasonable position and that of anyone not being incentivized to say otherwise would be that 1 should be allowed while 3 is already illegal and should be cracked down on.
On the 2 my position is that this is not something that should be addressed by regulation but that it's the responsibility of the publisher. Don't want to see review keys ending up on second-hand sites? Put in restrictions (like limited time) on those licenses. If the second-hand market for keys you ave away for free ends up eating at your margins, maybe you gave away too many free keys or price too high.
As for regional pricing, IMO it's both counterproductive and futile to keep national markets separated.
>IMO it's both counterproductive and futile to keep national markets separated.
So, developers in the USA should simply not sell their games overseas then? Let's say an indie game costs $10 in the states. In Thailand, the average monthly income is ~$220. So someone in the US could work 1 hour and buy the game, but someone in Thailand would have to pay more than a day's salary for the same game!
The game is supposed to be affordable! Regional pricing can help a developer charge less for a game in a country that has lower standard of living. Maybe $1 instead, so it's more like 1 hour of work for the average person. But if US consumers can buy the game for $1, why would they spend $10? If US consumers did that, the developer would suddenly be making 10% or less after fees. There is no way they could profitably develop games after taking that kind of hit.
I'm not saying you're not wrong with it being futile to keep separated, but there is a very good reason for it.
Well, whether you can afford something or not doesn't have to be a matter of nationality.
This is ultimately the reason I used to pirate software as a young person.
I grew up in a poorer northern UK town. Chucking 50 quid at a PlayStation game was, let's call it "highly impractical". So me, and most of my friends, would burn CDRs and mod the consoles.
I think the correct answer to this, ultimately, if you care about having the widest audience, is charging for the product, but not putting _too much_ effort into piracy being impossible.
The middle classes will still buy your stuff because it's the polite thing.
>The middle classes will still buy your stuff because it's the polite thing.
Not only polite, but easy. If you could afford the game, you buy it, it downloads, you play. Piracy is more work, but if you value that time spent as less than the price of the product, of course you will pirate.
I used to pirate a lot of music. I'd have to find the title on some tracker, download the album for a couple hours (shit internet at the time), import it, deal with metadata, deal with album artwork, import into my device. It was a lot of work, but I couldn't afford $1 a song! I definitely can afford $10 a month though, and spend probably 2 seconds finding a track on spotify to play it on any and all devices. Worth it. Easy. Affordable. But if you charge too much, don't be surprised when your users are willing to take the long way and get your stuff for free.
Nothing will ever be uncrackable, so why waste expensive engineering salary on the digital equivalent to the war on drugs?
Okay, so in this scenario, either 1) the developer is losing money on every sale to a Thai customer, or 2) the developer is overcharging US customers. Either way, the developer does indeed seem to lack any incentive to have separate pricing for Thai customers; why take on those support costs for a fraction of the revenue when you still have Americans paying full price?
The demographics that can't afford the game (e.g. certain overseas countries, or low-income individuals even in domestic markets and otherwise-more-affluent overseas markets) will be out of luck only until the game goes on sale (whether temporarily or permanently; older games tend to be cheaper than newer games).
In other words: setting a lower pricepoint for specific countries to attract more sales in those countries is a pretty major footgun when it comes to actual revenue from those sales. Better to keep the price even across all markets, then only drop the price if you want more sales (and in smaller increments than "here's a 90% discount just because you happen to be in Thailand"). Trying to establish different prices for different locales is a premature "optimization" at its worst.
The actual reason for separated national markets was that selling to a national market once upon a time involved actually getting a physical good (e.g. a cartridge or optical disc) to a customer in a different nation; for most game developers, it's easier to go through a distributor for that particular market than to try to tackle all the logistics themselves. Nowadays there's no physical good being exchanged, so there's really no point to dealing with that kind of market segregation.
It's a pretty clumsy system because it's putting a physical constraint on a digital product that's otherwise possible to get everywhere on earth, provided some asshole in a boardroom doesn't throw a fit (which is evidently what happened when region locking games became common). It's a physical constraint that doesn't even work as intended, in fact it probably harms the brand and the product more than anything.
Not everyone in Thailand is broke. There might be a lot more broke people in Thailand than in the U.S., and on average the sprawling land area of Thailand has less wealth than the land area of the U.S., but I bet there are a lot of people in the U.S. who, like their Thai working class counterparts, also can't afford a $60 game. Now the working class of Thailand gets a game that's right in their price bracket while the working class of the U.S. does not.
Averaging an entire countries wealth to set a price worked pretty nice for the people of Thailand in this example, but obviously burnt the poor in the U.S. pretty bad. If your goal is to get your game into the hands of the most customers, consider offering 'regional' pricing for all the homeless in central park who might live within a couple dozen feet of the most expensive apartments in the world. It turns out regional pricing kinda sucks because wealth isn't distributed evenly across any region.
The economy is global, not regional, there are rich and poor people everywhere in differing and ever changing proportions independent of how borders might be drawn on the map. If you want to make it affordable to an economic bracket, go ahead and lower your price or offer low income credit or something, don't make it so you can't buy your digital game while connected to the internet in an arbitrary country.
I think this is the fundamental point where you'll win or lose people.
If it's a game made for fun without income being a goal: yea, totally. And many of these are free for that reason, or "sold" on name-your-price platforms.
If the game was made to make money: hell no. Games are not supposed to be affordable. Games are supposed to be profitable to the creator, the price is set to optimize that. If regional pricing cuts into it (i.e. due to resales) more than it makes, it should not be done. "Access to game X" is not in any way a right or necessity, there's no obligation to make it available everywhere.
A seller want to sell their good to every buyer at exactly the highest price that buyer is willing to pay. The seller can't do that if they give everyone the same price so they look for ways to segment the buyers into groups which have similar valuations and charge each group a different price.
If you pay attention, most pricing schemes are about market segmentation. Region locked items is obviously one. Most digital goods are sold at prices that decrease over time: it's basically segmenting the market by time. Buyers with high valuations buy first, those with lower valuations buy later, etc.
It's nigh impossible for a video game to be rent-seeking, since games are completely optional and often worse to play than not play. Only the few games that infect a whole culture can be thought of as needs subject to rent-seeking due to social pressures.
> IMO it's both counterproductive and futile to keep national markets separated.
And honestly, I think its a shame, because regional pricing makes a lot of sense.
Selling a AAA game at 2 bucks a pop in the US doesn't make sense. You have to get back the 10s of millions of dollars you spent somehow (if the game is good!).
But that locks out underprivileged markets, who can't afford 60 bucks games. They'll likely just pirate it then. Regional pricing is a nice solution to that. Unfortunately then people abuse it.
Wouldn't it make sense to region lock cheaper versions, while keeping the "fully priced" version for non-underprivileged markets unlocked? AFAIK that's how it is done, and it makes some sense. However, I admit, I thought through the scenario for a grand total of 5 minutes, so I probably have missed something.
A bit of a sidenote before I address your point directly: do you have a source confirming that all those companies that favor regional pricing for their games use labor from "underprivileged" markets?
As for why we shouldn't be able to, there are two good reasons:
1. If everything is priced at a regular price, no one in "underprivileged" markets will be able to afford those games, so cue piracy.
2. If everything is priced at the price point of "underprivileged" markets, it makes zero sense to produce those games, as it would mean that the company will surely go broke by doing so.
I get it that this is a joke, but more seriously I'd argue most labor is "region locked". Likely to within a few dozen miles of where you live.
It's actually fairly difficult to just buy labor from another region without doing the equivalent of "buying a regional console" (i.e. building a local office/factory, where people actually speak the right language).
Instead of price discrimination based on location, do it by time.
Start at $69.99, in English only. Then add language localizations in order of decreasing mean disposable income for native speakers. Gradually drop the price by $5 per quarter, but also randomly put it on sale for 25% off for 36 hours at a time, to catch the folks who wishlisted the game and are watching the price.
Rich folks buy at $70 and play it right away. Poor folks wait 3.5 years and then get it for $5 .
Why should a development studio have to wait years before they can pay off the costs of production? The only people who have some inherent right to enjoy their product are the ones who created it. Samuel Clemens directed that the Autobiography of Mark Twain be published 100 years after his death, which was 2010. Why did we have to wait for that? Because of intellectual property laws.
Poorer people have to wait, because the developers have high rent and daily expenses, and price discrimination helps the supplier capture enough of the trade value of their good that they can pay those expenses.
A software program is unlikely to have repeat buyers. It's not like corn or toilet paper, where you use one up and buy another. So, if you hypothetically line up every potential buyer by the price they are willing to pay, you can capture the maximum value of trade by walking down the line and selling one copy to each person at their price. Once you sell one copy to everyone in line, you're done. But buyers keep their price secret, or lie about it, and paying your walking salesperson would eat up all that extra money. So instead, you put your price up on a big board, decrease it over time, and when it drops below a buyer's price, they just step up to the counter and purchase.
Paying more allows a customer to buy earlier. Waiting in line longer allows a customer to pay less. How is this unfair? And if it is unfair, how is that the supplier's fault, rather than being inherent in the copyright system?
Here in Norway we travel to Sweden and buy mainly meat, tobacco and alcohol, due to lower taxes.
In 2017 it was estimated[1] to be about 2.6 billion USD worth. This is in a country with some 5.5 million inhabitants, many of which do not participate in this due to distance to border.
Businesses and the government aren't too thrilled about this, for obvious reasons.
Just make it localized in the region language only for that price. Ok, doesn't work with Nigeria, since they speak english. But it would work in Asia, and in a lot of other African and south American countries.
On that note: why not just skip geography entirely? Just sell the localized versions worldwide, which each translation being priced according to what the users of the respective languages would on average be willing/able to pay.
I'd rather feel ripped off, but have access to a game, than to not have access to the game at all. Of course, its easy to say that now and in reality it probably drives people to piracy. Its a difficult problem.
Well, that's just not true. It can be, but most stores I know just focus on limiting your pricing based on geographical location, while making it harder to spoof your address. DRM just isn't a factor here.
That same game will be $30 in a year, $20 on sale shortly after that, and eventually you can probably find a sale for $10 while the game is still somewhat fresh. Why not schedule regional releases to coincide with the changing price floor in privileged markets?
Because anything that impacts availability will result in piracy.
If users can't or won't be able to afford it, they will pirate it. This cna be tempered with pricing strategies.
If it can't be purchased, people will pirate it (e.g. region locked games, even w/o localizations, or delayed releases by market) - pricing doesn't matter here - if users can't get it, they will just pirate it, sometimes especially because they know it's going to be released later, and that decision by the studio has made them feel second class.
If it's no longer available (abandonware, game developers that have gone out of business, etc) then people will pirate it. There are lots of platforms that are thriving on nostalgia right now because people want to pay for supported, working stuff. (For example, the resurgence of the Baldur's Gate and related games updates)
Take a look at any $streaming_service threads and you will see that anything that interferes with streaming service catalogs or pricing will yield shouts of "Arr" and people clearly stating they will pirate shows or use gray market streaming sites.
It's anecdotal but I suspect that most folks on this site are more comfortable with pirating movies or music, but often draw the line at video games because it is easier to relate to the development work done to make video games (even though modern blockbusters movies often have a lot of software development associated with them as well).
Because you'll get a lot more sales in developing countries at $10 when the game has the latest tech, is freshly released, has load of buzz and is being heavily marketed, than you would 5 years later for the same price.
Plus in 5 years the company might not have the same sales and marketing teams, management or even owners.
I think your time table is questionable. Within a year, a $60 game will generally be $30, and $20 or less a year after that. I don't think you have to get total price parity for a regional release. Fewer people in the privileged markets are going to bother seeking out the game in another region to save $5 or $10 than they are to save $40 or $50.
I'm struggling imagining who can afford the equipment to run 'the latest tech' but will not be able to afford a game that uses it. I strongly suspect 'the latest tech' is important mostly to the privileged markets.
You might be right about the marketing. A hit game will probably be just as profitable later; maintaining or growing its own hype. The bigger problem I think is for games that are flops. Companies probably want to sell as many copies as possible before word gets out; and greatly staggering releases will result in a lot fewer copies being sold as you suggest.
Latest tech is far less important for games these days. I have a laptop that is 4 years old currently (admittedly it was pretty top end when I brought it) and it still runs latest games perfectly fine, and I'm still not really seeing any need to replace it. Last year's Farcry 5 ran at close to max settings.
Tech just doesn't make the gains it used to any more.
Back in the 90's a 4 year old machine would be lucky to even start a new released game, let alone run it at close to max settings.
Because no one wants to wait, so they’ll just pirate it. This isn’t judgmental. It’s just fact. That’s how consumers behave. If you don’t make something instantly available, people will pirate. Pricing is a mechanism you have to affect that given that you can’t sell at the lower price everywhere and the higher price will lock out people in certain places.
Piracy ain't forever, though; eventually folks (myself included) might end up buying the game for various reasons (chief among them being the relative bugginess of pirated versions, incompatibility with mods, inability to use online features, or sometimes even just feeling guilty).
For single player games that works. Artwork gets out of date, but hardly a dealbreaker (perhaps in VR?). However multiplayer games might become less popular over the course of 2 or 3 years. To the point where they're less fun.
It does make sense but the implementation doesn't at all. There are plenty of people in underprivileged markets in the US who can't afford a $60 game. Plenty of people in Lagos who can comfortably afford that $60 game as well.
If I'm homeless in SF or NYC--despite being some of the wealthiest cities on this continent--maybe I should get that $2 regional pricing too rather than piracy (what me and plenty of others resorted to while living broke in uni).
If you want to sell your game to a wider market, don't go out of your way to make it harder for the wider market to access your product, just lower your price.
The reason regional pricing makes sense is that costs for most things are lower in other regions, like rent and food, and therefore so are the salaries. That would mean a $60 game can cost as much as half a month's rent.
Homeless people can own PCs and cell phones, believe it or not. But homeless, broke, college student, single parent, paycheck to paycheck, medical bills, etc. lots of reasons why a $60 game can be completely out of reach for a lot of people in the U.S., so why can't we have subsidized low income pricing here as well, if the whole point of regional pricing is to get games into the hands of people who can't afford to spend $60 on the title?
If you want more low income customers, set the worldwide price of your product lower. Don't arbitrarily ban entire countries from buying your digital game.
There's plenty of middle ground between $60 and $2, and it ain't like a $60 game can't go on sale every once in awhile to attract people who would otherwise be unable to afford it. Most games also get cheaper as they age, giving more permanent opportunities for it to be affordable to a broader and broader base.
Stadia will completely avoid the issue of key resellers since I would imagine they are completely removed from the system of keys issued from publishers. They also have only announced plans to launch in US and Europe currently and it may never make economical sense to have an African datacenter for Stadia.
You read this wrong. I was specifically mentioning AAA games with large examples to make the point more obvious. I then mentioned "if the game is good" because if it isn't you shouldn't expect to get your investment back.
I did NOT mean that you spent 10s of millions of dollars to make any good games. That would be silly in a world of Hollow Knight, Cadence of Hyrule/Crypt of the Necrodancer, Dead Cells, Gungeon and more, where indie games are kings.
> IMO it's both counterproductive and futile to keep national markets separated.
I tend to agree in general (also for films, songs...), but for expensive items like games the problem becomes that you then have to charge, in developing markets, prices that are simply too high. That incentivises piracy, which then eats up profits from your developED markets too.
I could save a ton of money on video games if I learned Japanese, considering the import copies tend to be way cheaper than the limited-production English runs of many niche JRPGs.
Depends on the game and how you buy it. In general, buying digital is easier and cheaper in the US, due to more PC releases and aggressive price cuts and sales. Japanese digital stores have much less frequent and less generous sales, and older games don't get their base prices reduced by much.
But if you buy physical copies, then the Japanese market might be cheaper simply due to the greater supply of older games, and potentially the currency conversion of newer games.
Learning Russian just to save money on videogames is a pretty bad strategy when you account for opportunity costs - though I accept people sometimes find great amounts of motivation in silly things.
Another, somewhat depressing, way of looking at it is that we all could have learned half a dozen languages in the time we spend browsing and posting to no real end on forums and various other media such as this. And e.g. learning Russian would make you feel good at the end of it. Whereas when you look back at the years of social media (which, again I would include sites such as this) it all seems like quite a tremendous waste of time. Yeah, we're totally changing the world by expressing and sharing our views, values, and opinions. /s
Another piracy incentive for people who prefer the original over the typically low-effort translation. Even applies when the original is in a third language, the English translation tends to be higher quality (for a multitude of reasons).
Guess it's another instance of "why we can't have nice things".
Not an expert, but surely regional pricing makes sense for countries with a much lower average income (or the reverse).
I want people all round the world to play my games, not just those fortunate enough to be born where their dollar is strong enough to make it affordable.
Disclaimer: I don't really know anything about exchange rates or value of money across borders. Cost of living and average income rates are complex!
It has been proven again and again that price discrimination leads to better market efficiency (more people get to use the product, and the seller makes more), but it is also true that pretty much everyone viscerally hates it.
Note that lowering the price during a sale, and lowering the price over time are other forms of price discrimination. (Here, the seller wastes the buyers’ time in exchange for a monetary discount, so people with less money and more time tend to get bigger discounts).
Also, different regions have different costs of living, even when the currency is the same. In the Bay Area, a game on steam costs as much as renting an apartment for a few hours. In the middle of the country, that same game costs almost half a week’s rent for a comparable apartment. From that perspective, it really doesn’t make sense to charge the same amount, even in the same country.
For physical goods, the solution is simple: just charge different amounts at different stores, and hope the cost of shipping prevents arbitrage.
Also, for some reason people hate special discounts and coupons less than regional pricing.
I wonder if steam could start selling points in the form of account-locked gift cards that are discounted differently in different markets. Maybe people would hate that less. They’d need better support for blocking mass game reselling across regions, but I’d guess that can be fixed with fraud detection.
The problem with review keys being done with limited time is that once the license expires, its the game and developer that get blamed and get poor reviews.
One of the biggest problem with resellers is review-key fraud
I wonder why Steam and others don't support extra field in keys that's fixed, but affects the generation algorithm[0]? So instead of:
1234-5678-90AB-CDEF
you'd have
1234-REVIEW-5678-90AB-CDEF
and for regular keys (say, with language discrimination):
3141-PLLANG-5926-5358-9793
This way it would be clear at the point of sale whether or not you bought the kind of key that was advertised. Steam and others could spam the press to proliferate information about what "REVIEW" vs. "xxLANG" vs. "ANYVER" vs. whatever means, so buyers using reselling platforms would be educated and could push the problem back to where it was created in the first place. Similarly, sellers of keys couldn't cheat and pass review keys as regular ones.
--
[0] - So that you can't derive a key of one type from the key of another type.
You can send a key out that will only unlock a Review "branch" of a steam game. The game itself can be clearly marked as a review copy and can even be a cut down copy of the game if you want.
For Void Bastards we often have multiple branches going out to different groups for different things.
This seems easy to address: when the game is first started with a review key, show a pop-up informing the player that this is a review key with certain limits.
This way, the player immediately knows he has bought an improper key, and can address this with the store it was bought. A journalist would not mind such a pop-up.
If the game stops working without warning after a few months, angry reactions are to be expected.
Key reselling from giveaways could be mitigated if we somehow figured out a way to make keys expire shortly after the giveaway period (ie, keys expire 5 days after the giveaway ends).
I'm not aware if Steam or other marketplaces have this functionality yet.
Steam has a page that lets developers query whether a key has been redeemed, but it only lets you query one key at a time. This makes it a pain to discover unredeemed keys. You also have no way of knowing if an unredeemed key is held by a legitimate potential player or someone trying to hoard and resell.
There is a complicating factor in that the way credit card companies operate, combined with how key sellers operate, allows for money laundering, such that the keyseller is not exposed to risk but the game seller is.
>IMO it's both counterproductive and futile to keep national markets separated.
One thing that many comments here aren't mentioning is that some regions have differing requirements to be able to sell in that zone. A common issue is the rating (MA, PG, R, etc). Once, when about to release in Germany (mid 90's) we had to change red blood to green in order to not get rated as R.
So it's not as though the developers can publish without strict regional forethought, so they may as well use a pricing model that satisfies the cost of living.
IMO regional pricing helps indie / smaller devs greatly rather than AAA studios. With regional pricing, the original price of 20$ game can be brought down to 15-10$, which can help middle class from developing countries. For AAA games, they may already have reputation and even at high price there are still fans that'll buy them.
For the case of credit card fraud, I wonder how hard it would be for developers to band together to provide a service that automates chargebacks against g2a, and maybe offers a discount code for each successful chargeback.
That would rapidly kick G2A off the credit card processing networks, assuming the allegations in the article are true.
i agree on your points. how option 2 would come about could imo only be a self inflicted would, like you said, give away too much, then complain later it hurt your margins, and even asking people to boycot a service due to your own misjudgements, that would be bad move from indie devs. (let's hope its not that :-))
No. This doesn’t make sense with digital goods. Everything is a copy. Nothing is being re-used. A second person is merely making an additional copy of bits. That person may not even download/copy the same bits as the first person if the game was updated.
Taken to the extreme a middleman exchange with infinite resells and instant transfers of ownership could limit total sales to peak concurrent users. I mean why should an American and a European each buy a license? They could just share a license and instantly transfer it back and forth when they want to play!
Gamedevs participated in bundles because it generated extra cash. Steam keys were an obvious way to distribute. A harsh lesson was learned. Going forward the fix is easy, don’t distribute keys. Assign the key to an account at point-of-sale.
The other lesson is to stop selling games and go free-to-play. It solves this problem completely! I hate f2p. But there’s a reason the industry is moved in that direction. Le sigh.
Downvote all you want. But digital goods which are infinitely reproducible and instantly transferable do not and should not follow the same laws as manufactured widgets. They’re covered by copyright law. And someone buying a copy of a thing does not grant them the right to let someone else make a copy of some vaguely similar thing 5 years later.
> Taken to the extreme a middleman exchange with infinite resells and instant transfers of ownership could limit total sales to peak concurrent users. I mean why should an American and a European each buy a license? They could just share a license and instantly transfer it back and forth when they want to play!
This can be mitigated by limiting transfer licenses by some days, i.e. after transferring you need to wait one month to transfer ownership again.
However, this wouldn't even be necessary. Just a process that is boring enough to do would avoid most non-malicious abuse. For example, to transfer the user that current has ownership of the key must went to a process of disowning the key first.
There is already better ways if you want to share your library with some trusted people: i.e. Steam's family share.
One isn't buying/selling the copy of the digital good, though, they are buying/selling a license to make copies for themselves from Steam's servers and to play said game.
G2A sounds like one of those sleazy companies that knows people are using their product to perform fraudulent sales, earns profits from those fraudulent sales, even encourages them, and then tries to hide behind the "common carrier" defense, ala Megaupload. There's a complex argument in these situations about principles of freedom, who's to blame, whether technology or laws and regulations should be used to solve the problem, etc. At the end of the day, we all know that they're sleazy, though, just like Kim Dotcom. There's no moral defense, only legal tactics. Patronizing sites like this makes you part of the problem, unless and until they start eating the fraud costs themselves or otherwise make an honest effort to prevent it. Things like the Steam code friend-account bot show how instead they intentionally commit the fraud.
That said, I also think the regional pricing needs to go. If publishers want to charge me more so they can subsidize cheap sales in another market, they're free to do that, but they don't get my sympathy when that backfires on them. G2A is still sleazy for facilitating it, but the publishers created that problem themselves.
If the problem is as pervasive as the devs portray it, these sites will quickly cease to exist--G2A would quickly gain a reputation for selling keys that will be useless after 2-4 weeks, and the benefit of getting the game for cheaper would be outweighed by the risk of the key going bad.
That doesn't seem to be happening though. I don't buy the argument that a huge number of G2A customers simply never notice that they've lost access to the game (not to mention what that implies about the quality of your game).
I'd never heard of G2A before this, but I'll be checking them out the next time I'm considering buying a game.
G2A does have a bad reputation but if all you search for is 'cheap game' or see an ad in pcworld or a sponsored shoutout on a youtubers channel then you don't know this. (a search for 'g2a' is much more informative that a search for 'cheap game')
Stories like this hopefully inform more people of g2a's reputation.
The other issue is if 1 in 5 of the keys on g2a aren't real but the discount is 30% off it's still rational as a customer to buy from them if you buy in bulk. It off-loads most of the cost of fraudulently obtained keys onto the developer in support costs and charge backs for fraudulent key purchases. Highlighting that rational does not equate to moral or even ethical.
Also the problem doesn't need to be pervasive across games to be devastating for a developer. If only 1 in 100 developers have this issue with g2a that doesn't stop it from possibly being a business destroying issue for that developer while it's a minor issue for the others.
The developers don't want people to pirate their games. They're just saying that pirating is less loss to them than the key resellers are, because the latter actually cost them time and effort on top of the lack of sale. Why not buy the game the honest way like a decent human being?
Right, but the person I replied to said they will now buy from G2A. My comment was specifically a reply to the text I quoted.
I didn't say they should pirate instead of buying from the dev or a legit store, I said why not pirate instead of buying from G2A. Personally, I don't understand why people who can clearly afford it would pirate (or buy from G2A) at all, so I don't exactly condone it, but if they said they would do the exact thing the devs said not to, then why not do the other option that the devs said they'd prefer?
> Why not buy the game the honest way like a decent human being?
I do. I haven't pirated any games since I was a student, about 15 years ago (and have even bought most of the games that I did pirate, since then). I feel like my comment was taken out of context.
Is there any legitimate reason for a site like G2A to exist? Reselling unused digital purchase keys isn't equivalent to reselling used games; once you redeem a key, you can't transfer it to someone else, so these are keys that have never been used. And people generally don't purchase a digital game for themselves, then change their mind and look to resell the key without having redeemed it.
Which is to say, as near as I can tell the only three real sources for keys on a marketplace like G2A are:
* Keys resulting from theft of fraud (such as buying with stolen credit cards)
* Keys purchased from region-limited discounted markteplaces and transferred into regions without the discount, such as described in the article
* Keys resulting from bundles, which are not supposed to be redeemed by anyone except the bundle owner
None of these three sources are "legitimate". Is there anything I'm missing here? Why would anyone have a digital key, which they have the full legal right to transfer without violating the terms of the store or bundle they got it from, that the paid for but never got around to redeeming? Having written that out now, the only real scenario that comes to mind would be something like Kickstarting a game, then changing your mind later on and selling the key you get once the game comes out, but I would wager that keys sourced in this fashion are so rare that they're not even a rounding error on a marketplace like G2A.
Personally I don't have a problem with the second region limited sale issue as a source. Plenty of businesses are built on arbitrage between regions.
However if these keys are not fit for purpose because they're region locked G2A should be pointing out explicitly in clear view what region a key it sells is from and they should be being forced to give refunds if it doesn't match.
Personally I'm against region locking and believe it's especially hypocritical in larger businesses (that say outsource their customer support to a cheaper region but do not allow customers to outsource their purchase to a cheaper region). But legally a company can license their software like this and G2A shouldn't be able to co-mingle explicitly different keys if they are licensed this way. I do concede there are good arguments (though not convincing enough for me in the general case) that companies will just not sell in a market if they can't stop resale of their items.
I do completely agree that G2A is a bad actor though. One 'simple' fix for their bad key issue is they could refuse to pay the same account (i.e. bank or paypal,etc not g2a account) for more than 1 key of any given game and rate limit keys sold to g2a from an account to 1 per day (which would limit the profitability of any stolen card before the associated payment option is blacklisted).
Why does the business model of bundling invalidate the business model of reselling keys?
There is a thriving business of people buying up Dewalt cordless tool combos (at a deep discount, especially when they're on sale), and then parting them out on eBay. Should Dewalt be able to prevent this by enclosing some faux contract alongside their tool bundles?
We should be moving towards a world where a "key" has properties more akin to a physical item, rather than less.
Because the business model of reselling keys is built entirely upon a combination of fencing stolen goods and encouraging people to violate the terms of service of the stores they're buying keys from. There's no legitimate market here, and thus no business model worth protecting.
Remember, we're not talking about the equivalent of selling used digital games. Once someone redeems a code, they can't resell it.
Yes exactly. We're not even talking about the equivalent of selling used digital games, but rather the equivalent of reselling new in box merchandise.
You didn't address the core of my argument, which is why should "terms of service" be able to carry post-transaction restrictions meant purely to implement a tenuous business method?
A digital key is not the equivalent of "new in box merchandise". A digital key is a technical means by which to add a purchased item to your digital library. The ideal behavior is to not have a key at all but rather, once you purchase the item, to just have be added to your library automatically. That's the model that digital purchases are working towards.
Physical merchandise exists before you purchase it. It costs money to produce, any unsold units are a negative for the company, there's a high overhead to buying a physical item in e.g. China and bringing it to the U.S., it's difficult for individuals to deal with large bulk amounts of physical items, and actually selling the items also involves physically transporting it to the buyer. All of this means it's rather difficult to do something like buy 1000 physical copies of a game in China for cheap and resell them to buyers in the U.S., or even to just buy 1000 physical copies of a game using stolen credit cards and then resell them.
Digital keys on the other hand are ephemeral, they don't exist until you buy the product and they stop existing the moment you redeem it. The key is just to facilitate the process of going from purchase to having the game in your library. In some cases the keys are indeed separate entities you're allowed to resell (I'm thinking like you kickstart a game at a tier that gets you multiple digital copies, so they just send you several keys you can do whatever you want with), but that's not really the standard model. And yes, if you buy a game from a store and they give you a key, normally you are allowed to resell it, but there's usually limitations, such as games bought in China are supposed to be redeemed in China. And there are plenty of key sources, such as bundles, where you're not allowed to resell it at all, there's just no technical means of enforcing this (largely because services like Steam have no incentive to provide a technical means of limiting this; Steam doesn't care where you got the key, just that you put it in your library and thus increase usage of Steam).
"I am a developer and I have no problems with pirates because nobody is losing money or time. I have a problem with key resellers because they cost me time while they earn money for something I made with my time."
How is that possible if you received the money from the first sale, is better to see your games in "The piratebay"?
I understand if the purchase were illegal but the article/g2a says is very low amounts and punishable.
Maybe I don't fully understand the problem or how the key's are generated.
Quite a few keys are bought with stolen CCs. So when this is discovered the developer is on the hook for the charge back and penalties. This can be costly to smaller developers. So they lose less money if you just steal their game.
As in G2A is not accountable for fees and penalties if a user fraudulently sells a key.
Why is the developer on the hook for the penalties? Shouldn't that be Steam's job?
I suppose it could be an issue if the keys were being bought directly from the developer's own website, but G2A is offering to reimburse the developer for 10x the cost of the chargeback in such cases, and the developer in the original article is claiming the real problem is with fraudulent keys being bought on Steam, not on the developers' own websites.
Why wouldn't the developer be on the hook? If Steam doesn't want to be, they're in a powerful position where they can say, "You are liable for chargebacks. If you don't like it, don't sell here."
Steam doesn’t pass chargeback on to developers. The developers are getting hit with chargebacks when they generate Steam keys to sell on their own store, which are then targeted for fraud.
The developer wouldn't be on the hook because Steam is the one handling payment processing. If they don't handle CC fraud and just pass the buck to the developer who happens to be the one whose game was purchased fraudulently, that sounds like a pretty serious problem with Steam IMO.
You either buy it directly to your account, or gift it directly to a friend. Either way, it's locked to an account at the point of purchase.
Steam does allow developers to generate steam keys, which the developers can sell elsewhere (or give away). But then steam isn't handling the payment processing, and whoever is, often developers, is responsible for handling chargebacks.
Chargebacks. So the idea is that the unethical agent buys the keys (either themselves or with a stolen card), sells them to a key reseller, and then initiates a chargeback to get their money back (either for themselves, or the person who had their card stolen does it to understandably get back the money stolen from them from the illegal purchase).
Suddenly, keys were "generated" for money that no longer exists. The key hopefully gets deactivated at this point, but then someone buys one of those keys and it doesn't work. Support calls and angry customers ensue.
"Easy" solution: 3D Secure.
It will affect conversion rate but that's still better than high chargeback rate which can cause you to lose the ability to process altogether.
May I suggest Jim Sterling's video on the problem? If you can get past his snarky way of addressing the problem, that is: https://youtu.be/twor6RYVtdQ
In short, G2A pretends that the problem isn't big enough, but indie developers disagree. It's taking them far too much time and money to deal with the abuses from their side, and G2A caters to AAA titles (that can afford to deal with these issues) in order to downgrade the size of the problem.
Edit: Hi G2A employees! This comment went from +5 to 0 in like five minutes.
> but the article/g2a says is very low amounts and punishable.
To be clear, the only thing in the article about this is the direct quote from G2A's representative about this. The article didn't present any independent information to confirm this.
Which means we only have G2A's word that the volume is very low and punishable.
I personally don't fully trust G2A in this scenario, though I'm probably biased.
Agreed. This is a case of an untrustworthy "authority." It is in G2A's extreme best interest to pretend there's not a problem, I wouldn't trust any numbers that they put out as if they are authoritative.
I should also note that I would trust numbers that indie developers are putting out. If things were working the way G2A claims, indie developers would be getting paid in the initial transaction and they wouldn't have a problem with key resellers to begin with. No incentive for them to lie in this situation.
(not that anyone is implying that they shouldn't trust indie devs: but in case anyone is wondering where a more credible source for information is, I feel like that's a good place to look given the lack of incentive for them to be lying about this)
A lot of these keys are obtained through scams where the scammer pretends to be some famous YouTube or Twitch personality promising to review your game. When you're an indie struggling to make a living, sometimes you go for things that sound too good to be true. Also, giving a smaller YouTuber one or two keys isn't much skin off a gamedev's nose, if legitimate.
There are also stolen or leaked keys, but those are likely to be the minority of cases (though they may be greater in volume due to the sheer amount of keys they might have).
It isn't even so extreme. As soon as you start to sell something you get people trying to get free keys from you for all sorts of reasons. They say they are students, from a poor country, going to review it, trade you for other keys, and on and on. Then people will also buy it and complain immediately about anything to get the money back. Basically people start trying to scam you from day 1.
If you sell a product with huge fixed cost and tiny marginal cost you need to have price discrimination.
If you sell for the same price in China, Latin America, Africa and Europe imagine how much money you are leaving on the table.
Even if you believe optimizing your revenue to that extent is unvirtuous, you should still support price discrimination because it lets millions of people in poor countries enjoy your product. There is no way they could afford US/Europe prices.
You don't need price discrimination. You can make money without it. You want price discrimination to make even more money.
Edit: a lot of people seem to be confused about what I'm saying and are telling me how price discrimination is good. I'm not saying it's good or bad. I'm saying it's not a need. Existence proof: many companies that don't do it.
You say this like game developers are rolling in cash. In reality most indie game developers are making just enough to keep making games. Any optimization in the ability to make money can make the difference between the marginal game developer dropping out of the market or not. If you want a rich variety of indie games then you should be okay with allowing whatever non-coercive pricing strategies developers are using that works, and if you don't want indie games then don't buy any.
Most game developers are barely viable businesses as it is (frankly a lot of them ought to find a different industry if their aim is to make money). Without price discrimination we'd see more developer bankruptcies and ultimately fewer games being made. (Up to you whether you think that would be a good or bad thing).
I'm curious, what are some good examples of companies/industries that are successful in not price discriminating across national/world-region borders?
Most of markets segments I can think of (pharmaceutical, automotive, SAAS) do it in one way (direct price discrimination) or another (separate products for a region).
Apple comes to mind. Their products are usually even more expensive in poorer countries.
Just about any commodity would qualify. Oil companies aren’t giving discounts to poorer countries or selling them a cheaper inferior product.
Lots of indie software makers can’t be bothered to put in the effort to target individual countries, and just sell at one price worldwide. I believe both Apple’s and Google’s app stores work this way, with no ability to set a different price in different countries.
You can't compare physical goods to software in relation to price parity. The cost to sell an iPhone in South America is higher for Apple then it is to sell one in the US so it makes sense that they cost more. For a game it costs the same, and costs virtually nothing for each sale.
Google play supports setting different prices by country.
Not necessarily. Sometimes you use profits from the high priced copy in a country with high purchasing power to cover up the losses from the lower priced copy in the country with lower purchasing power. In the case of games it makes sense especially if you rely on a large community of players for its success. You need more people to play it but you can't sell it at a loss everywhere in the world just to access all markets and gain the numbers.
When talking about selling it at a loss in one region and making up for that by making a profit in a different region, the relevant figure is the marginal cost, which is approximately zero.
When talking about selling it at a loss in one region and making up for that by making a profit in a different region, the relevant figure is the marginal cost, which is approximately zero.
It's easy to "win" an argument if you just label all information that would make you wrong as "irrelevant", isn't it?
“Selling at a loss” is about the marginal cost versus the price. I’m not “labeling” anything. That’s just what it means.
It’s perfectly valid to talk about overall profitability when accounting for non-marginal costs, but that’s not the phrase you use to talk about it, and saying that some units are sold at a loss while others are not is nonsensical in that context.
Presumably the development costs and overhead costs are factored in along with a projected number of sold units to come up with a baseline 'cost' of each copy being sold. Selling a copy for less than this 'cost' would be selling it at a loss. Selling a copy for more than this 'cost' would be selling for a profit. Being obtuse and insisting that you can't sell software at a loss because of the marginal costs is not furthering the conversation at all, it's just being pedantic.
> Presumably the development costs and overhead costs are factored in along with a projected number of sold units to come up with a baseline 'cost' of each copy being sold.
Yes, and that is the error. The number of copies is not static, and might as well be considered infinite. With digital goods there is effectively no limit on the number of copies which can be produced at near-zero marginal cost, so cost per copy is a meaningless metric. Unlike physical goods where you need to recoup your variable costs for materials, labor, and capital on each item sold before you can even think about offsetting the fixed cost of R&D, every sale of a digital good contributes to the bottom line regardless of the price.
The single most expensive game to develop to date was apparently Star Wars: The Old Republic at $200 million[1]. If each of the 7.7 billion people on the planet had a copy, however, the development cost per copy would only be about $0.026, affordable even for the most limited budgets. Say that 5% of the population would be interested in trying it out at a price of just $0.25 per copy: that's $481M in revenues, or $281M profit. Or they could choose to make it a monthly subscription service at prices attractive to just 1-2 million players and lose money overall while charging subscribers $100 apiece. Same development cost, different distribution models. There is no predetermined cost per copy below which they are selling at a loss and above which they are selling for a profit.
The specific example was selling at a loss in poor countries because you need more people using your software to bolster the network effect. This makes no sense: each copy sold in a poor country at a low price is still making you money, it just isn't making as much money as the copies you sell at a higher price.
This isn't pedantry, this is discussing the actual topic of the conversation.
But it is pedantry because the person you were having a conversation with was using imprecise terminology and you were disagreeing with the words as written instead of the words as intended. Fine, they used the wrong words. Their meaning was clear. I think having the conversation is good as long as we can extend a little leeway to people that don't always have the correct terminology for a particular discussion.
You still have to cover expenses (development + running costs - like maintaining your multiplayer network). The way you set the price combined with the projected sales should lead to profit. But you may very well decide to have markets with higher purchasing power to subsidize the ones with lower purchasing power so that you can cover those costs and make a profit. You could very well just have losses.
If the answer to your question was "no way" then software would be the one guaranteed way to swim in money.
You certainly can have losses overall, but there’s no way you can have losses in just certain regions, unless your per-unit price there is only a few cents.
I'm pretty sure I costed Microsoft money when I was younger and poorer, because I knew how to download most security updates for my pirated Windows without getting caught, so I costed then bandwidth and payed nothing.
Maybe they let that happen or did not work as hard as they could have to prevent it because they figured they'd recover their investment when I grew up and became a paying customer.
Tech support is optional. Bandwidth is a possibility, but you'd have to work really hard to lose money that way, given how cheap it is. Sell your game for 10 cents a copy and you'll still make money.
Developer salaries and rent are the same no matter how many copies you sell. Each ten-cent copy sold brings you closer to covering those costs. If you don’t make enough to cover costs, you’re not selling at a loss, you’re just not selling enough.
The marginal cost on infrastructure is like the marginal cost on bandwidth: really small.
> you’re not selling at a loss, you’re just not selling enough
Ah, you could have just said it's a matter of wording. Yes, what I meant is you could sell, and make a loss. So in order to drive up sales hoping that it will actually start a positive feedback loop where the growing community attracts more buyers, you could sell your software at different prices. You probably noticed even some cloud services sell for different prices depending on country (MS gives you some cloud things 20% more expensive in Germany as opposed to US).
And saying the infrastructure is just bandwidth is like saying you just a keyboard to code. Random example, I assume many big name games face similar challenges. [0] I think we can agree maintaining a setup that allows players all over the world to play in good conditions while preventing cheating, and many, many other services costs and involve quite a bit more than just the net link.
Your previous comment referred to losses in a single country. It makes no sense to talk about total profit/loss including overhead in that context. How do you allocate your shared overhead between the two countries such that you can say you made a loss in one country but a profit in another? If you're "selling at a loss" in a single country then the only reasonable interpretation of that is to account for the additional costs involved in serving that country, but not any shared overhead.
Yes, there are lots of other costs for running a network service besides bandwidth. But those are heavily if not completely independent of the number of users. Your anti-cheating effort costs about the same regardless of whether you have a million users or ten million users.
If you expect your game in India will sell 50.000 copies at $60 but 250.000 copies at $10 you are losing out on some of the money ($500K in this example). On the other hand you can sell the same game in the US for $60 or $65 knowing that the predicted sales will cover up for the money that you didn't make in India. Bonus, you now have 200.000 more active players in the world than if you tried selling everywhere at a middle price point ($50-$55...).
So you can sell the game at a loss meaning once your sales have dried up you haven been able to make a profit or even cover your costs. And you can "sell at a loss in one country" meaning you're willing to let that one country not cover its share of the predicted income (meaning if you sold everywhere like that you'd go bankrupt fast) just because you can get more market share. And some other region will compensate.
I'm sorry you would rather nitpick on the wording instead of the point being made, which I'm sure I explained pretty clearly. And this already exists in practice so obviously the logic behind it is sound.
> But those are heavily if not completely independent of the number of users.
So what if the number of users/sessions hosted increased by 3 orders of magnitude, right? The databases, the game servers, the login servers, the web servers, security, management, and everything else that also has to be geo-located will just balloon to accommodate the extra users or markets at no cost as all IT infrastructure tends to do.
Again, here are some random numbers from almost a decade ago for a game that's probably far less demanding than anything today [0]. Having x US servers vs. having 3x US servers and 5x Asia servers is not quite "independent" of user numbers and location.
It's all about risk versus reward. Making an indie game for the saturated indie market is a risky endeavor. The potential for high reward has to be there for developers to spend the time and money to make a game with a low probability of success. So some games absolutely need the ability to maximize profitability, including price discrimination (market segmentation).
You also want price discrimination to let poor people use your product.
Some people care about that sort of thing even if it costs them money. For example a bakery might choose to give away their leftover bread at the end of each day, so poor people can eat. This costs them money because some people might choose to get bread for free when they could have bought it at full price.
Nothing says you can't charge the poor people price for everyone. You want price discrimination to get wealthier people to pay more.
To take your bakery example, they'd ideally like to charge more for their bread when the customer is rich, but that's not practical, so they're stuck charging the same price regardless. Many businesses work around this, imperfectly, by using coupons or sales.
But importantly, the bakery can't charge the poor people price for everyone or they'd bankrupt.
I think many indy artists are like that, that's why they say they'd rather you pirate their games. They could have used more strict DRM instead, if they only cared about money.
> But importantly, the bakery can't charge the poor people price for everyone or they'd bankrupt.
In this situation the bakery is basically running a charity funded by the extra money they're getting through price discrimination. That's separate from their role as a business.
The minimum sustainable price in the absence of price discrimination would not be the "poor people price" or the price paid by the rich, but rather the cost of material, labor, and capital which lies somewhere in between. Price discrimination and the absence of arbitrage allow the bakery to charge rich customers more, but it's entirely their choice to use that extra income to provide goods at a loss to those of lesser means. They could instead just keep the extra revenue for themselves.
Explain this to me: how is it ethical to price discriminate against Western consumers when it comes to video games, but unethical when it comes to prescription drug costs?
It's a bogus argument - any American struggling to afford the high cost of medication in America will tell you that geography is a very poor predictor of affordability. And anybody who has a sizable Steam library can tell you how the summer and winter sales get very expensive, very quickly.
Healthcare should be relatively cheap. Entertainment should be relatively expensive. Prices should be globally stable.
> how is it ethical to price discriminate against Western consumers when it comes to video games, but unethical when it comes to prescription drug costs?
Because you will not die without the hot new video game.
And honestly, although I think charging individuals different drug prices is ethically suspect, I'm ok with charging national health systems (modestly) different prices for drugs. It seems fair to me that relatively rich countries pay more of the R&D costs, because that way we get more drug development in total, which benefits everybody.
That logic applies even more so to entertainment. Whether you set a single global price high or low, you reduce the amount of money available for development costs, meaning fewer and worse games. (And if you set it high, you pointlessly prevent a lot of poorer people from having fun.)
>Because you will not die without the hot new video game.
Could you expand on this? If we are looking at pricing discrimination that still allows them to buy it, then they aren't going to die either way. If it is immoral to use their life to make money, then selling it at any more than cost is immoral, and potentially even selling it at cost is immoral since that cost includes some amount of niceties that aren't required to produce the drug. (does the person making the drug really need to earn that much, couldn't they do with a bit less pay?)
Also, given that even if you fully minimize costs and sell the drug exactly at cost, there are still some who can't afford it, so if you want to maximize the number of people who can afford the drug then pricing discrimination is still preferable. If upping the price in one region lets you lower the price in another (remember, we are already selling it exactly at costs), and the people in the first region has more income to spend on drugs, is that not the far more ethical than demanding it be equal costs to everyone even when people in poorer areas end up being denied the drug due to pricing? In effect, the pricing discrimination is a tax on the richer individuals buying the drugs to allow poorer individuals to buy the drug (within the hypothetical where you are selling it at cost).
I guess even deeper then is the question if the person making the drugs should even be profiting off the work. They need to eat and have a place to sleep, but if they require more than the bare minimum salary possible aren't they now increasing the cost to product the drug, resulting people having to pay more to live, just so they can have more money?
Of course, there is the issue that if they can't make enough money to attract them, then they'll pick a different line of work. Is it wrong or immoral for them to do that? To demand a certain level of compensation or they work elsewhere, even though they could survive off of less money while making the drugs at lower cost? If the end worker can demand a premium despite the impact on the lives of those who depend upon the drug, why can't others involved in the production of the drug?
Overall, it makes a nice sound bite, but I don't understand the actual reasoning implied.
Assuming we're talking about drugs that are necessary for survival (or at least having a normal life) and are either government-granted monopolies or have very limited sources, then drug-sellers selling to individuals can engage in price gouging, which is clearly immoral to me (and most everybody else). If you aren't sure why, there's a big literature on price gouging that should help.
However, one can't price gouge on games. There are infinite games to play, many of them free and a great many more are inexpensive. If people don't get a particular game, they will not die or live a terrible life. So game sellers can price as they please and set reasonable terms without any big ethical issues.
Video games are purely luxury items though. You need access to medication, you don't need access to the latest and greatest games.
Luxury items are already sold using value-based pricing rather than cost-based pricing. If I make $100 and have to pay $10 for a game, that's the same relative value as if I made $1000 and paid $100.
Of course, that doesn't mean you don't feel ripped off if you're paying the higher price. I certainly do when I get charged €60 for a game that in the US costs $60 (which should be €53.54 at current exchange rate).
Economics 101 would tell you that price elasticity is the obvious difference between the two, and that makes a huge difference.
If a game is too expensive, you move to another game or other cheap entertainment. If a drug is expensive, you pray that there's a cheap generic, which in some cases there isn't.
The idea that prices should be globally stable works in the imaginary world where currency conversions hold real income constant, but that's just not true.
>Healthcare should be relatively cheap. Entertainment should be relatively expensive.
That's not going to work, people are more willing to spend for a higher standard of healthcare than they are a higher standard of entertainment. In fact the dollar value of one additional year of life is virtually unlimited, if not to the state, to the person whose life it is.
Sure. But there's a line somewhere between differentiated pricing and things like prohibiting users to give/sell keys cross regions or lobbying for shutting down exchange platforms where this happens.
To draw on the bakery allegory in another comment, I think we can agree it would b nonsensical for the bakery giving away free leftover bread to homeless people to put controls in place that prohibits them from sharing their bread with others.
If its leftover then its lower quality. That's fine.
But in this case its the exact same product. If I'm a bakery owner and I give fresh out of the oven bread for cheaper/free to homeless folks, and I watch them turn around and sell it to my own customers, well, that freagin sucks.
Regardless of how I feel about it, the options are:
- Keep giving bread and lose an indeterminate amount of business from my target audience
- Limit the rights of the people who I gave the bread to
- Stop giving bread at all.
If #2 is not possible, then it's either "I take a business hit for trying to provide a service to the less fortunate" or "Fuck the less fortunate".
So now with that said, how I feel about it? Yeah, I think being able to limit the rights of the people I give the bread to is the best of all options. A real world example of this is low income housing, where the recipient isn't allowed to sublet their place, because that would be all sorts of fucked up. Obviously a game key is not anywhere near as big of a deal, but it is a similar principle if we want businesses to be able to open up to as many markets as possible (not just for their own sakes)
Are you limiting rights through the transaction as a sort of contract or doing so through government enforcement of all people? If the former case, then option 2 does appear to be the best option. If the latter, then option 2 appears to be worse than option 1.
Its a bit grayer than that. In this case generally it is option 1 (transaction contract when the key is originally given or sold). But then a third party comes in and makes a marketplace out of people breaking their contract and how you deal with THAT.
Many companies just use time. Plane tickets are cheaper if you buy them earlier, and these days video games eventually go on sale.
Pricing the different regions differently also "leaves money on the table", as there are wealthy people everywhere. Ideally you'd extract the maximum people are willing to pay, regardless of location.
Among people who pay attention to G2A, it seems to be pretty widely accepted that many sellers are using it to launder money rather than selling legitimately obtained keys. I wonder if any law enforcement agency has investigated this yet. G2A's people say that they will give proven fraudulent accounts' personal data to the authorities, but they also seem to stop short of saying that this has ever actually happened. It would be interesting to know what the practical disposition is there (e.g. if law enforcement leaves G2A alone because they catch a lot of sloppy carders).
The developer's gripes are with Steam as a slow-moving juggernaut that they have to rely on. One particularly cruel detail - these are the studio's working with a more traditional "buy it and you own it" model instead of F2P, DLC, Loot Box-y money-driven insanity. Games that are adopting modern industry trends are more self-reliant and profitable.
I don't know what the next decade of PC Gaming is going to look like, but I feel like things are going to change dramatically. Steam is losing its power as the market leader, but we also can't have 10+ applications serving as walled-garden marketplaces. Cloud Gaming like Stadia may be the best solution, but it's also the always-connected, DRM-dystopia consumers have been dreading since the 90s...
Why aren't the keys revoked when there is a CC chargeback? People buy from G2A and the like because the keys work, make them stop working and the problem is solved.
> In other cases, Mr Rose said, dealers cancelled the credit card transaction with which they had bought a key, after selling it on.
> By the time Steam chased this up and voided the sale, gamers may have tried the title out and moved on, never noticing they had lost access as a consequence, he said.
So maybe the chargeback process just needs to be faster. Or the games need to be longer maybe. I'd be curious to know how long the current process takes.
> By the time Steam chased this up and voided the sale, gamers may have tried the title out and moved on, never noticing they had lost access as a consequence, he said.
That is not true. For years now (or maybe even forever?) you get a big fat notification popup [0] when a license gets revoked in Steam, which you also have to acknowledge by checking a box and pressing a button.
> By the time Steam chased this up and voided the sale
Also, I'm pretty sure the revocation of a license is more or less instantaneous. So that also seems untrue. It's not even Steam's job to chase this up, but the developers.
1. Developer detects fraudulent transaction
2. Developer matches game key to that transaction.
Sorry, I just realized that I linked the wrong picture in the original comment, the one linked is for a purchase on Steam, the following is the right one for a key activation:
https://i.imgur.com/faOpBWE.png
(Slightly different wording with reference to third party sellers, yellow instead of red border.)
> It's not even Steam's job to chase this up, but the developers.
That's only for keys purchased on the developer's own website though, right? Surely if the key was bought directly from Steam, then Steam would handle voiding the key?
Worth noting that G2A claims to compensate developers "10 times the sum lost" if the key was bought on the dev's own website, and the dev in the article is claiming that isn't really the issue.
> Surely if the key was bought directly from Steam
You can't buy keys directly from Steam. There is steam gifting to gift games directly to accounts, but that got heavily restricted over the years. (You can't "hoard" gifts anymore in your account without activating them - on neither end, you can't gift when the price difference is too big between regions, if you decline a gift it automatically gets refunded for the giver, and so on...)
G2A claim that if you can prove that you lost the money due to a chargeback, but I imagine its a pretty difficult thing to prove. Seems similar to having a bug bounty with a lot of restrictions on what's allowed and then claiming you're software is bug-free because nobody ever claimed the bounty.
Interesting, I buy keys from G2A regularly and haven't lost access to any titles yet. If this was a significant problem I'd expect to at least have a few lost titles out of dozens I've bought personally and for friends.
Per the article, G2A claims only ~1% of transactions on their site have problems like that. So assuming they're not lying, it's no surprise that you haven't lost any titles yet.
Also, they have no way to check the status of the keys. So, if a user doesn't report an issue, they'll never know about it. Given that the article says that most users don't notice keys being revoked, it wouldn't be surprising at all if the majority of issues never get reported.
I think the devs claiming that users simply never notice that the license was revoked are the ones who are lying.
Every time that's happened to me (for example, a time-limited version of a game or a beta), Steam presents a notification that the game has been removed from my library.
Point being that if they player has already moved on to other games they may not care, i.e., G2A never find out, and they're numbers are wrong (assuming they're being honest in the first place, which is a big assumption.)
They've always been this way. My opinion on them is not new.
A bunch of esports teams dropped them as sponsors years ago after realizing they not an honest business. Their buyer protection service (G2A shield) is a scam. There's also this fun AMA they did
https://www.reddit.com/r/IAmA/comments/5rg9mo/we_work_for_g2...
Chargebacks can take anywhere from a few weeks to over 6 months, it really depends on the case and how far back the chargeback is along with a bunch of other things.
So yeah if I bought some small indie game form G2A and it gets revoked 3 months later, chances are I'd never notice.
It's addressed in the article. By the time the game access is revoked, most players have already switched to another game and don't even notice the old one not working.
Either they take too long to revoke the key, or the gamers didn't play the game for that long, meaning they most likely wouldn't have bought it at its full price anyway.
> the gamers didn't play the game for that long, meaning they most likely wouldn't have bought it at its full price anyway.
Not necessarily. Many gamers have huge libraries of games that they have never played, or played for a little and then never played again. You could argue that it's silly for those gamers to buy those games, but it happens a lot.
When I had to do a credit card chargeback, it took a week after I noticed the charge. I was told it could take up to 60 days or something like that. Plus people could take months before even realising there are fraudulent charges on their cards. Therefore, even if the key is revoked instantly, it could still be months after purchase.
I see G2A mentioned, but kind of wish they'd list okay but similar services or if they're shady as well. Are Green Man Gaming, Humble and things of that nature okay or are they hurting developers in some manner? I'm pretty sure GMG and Humble are selling keys akin to Walmart selling physical copies (just as a storefront working with vendors/publishers), but there's really no way of telling as a customer for sure.
Humble gets their keys from the developers. GMG, so far as I know, does, too.
G2A doesn't get them from the devs. They're a lot cheaper because the dev isn't setting the price. Whoever is obtaining the keys (illegally or otherwise) is setting the price there.
I look at it this way: If the price is too good to be true and you don't already know the site, it's probably not legit.
>I see G2A mentioned, but kind of wish they'd list okay but similar services or if they're shady as well.
No matter how non-shady any secondary market attempts to operate, the systems that would have to exist for them to actually reduce these problems would require business cooperation with the very companies that seek to kill the First Sale Doctrine through technical means.
I purchased a few games from G2A in the past, but they were always additional copies of games I already owned. The morality of the situation doesn't come into play (for me) if I'm just trying to buy a copy of a game I want to play with my son.
That said, they do seem to be a bad actor in this space. I think the dev in the article is overstating things a bit, but G2A is being disingenuous with their rebuttal. There clearly are a portion of keys acquired fraudulently but they know devs will not be able to prove that G2A is complicit. We also don't know to what extent this is happening.
I'm just going to avoid G2A in the future. If anything, I'm going to give the devs the benefit of the doubt on this one.
banning G2A, kinguin etc. won't stop those resellers. In Poland, there's a polish version of ebay (allegro.pl). Typing in any game and sorting by the price shows games being sold as shared accounts (xbox/ps4), or with ridiculous prices similar to those found on G2A and alike. And even if G2A were stopped from selling those keys, a new site would appear overnight.
The industry needs rather a proper fix. How this would look like, I have no idea.
> The industry needs rather a proper fix. How this would look like, I have no idea.
How about they stop being so obsessive and controlling and just accept that
A) People have a right to re-sell games
B) We live in a global world; you can't sell stuff 4 times cheaper in another country and expect to be able to prohibit export
C) When you give keys to an influencer (fake or not), the keys will be given away for free anyway; whether its on G2A or through some twitch giveaway does not impact your sales in any meaningful way. Unless you were expecting that the giveaway would reach mostly people who otherwise wouldn't have bought the game, in which case, you should have done some research on said "influencer" anyway.
D) Many people buy games only because they can get them for cheap. Of course this doesn't apply to 100% of transactions on sites like G2A, but a significant percentage of them.
E) If your game is good, people may pirate it and later buy it if they think you deserve the money. Harsh DRM drives would-be pirates into the hands of key-resellers; and once you "own" a game, through whatever means, you're less likely to buy it "again" from the actual developer.
All in all, I'd say that the big game developers are steering people into the wrong direction (DRM, inflated prices, etc.); away from pirating and possibly eventually buying the game, towards key-resellers; and it's the indie developers who suffer the financial consequences of it.
Developers are in fact accepting E, they say as much in the article.
D is basically the model of set-your-own-price stores like Humble Bundle, and more generally the model of sales (in any industry): you temporarily sell a product at a discount to catch the people not willing to buy at full price.
For B, is your preferred solution that games are sold at US prices worldwide? Who does this benefit?
> For B, is your preferred solution that games are sold at US prices worldwide? Who does this benefit?
For one, me in Europe xD
Joking aside though, stuff made in expensive countries is usually too expensive in cheaper countries.
The only difference is that, once you make a game for an expensive country, there's no added cost to selling it (for a lower price) in cheaper countries as well; so devs try just that.
I don't have a preferred solution to this; I just think that trying to impose their own restrictions on international trade is certainly the wrong solution. (Yes, governments do this, that's not my point)
Key Resellers frequently include fraud where people buy a lot of keys, resell them and then run a chargeback on their end.
The devs gets nothing and pays fees on top, the trader just goes poof and the end user is pissed because their game was removed from their steam library.
Those shared accounts might be accounts hacked with known/breached passwords.
I previously had my mostly empty UPlay account hijacked by someone with a Kazakhstan IP. As I recall they renamed the account and added new friends and had been playing a game I'd received free, but didn't change the password. Mostly just spurred me to switch everything feasible to 2FA.
1. Everyone is responsible for their own password. Some sites may have password requirements, which I think is dumb, but ultimately it's still the users responsibility to secure their account against password guessing attacks.
2. (unrelated to article) My gaijin.net (warthunder) account has been hacked ages ago, and since I didn't spend a single euro on it, I never really cared. I just observe where people log in from (I get an email for every weird login), and it's quite interesting.
3. most likely changing the password would have required email access
There has been some really delicious controversy against G2A of late. My favorite was the “unbiased report that [they] wrote to show how stolen keys don’t actually happen, want to put it up on your site without attribution?”
Team Fortress 2 keys used to have a resale value a long way below what Valve actually sold them for. There was speculation that this was because a significant proportion of all keys being bought were actually being paid for with stolen credit cards then flipped on quickly. Whether or not this was actually true I don't know: unfortunately, hardly anyone in journalism (gaming or otherwise) seemed to be interested in investigating this anomaly at all.
So game developers want to keep their users from re-selling what they have bought. If you ask me, the bad guys are the devs who want to make this impossible, not the platform that allows it.
But hey, if this is really such a big problem, just track where your keys are being used; if thousands of chinese keys are activated every day in, say, europe, you might have a point.
But empty accusations without proof won't convince me that they are in the right about wanting to shut down such a platform.
Did you read the article? There's a non-zero cost for devs dealing with all the chargebacks and finding out if a user bought a legit key. That's not a low touch interaction.
Plenty of proof and devs talking about it in the article and on Twitter. Rami Ismail is well known and has been pretty clear about how much overhead these types of a abusive companies cost them.
It's hard enough to be an indie without having to deal with this.
It's not that hard at all, actually. The reason why stores like Steam charge a 30% fee for their services is so they deal with issues like this for you. I released my game only on Steam and had to deal with zero chargebacks because Valve handles it for me. What these indie developers complaining do is release their games on their own store, attach a Steam key to it (which you can generate for free), and then sell their game + Steam key externally. This means they get to circumvent Valve's 30% fee at the cost of having to deal with things like chargebacks.
>It's not that hard at all, actually. The reason why stores like Steam charge a 30% fee for their services is so they deal with issues like this for you.
A problem that costs 30% of revenue is something that I would consider a hard problem to deal with.
Which is why I'm having trouble finding sympathy for the devs. They're complaining that they can't have the best of both worlds:
They want to sell their game through their own storefront to avoid the platform fees, but they don't want to deal with chargebacks or fraud.
They want to give away hundreds or thousands of free keys, but don't want the keys to be resold and don't want to exercise due diligence when giving the keys away.
They want to recoup their losses when fraud does occur, but don't want to expend the effort of sending G2A evidence of the chargeback to get the 10x refund.
This is called being a business--each dev needs to decide whether avoiding Steam's cut is worth the headache of being your own seller. Trying to fight the entire concept of reselling itself is a much more time-consuming and futile effort than just choosing one option or another.
Except that since indies are pretty visible you can't just hide behind Steam, your fans know how to reach out to you and will hound you when they feel like they've been wronged.
The fact that indies are saying they'd prefer the game to be pirated than bought through G2A should tell you all you need.
Devs are the ones selling the keys that Steam issues to them when they ask. So they are the actual seller who needs to deal with the problem, not Steam. G2A doesn't care because they're not the ones hit with the fraud report.
You mean like if the keys were being bought off the developer's own website? G2A claims they're offering a 10x refund to the developer in such cases:
> The site said it would also start offering developers refunds worth 10 times the sum lost if they could prove keys had been sold on G2A after being bought with stolen credit card details.
The developer interviewed in the original article claims that doesn't matter because the stolen keys are being bought on Steam, not on the developer's own sites:
> Mr Rose responded saying most developers relied on sales via Steam and other third-party stores rather than their own sites, so G2A's refund offer was a "red herring".
But again, shouldn't Steam be the one dealing with the problem in that case? Why do the developers care?
What do the developers lose if their keys are purchased with stolen credit cards? If it’s about chargebacks, can’t they just disable the keys involved?
One thing I don't understand is why the CC does charge a fee to the defrauded party. I mean, I'm not doubting this is what happens, but I don't understand why.
The merchant is in the best position to prevent fraud, so it makes sense that they bear the cost of fraud. You can't charge person who committed the fraud, because you don't know who they are (unless the merchant has video footage or something). Charging the cardholder is illegal. If the merchant bank bears the cost then they would just be redistributing the costs back to some other party and we would be back to square one.
That makes sense. But in the case of online transactions (where you can't ask for id), how can the seller prevent the fraud? It's there any due diligence expected? Or how can they send themselves? Is this just an example of "the cost of doing business"?
Steam keys for a game can be generated at no cost to the developer. If you sell your game outside of Steam on another store or your own store, you can then attach a Steam key to that sale so that players can activate the game on Steam (because everyone likes having their games on Steam). Valve has no control over chargebacks for sales that happened outside their store since it's not their store. Once a chargeback is received the developer can then go and deactivate the key attached to it, which will disable the game on the user's Steam library.
> So game developers want to keep their users from re-selling what they have bought.
No. The article clearly points out the following scenarios:
1. A game is priced differently in different markets / geographies, and they only want to prevent reselling from a cheaper market to a more expensive one. (The obvious solution is to price everything at the highest price point, but if you think that's good for either sellers or buyers you're very confused.)
2. A game is purchased, re-sold, and refunded via a credit card chargeback. The issue is not with reselling but with voiding the original sale.
> if this is really such a big problem, just track where your keys are being used
I suspect developers don't have access to this, as these are e.g. Steam keys. (And again, "Avoid Steam and implement your own copy-protection" isn't good for anyone.)
> "Avoid Steam and implement your own copy-protection"
Thanks for the strawman. I actually think what they should do is:
"Avoid steam and not use copy-protection"
If their game is good, it will sell; if it doesn't, it's just not good enough. But at least people who pirate a game may still buy it at some point; once they buy the game, even from an illegitimate source, how likely is it that they will buy it again for the full price?
Mind sharing the reason that you think this is binary? It seems to me that there is a price/value sense and different people have different value so by varying price you can reach an appropriate size of the market. But zero price is always better than higher price, so if that exists why would anyone pay at all?
I’d say the null hypothesis is that pirates won’t rebuy. I don’t think there’s evidence that pirates rebuy on a scale that matters. Not worth optimizing for.
Instead you aim to price the product and ensure availability in a way where the friction is low and the value is high for the price so you can maximize revenue. Fortunately, app stores like Apple’s have created a safe haven for this sort of thing.
The article conflates developers with publishers (many indie-devs still sign with publishing companies). My understanding is that it's primarily the latter who want to prevent actual reselling.
Perhaps a solution for indies is to disable key generation and for Steam to allow people to rent games for 20-40% of the price?
Piracy of rented copies, in the context of the current article, really doesn't matter.
If most people never play again after paying 60% for a fake key maybe renting is a very good option. If they buy the game within two weeks of renting the rent costs serves as a credit towards full purchase of the game.
For steam at least I think the problem would just go away if Valve would allow trusted third parties to activate a key without ever revealing it to the user. Then publishers could sell on any marketplace and the key would never be visible.
Sure, it's "fixing" the problem by making a massive move to control the market but if the games industry in general really wants it it's the only way I reckon.
This is mostly a problem for devs who do bundles. A users pays $20 for 10 games but only wants 3 of them, so they sell the other 7 keys. G2A has done some shady things (including trying to buy favorable press coverage), but I do think it's a bit fishy that Mike at No More Robots is stirring up controversy juuuuuust before he's got a game releasing.
Do you feel better about paying a small amount of money for dubiously-legitimate software than none at all for definitely-illegitimate software via well-established piracy channels?
(Genuine question. It sorta seems to me like one appeal of this market is it doesn't weigh on the conscience like piracy.)
also multiplayer games generally don't work with pirated copies. not to mention how many titles are locked down with absurdly intrusive anti-tamper software at launch these days.
G2A is mainly useful for things like multiplayer games where piracy isn't an option. That's the main reason I use it at least and I pirate everything else.
Why don't the developers issue time limited keys to influencers and game testers?
If an influencer ends up playing the game (and thus promoting it), they can issue new keys periodially.
These time limited keys would be (almost) worthless.
Imagine having to re-issue keys because the beta has been going on for too long, or because you released a new DLC after a year or two. Too much manual labor.
When developers generate Steam keys, it allows them to sell their 'game on Steam' elsewhere (their own website, HumbleBundle etc).
This means Steam doesn't take a cut of the sale price. But the developers still get the benefits of Steam community, Steamworks drm, and potentially having a unified update/distribution channel.
Similarly, some gamers prefer to have games 'on Steam' rather than DRM free so that they have a single unified game library.
If you don't want money for your games, or better yet, don't want a retailer making money from 'your game' then just give it away or sell it via the web only.
Uhm... I think you should give a second read to the article.
They're not saying "don't buy on Steam, GOG or humble bundle". They're saying "don't buy from the scummy websites because chargebacks cost us money, while pirating, at least, costs us nothing. Or buy from Steam, GOG or HB".
Let me explain. Many crooks want money. A lot of illegal activities generate what looks like value but it's hard to turn into money and unless you do it's useless. A stolen television is valuable but why would I pay 60% of retail price to some geezer in a lock-up at 2am for what is obviously a stolen TV? The Fence buys stolen things from crooks for a fraction of their value, then operates a seemingly legitimate business which sells those things to ordinary punters to collect the difference.
Being a Fence is a crime. "Receiving stolen goods" we call it in most places. You're guilty if you know or should reasonably have known that the goods you got were stolen.
The argument against G2A is that logically the stuff they're buying for cheap can only exist if it's being obtained by crooks. A week after a game is released for $25 the _only_ reason somebody wants to sell 100 codes for $5 each is that they used stolen credentials to get those codes and are cashing out.