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Code Reseller G2A Acquiesces To Some Demands, But Developers Remain Wary

by Mike Futter on Jun 28, 2016 at 07:23 AM

Game-key reseller G2A has been embroiled in a public relations battle that focuses on the platform’s problem with the gray market and fraudulently purchased goods. Developers have called for reform, and today the retailer has made the first overtures toward change.

G2A says it will begin offering up to 10-percent royalty to developers for keys sold on its platform. It’s up to developers to set that royalty, which will be applied on top of prices set by third-party sellers.

In order for developers to take advantage of this, they’ll need to partner with the site. Studios will need to register their products for G2A to acknowledge owned intellectual property and games.

G2A says that the royalty should entice developers to come to the table. The retailer hopes that developers will also sell their games on the platform, even though that would put studios into direct competition with both legitimate single-code sales and bulk purchases of codes acquired with stolen credit cards.

The retailer says that it is legally prohibited from setting minimum prices, so we consulted an attorney for guidance. "The First Sale Doctrine says that when you buy something, you can do whatever you want with it," says attorney Ryan Morrison, founding partner of Morrison/Lee. "That's why the used-game bins at Electronics Boutique used to be so popular. You know what you don't see though? Used-game sales from Steam users. That's because you aren't actually buying a game when you get a key. You are getting a license to play that game, and that license is not transferable or sellable. There are some jurisdictions where that may change sooner than later, but as of now the selling of keys is strictly forbidden in most of the world."

“An ongoing royalty on sales is a very attractive proposition,” a G2A representative tells us. “You must remember that these keys have already been sold by the developer, so effectively the developer has already been paid for them. What we offer them is an additional royalty on top of that sale, after the fact, if the key is sold again on G2A. On the subject of stolen keys, any stolen key that’s reported to us will be taken out of the market and not sold, so of course no royalty would be applied.  That’s part of the reason we have put this program in place, to incentivize developers to work with us to root out any stolen key, remove it, investigate and ban the offender from the marketplace.”

Unfortunately, there is nothing to stop sellers from creating a new account and returning with a new batch of stolen goods. G2A hopes to mitigate the concern by offering chargeback protection via its G2APay, however the retailer is still keeping an arm’s length should developers not choose to play ball. 

“In relation to chargebacks on transactions made on the developer’s store, we have offered our payment solution ‘G2APay,’ which when used in conjunction with its Shield feature, will cover all charge backs on goods sold via that site,” G2A says. “We can offer this, as we have a large team of dedicated risk and security professionals that allow us to mitigate the risk. If the developer uses their own security and anti-fraud systems and their security is compromised, we cannot be held responsible. But as stated we stand willing and able to ban that key from the marketplace if so requested by the developer.”

G2A says today that it will ban keys from the marketplace by request, but based on prior statements, it isn’t that simple. The retailer has requested that publisher TinyBuild, which brought this matter to light most recently, hand over batches of keys in order for G2A to match them.

Developers seem to be wary of G2A’s offer. TinyBuild CEO Alex Nichiporchik suggests that this is a positive step, but points out problems with the proposition.

G2A came out with an initiative that finally addresses some of the issues we’ve been talking about.

The only tangible part about their program is royalties to developers and database access which undoubtedly is a good step — we will need to see how it works in practice. It still doesn’t solve the issue of stolen keys, or the shady business practice of forcing down insurance on consumers,. Try buying something on G2A, you won’t get a guaranteed key unless you sign-up for their insurance service. It seems they want it all to be on developers’ hands, and unless the devs become actively involved in policing G2A (and thus working with them), they’ll wash their hands off any responsibility.

We as a community want to see more extensive merchant verification to go alongside this.

Unless they actually solve the main issue — fraud on their platform — this initiative invites developers to become accomplices. G2A claims that fraud is a very small part of their economy. If so, it shouldn’t be that difficult to implement ethical business practices of extensive merchant verification?

Other developers were more pointed in their responses.

We’ll update as we learn more and hear from more developers about their intentions related to G2A’s offer. You can read an extensive interview with the retailer and our in-depth coverage of the grey market sales issue.


Our Take
The core problem here is that G2A is a clearinghouse for illegal activity. There is a challenge for developers as soon as they tie some of their revenue to G2A’s system. This gives the retailer some leverage. When G2A opens up about its anti-money-laundering operation and its other departments focused on security, perhaps we’ll have a better idea of how the company investigates and deals with illegal behavior.