The Dark Side of Digital Distribution
By: Josh Bycer
Tags: Features, Gaming, Money, Product Management, Economy

Obtaining keys

Digital keys themselves have no immediate or direct monetary value per se. Money comes into the equation when the store (or user) decides to sell a key. Pricing can vary significantly depending on a wide range of factors (including the potential demand around the game the key is related to, and the overall availability/supply of keys). This is where G2A and its contemporaries come into the picture — but where and how do these sites actually acquire keys in the first place? There are two popular sources.

The first relates to fraudulent transactions via stolen credit card numbers. Credit card fraud and the precise role it plays here is a large topic unto itself, but suffice it to say, a significant number of keys are initially purchased through this method.

Also, developers may be tricked into giving multiple copies of their game to the same scammer. There are plenty of stories floating around on Twitter and other locations about developers receiving fake emails from people claiming to be well-known content creators. They’ll ask for one key to use themselves, and then multiple additional keys for giveaways in exchange for free exposure.

Grey markets

Regardless how keys are obtained in the first place, they can be sold anywhere once they’ve been distributed initially. This is where sites like G2A come in — G2A was the premier “grey market” site for game keys at one stage. But whether we’re talking G2A or not, the principle is the same: these sites don’t care where the keys come from, and they make no attempt to police users on their service.

This is also where things become blurry for consumers who use sites like G2A. They are making what they think is a legitimate purchase for something that may have been acquired illegally (or at least, unethically). Even if the original transaction was overturned because it was fraudulent, the key itself is still legitimate and still exists. The consumer who purchased the key will generally have no idea where it came from originally (the only exception being if the key is revoked — I’ll touch on that in a moment).

Headaches for developers

You might be looking at this situation and wonder where the damage is actually being done. Fundamentally, it’s the developer who is always hurt the most. Generally speaking, the developer is cut out of the transaction flow (especially in the case where a key is initially purchased fraudulently and the transaction is reversed).

In addition, every key that is acquired illegally and then sold on is another sale the developer misses out on entirely. For all those keys you saw on G2A or equivalent, none of the sale revenue reaches the developer unless said developer has agreed to work with one of these sites in the first place.

Fraudulent keys can also devalue the game in question. There will always be a theoretical maximum number of people a game can be sold to — the people who purchase the game via a key reseller represent lost sales from the developer’s perspective.

One way developers have combatted this problem over time is to revoke keys that were initially purchased illegitimately (but that were perhaps purchased legitimately further down the line). But this too can have negative consequences for the developer, because it can generate negative PR from angry consumers who found out that they don’t actually have access to the game they think they bought — all through no fault of their own. As you can imagine, this issue can then be picked up by YouTubers who might be in a position to amplify any outrage directed towards a particular developer.

Protecting yourself as a developer

The whole key reselling business is a pretty grim story. And developers can often feel like they are in a no-win situation. But there are a few things you can do, as a developer, to protect yourself.

My first tip is to ensure that you don’t sell your game without any kind of fraud protection. Fortunately, in today’s market, it’s quite easy to acquire basic protection by using third-parties like Humble Widget or itch.io.

Also, when you’re being approached by content creators, make sure to check their credentials. Just because someone says they are a big name or they have a huge following doesn’t necessarily mean it’s true. Check their channel/or their streams to see how active they are. And if their email appears to come from a big, well-known name, then make sure you email them directly through their channel to double-check their legitimacy. It doesn’t hurt to ask for any credentials you require to satisfy yourself that you’re dealing with a legitimate content creator.

Legal key sales

My final point may be a controversial one. At the end of the day, I do feel that consumers should have the right to sell keys (new or used) in a legitimate second hand market. But for that to happen, there would need to be changes to the law when it comes to the nature of ownership around digital products. This is definitely a broader question with significant longterm implications.

As a developer, it’s important to consider how you might protect your products. I also hope that consumers will become more aware of dodgy key reselling practices and understand that purchasing keys for ultra-low prices isn’t a good way to support your favorite developer.