Thursday, September 01, 2011

Buying Game Codes on the Grey Market

My exasperation at regional pricing differences for Deus Ex Human Revolution led me to stumble across a wide range of "grey market" resellers who Sell activation codes for Steam games at substantial discount over US /European prices. Intrigued I spent some time researching these before concluding that it would be better to stay away from them but just in case it could be useful to others I will summarise my opinions on the subject here:

1. There are a wide number of websites selling cheap Steam codes. Some of these sites seem to be very dodgy, some of them seem to be run as legitmate businesses.

2. The business model is to buy games cheaply in bulk in a low cost market (Eastern Europe or perhaps Asia) and then resell the code to customers in higher priced markets (America / Australia / Western Europe) at a profit.

3. In many cases the code is taken from a boxed retail copy and the supplier may offer a scan of the box. I am not sure what extra protection this provides.

4. It works best for games that do not have a region lock because then you can just enter the Sinagporean or Russian code into Steam youself and it works. If a game has a region lock the reseller may propose alternate routes involving Russian VPNs or even sending your Steam login details to the reseller in order to fool Steam into thinking you are in Russia / Singapore.  This sounds foolish to me and is probably illegal.

4. Some of the better known resellers seem to have good customer service with support forums and representatives who respond to customer issues. 

5. Some of the resellers accept third party payment services (for example paypal) which gives some security against your credit card details being sent to a dodgy website.

6. In my opnion (and I am not a lawyer) there is nothing illegal about buying a game code from Singapore or from Russia. Trying to spoof Steam into thinking your are in a different country using VPNs etc may well be illegal.  Regardless of the legality however buying a code from an unauthorised reseller does go against Steam's terms of service and Steam are under no obligation to honour that code. If the code doesn't work then Steam will not help you and you are at the mercy of the reseller. From browsing forums some of the resellers appear to be good at supportng their customers in these cases and some don't

7. Even if the code works initially Steam can revoke it at any time perhaps after you have been playing for a few weeks. Steam have most notably done this for the Orange Box and also for Modern Warfare 2. I don't know how they decide which codes are unauthorised but it is probably a regional thing. They only seem to bother cracking down in the case of a few high profile games. I wouldn't be surprised if they crack down on Deus Ex HR next because the market seems to be flooded with cheap Russian codes for the game.

8. All of the normal hazards about dealing with little known websites in unknown places apply: These include the possiblity of fraud, identity theft or even that you will be in receipt of stolen goods. The better known resellers seem legit but that is just my opinion.

My overall conclusion:
Although I detest regional pricing and normally support the idea of grey markets on balance in this case I think the risks outweigh the benefit:

-Can get a Steam game at a significant discount (perhaps as little as half price)

- Possibillty of dealing with dodgy websites: fraud, identitiy theft, stolen goods.
- Possibility of game not working or being revoked at any time by Steam.

Some further reading on the issue:
Laws of play has a good analysis with a legal slant but they are very anti-grey market. Somehow I find myself unable to share their sympathy for poor Activision who spent $50M developing a game and $200M  advertising it.

More details on Steam revoking MW2 keys and previously Orange Box keys


Stabs said...

I think as well that no matter how much we may get exasperated with the legitimate games companies it's surely better to finance creativity than theft.

mbp said...

But Stabs buying goods on the grey market is not theft, it never has been. The manufacturer does ultimately receive payment for those goods.

The issue with Digitally licensed goods is that what you are buying may not be any use to you. While there is nothing illegal about buying a license to play a game in Singapore, unless you happen to live in Singapore then that license may not be very much use to you.

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