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TMCNet:  New Research from Digital River and SuperData: Gray Market Game Key Resellers Put Pressure on Monetization Models in $100 Billion Digital Games Market

[October 09, 2017]

New Research from Digital River and SuperData: Gray Market Game Key Resellers Put Pressure on Monetization Models in $100 Billion Digital Games Market

Digital River, Inc., a leading global provider of Commerce-as-a-Service solutions, announced the results of a commissioned SuperData study exploring the impact that gray market game key resellers have on revenue for digital game developers and publishers. Online marketplaces, or gray market spaces, are increasingly becoming destinations where illicitly obtained game keys, account information and in-game items are sold to deal-seeking gamers. The study, conducted on behalf of Digital River (News - Alert), recommends ways digital game publishers can deter purchases on gray sites and keep consumers safe while also protecting their game communities and profits. Titled, "Defend Your Kingdom: What Game Publishers Need to Know about Monetization and Fraud," the research paper is now available at http://driv.ws/he.

"With the entire games industry moving to an 'as-a-service' model, developers are continually releasing new, digital items and in-game updates to extend game play. Scammers are too often able to go undetected and quickly re-sell these digital products on third-party gray market sites, which hinders monetization for publishers," said Jeremy Coker, Digital River's vice president of games and entertainment. "In order to combat this growing trade, we advise game developers and publishers to improve security and transparency for in-game transactions and revamp online storefronts to meet player needs and the requirements of in-game economies."

Some findings from the study include:

  • Digital games are on track to earn $96.5 billion this year, a 10 percent growth over last year, and are expected to reach $123.5 billion by 2020.
  • Scammers are able to buy keys from publishers with stolen credit card information and then sell those keys to unsuspecting consumers on reseller sites.
  • Previously, publishers simply lost revenue from a pirated boxed game. This new form of piracy can lead to costly chargebacks and loss of legitimate revenue treams.
  • Many players don't know if their keys are illegitimate, so if publishers deactivate keys purchased by fraudsters, it punishes the unsuspecting players who bought them.
  • After Steam introduced in-game item trading in 2011, account theft rose 2,000 percent.
  • Virtual items are becoming more valuable. A miniskirt for PlayerUnknown's Battlegrounds recently fetched over $400 on the Steam Marketplace.
  • On average, PC players in the U.S. wait 21 days to buy content after they decide they want it in order to take advantage of flash sales or bundle deals.

The study provides recommendations for digital game publishers on how to attract players, keep more revenue and protect all parties from gray market fraud. Some of the tactics include:

  • Adding safeguards like trade-waiting periods and trade blackouts for new accounts.
  • Investing in proper payment safety measures, which can stop fraud at the point of sale and deprive markets of illegitimate game keys.
  • Clearly stating which third-party sites are authorized to sell their products, since consumers are becoming aware of the issues with gray-market fraud.
  • Providing players with a safe and streamlined storefront for making purchases directly from the publisher.

For more details about the research findings, visit http://driv.ws/he for a copy of the study. To hear a replay of a Digital River webinar on the study, featuring guest speaker Joost (News - Alert) VanDreunen, CEO of SuperData, visit http://driv.ws/hd.

About SuperData

Founded by veteran games industry researchers, SuperData is the leading provider of market intelligence covering the market for free-to-play gaming, digital console, mobile, PC downloadable, streaming media and eSports. Using digital point-of-sale data received from publishers, developers and payment service providers, SuperData's analyses are based on the monthly spending of 48 million paying online gamers worldwide in combination with qualitative consumer insight. SuperData helps its customers understand what people play, connect to and spend on.

About Digital River, Inc.

With nearly 25 years of industry experience, Digital River has mastered the ins and outs of global ecommerce. The company specializes in taking high-tech brands direct to their customers, whether they live around the corner or around the world.

Leading software and services, consumer electronics and digital game brands rely on Digital River's advanced commerce cloud, monetization tools and global ecommerce solutions to market and sell their products online. From start to finish, Digital River makes it easy to manage storefronts, take orders, process payments, automate subscriptions and drive delivery. At the same time, the company works behind the scenes to handle fraud, billing, taxes and compliance, so businesses and consumers can shop with confidence and peace of mind.

Digital River is headquartered in Minneapolis with offices across the U.S., Asia, Europe and South America. For more details about Digital River, visit the corporate website, read the Digital River Blog, follow the company on Twitter or call +1 952-253-1234.

Digital River is a registered trademark of Digital River, Inc. All other company and product names are trademarks, registrations or copyrights of their respective owners.

Twitter (News - Alert) Tags: #games, @DigitalRiverInc, @_SuperData, #ecommerce

Click to Tweet: New #ecommerce study from @DigitalRiverInc & @_SuperData: fraud in gray markets hurts digital #games industry & players http://driv.ws/hf


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