Yesterday the CEO of TinyBuild, Alex Nichiporchik, accused game code marketplace G2A of costing his company $450,000 in lost revenue by providing a marketplace where fraudulently purchased games could be sold below retail price. Later that evening, G2A issued several statements in their own defense, among them a demand that TinyBuild provide more information within three days.
The entire situation has devolved into a war of words being waged in public, and has even caused the International Game Developers Association (IGDA) to re-evaluate their business relationship with G2A.
The inciting event
Nichiporchik tells Polygon that this all began when a G2A business development representative got in touch with him around March 22 to discuss a blog post he had made about piracy of TinyBuild’s recent release, Punch Club. Also involved in that email thread were representatives of IndieGameStand, an authorized TinyBuild reseller who had recently published a blog post on gray market key resellers.
Nichiporchik says that during those private conversations, a G2A representative showed him data on TinyBuild games already being sold through the G2A marketplace. The result of that conversation was the post made yesterday, which detailed how $450,000 worth of TinyBuild games had recently been sold through G2A for a fraction of their retail price on marketplaces like Steam, Humble Store and TinyBuild’s own online store.
Digging deeper, Nichiporchik told Polygon that he was able to purchase his own game codes from G2A and link them back to fraudulent transactions made through TinyBuild’s own online store. These transactions were ultimately "charged back" by the issuing credit card company, taking revenue from TinyBuild’s bottom line.
It is those confirmed fraudulent chargebacks linked to G2A that led Nichiporchik to write that "websites like G2A are facilitating a fraud-fueled economy."
G2A fires back
Late yesterday, G2A responded. In a statement sent to Polygon it said that TinyBuild’s March blog post on piracy contains "unreliable information." In the course of its sales calls, G2A says it simply asked Nichiporchik for a list of all the game codes that he believes were purchased fraudulently, and offered to use that information to purge individual items and, if need be, remove certain resellers from their marketplace.
Sharing that information, for IndieGameStand at least, seems to have yielded results.
"All G2A asked, was to cooperate with TinyBuild to rectify the issue, which is the list of the keys they deemed without any verification that they are stolen," the G2A statement said. "Only then can G2A compare these keys against the G2A marketplace database and report those findings back to TinyBuild. Unfortunately, TinyBuild never came back with the answers to resolve the issue."
But G2A didn’t stop there. Instead, they began to elaborate on how market forces will naturally push down the price of a game, and how the $450,000 quoted by TinyBuild was not a valid sum.
"Why did TinyBuild refer only to the highest price point in their product history? While on the real market you can buy their products in a bundle on an 85 percent off discount as sourced. Finding a better medium [sic] price here would give a true overview. TinyBuild should explain to the media why they omitted their sales data from the revenue projection. ... G2A.COM calls for TinyBuild to provide their list of suspicious keys within 3 days from the date of this transmission."
The full G2A statement can be found here.
A statement in Russian
Nichiporchik maintains that the "cooperation" that G2A wanted was not merely a list of codes, but his company’s participation in the G2A.Pay payment solution, a proprietary payment portal from which G2A profits. Only then would they agree to work with him to root out fraud on their platform.
A statement given by G2A to the Russian site Kanobu seems to support that line of argument. Translated from Russian by G2A, the statement reads in part as follows:
G2A.COM ... is not responsible for the vulnerability of other billing systems. We are very sorry that TinyBuild’s own shop was a target for these attacks and that this incident affected our negotiation process. We hope to resume good communication because G2A is an open door for cooperation.
However, G2A's public relations team asked that Polygon "disregard" the final paragraph of the statement given to Kanobu, which they translated as follows:
Furthermore we invite every developer and publisher that has any problem with charge backs to start using G2A Pay, free of charge with 100% security and all cost of any charge backs will be covered by G2A.
That quote, G2A's public relations team tells us, "should not be part of the official comment from G2A."
The quote still appears on Kanobu, and we've asked G2A to clarify why it has been requested that we ignore it.
Where things stand today
From G2A’s side, the clock is ticking for TinyBuild to comply with their demands for a list of fraudulent codes. What will happen if they do not comply has not been made clear.
For his part, Nichiporchik says TinyBuild is not interested in sharing any more information with G2A.
"Everybody knows their reputation," Nichiporchik told Polygon. "Why would anyone even consider giving them a list of keys to ‘verify’? I believe they'd just resell those keys and make more money off of it."
In fact, Nichiporchik is now more concerned that G2A is trying to damage his company’s reputation.
"I am concerned about G2A now trying to discredit us on unrelated subjects," Nichiporchik said. "They should just spend their marketing dollars on developer advances on royalties and taking a hit by enabling devs to set minimum price points for their games. Or simply allow us, as the publisher, to prevent sales of our products on their site.
"No developer is going to put their games onto G2A when any other merchant on [that] site can undercut them. Are you going to undercut Steam by selling games yourself? Of course not. G2A isn't facilitating an easy way to have a working relationship. If there was an [administration page] I could login to and set a minimum price for our games, that'd already be a very good start. But G2A understands this would hurt their business."
IGDA speaks out
When Polygon visited this year’s Game Developers Conference in San Francisco, we noted that the International Game Developer’s Association (IGDA) was prominently sponsored by G2A. Many indie game developers took to Twitter to decry the choice of sponsors, given the company’s history with small developers.
Conference overseer Simon Carless even went so far as to publicly clarify that G2A was in no way sponsoring GDC itself.
@C418 FWIW, G2A is not an official GDC sponsor/exhibitor. (They seem to be supporting the IGDA's presence at the show somehow?)— Simon Carless (@simoncarless) March 14, 2016
Polygon reached out to IGDA following yesterday’s post by TinyBuild to find out how this kerfuffle would influence ongoing relations between G2A and IGDA, which ostensibly stands to protect and promote the interests of indie game developers around the world.
"As part of their one-off GDC sponsorship, G2A was granted IGDA partner status earlier this year," wrote IGDA director Kate Edwards. "But given the current complaints from TinyBuild, we have requested additional clarification on the situation from G2A’s senior leadership. While we do not want to jump to any conclusions before gathering all the facts and hearing from all parties, if any IGDA partner was found to be conducting business in a manner that hurts developers, the IGDA would disassociate itself with that organization as soon as possible."
Polygon will continue to follow this story, and gray market game resale generally, in the future.
Update: Polygon received via email today a formal translation of the Russian-language statement given to Kanobu. We've replaced the relevant parts in our story above.
Additionally, G2A has asked us to ignore certain parts of the statement given to Kanobu, though no formal retraction has been issued. We've updated our story, and continue to request clarification on the matter from G2A.