Fanatical: ‘Grey keys are hurting the games industry’

Grant Hughes is PR and partnerships manager at digital retailer Fanatical, which has sold over 60m game keys to customers in over 200 countries since its launch as Bundle Stars in 2012.

Grey keys are hurting the games industry and at Fanatical, an online store which has always resisted selling anything except officially sourced product, we’re making a stand against them.

With many consumers simply looking for the lowest price when it comes to buying a new digital game, grey marketplaces and unscrupulous online retailers are often quick to cash in. Why should you care? Because grey keys are a major factor in driving down the price of a new game.

So why are they so cheap? In countries where market economics dictate lower pricing, publishers have to sell their products at the local going rate. Grey key distributors then prey on these markets. They buy up cheap stock, in many cases stripping keys from boxed copies, and they scan them ready for mass digital distribution. These grey keys are then sold cheaply around the world using an extensive network of online retailers and marketplaces.

Our customers demand official keys, and they demand that we charge competitive prices. We don’t believe in a race to the bottom, whereas grey key sellers will often drastically undercut legitimate retailers and each other. All that does is drive down everybody’s profit margin and it adversely affects the entire food chain.

Unlike many of our competitors, Fanatical has gone the extra mile to combat grey key resellers. By blocking VPN access of any kind, we’ve put a stop to traders who try to buy products for resale using fake geo-IPs. Fanatical’s bespoke technology platform also has other checks and procedures in place to police the sale of its game keys. Advanced AI algorithms prevent resellers from buying products in bulk, for example if they want to stock up on limited-time discounts.

Where there’s profit to be made, there are always going to be people who will try to take advantage of pricing loopholes, so we’ve built a loyal customer base who have rejected grey keys. They want the reliability and the peace of mind that they can only get from an official retailer. Many gamers feel this way, but too many people are still blasé about buying grey keys because they’re lured in by the low prices.

But these low prices come with risks attached. Grey keys can potentially give customers a frustrating shopping experience, leading to negative sentiments being aimed at the reseller. There are stories of customers being sold keys which were previously used and no longer work, or receiving region-locked keys which won’t operate in the customer’s country.

Certain grey key marketplaces even charge customers an extra fee which promises ‘customer support’ if the supplied key doesn’t work, such is the question mark that hangs over the provenance of resold grey keys. Customers are effectively gambling with their own money.

It would have been all too easy for Fanatical to acquire grey keys, or to mix them into our licensed key pool in order to enhance profit. But we don’t condone this behaviour at all. For us, it’s all about offering the best customer service.

Education is vital. Ultimately, grey keys put less money in the hands of game developers. These are the people who earn a living by making the games we all want to play tomorrow, and you should never bite the hand that feeds.