Beyond Steam: Uncovering the Truth About the Grey Market

The PC gaming industry is booming, with alternative distribution channels playing a significant role. However, concerns about the grey market have led to misconceptions about selling game keys outside of Steam. Vadim Andreev, co-founder and CEO of Rokky, is here to debunk these myths and provide insight into the world of game key distribution. The games industry is full of associations: Sonic and hedgehogs, anti-cheat and Denuvo, gatekeeping and Apple, and, of course, PC gaming and Steam. Despite increased competition from the Epic Games Store, Steam remains the dominant force in PC gaming, with an estimated $10.8 billion in revenue in 2024. Valve's platform boasts over 132 million users, making it an attractive platform for developers and publishers to reach a vast audience. However, Valve's 20-30% cut of sales revenue has raised concerns among developers and publishers. While other storefronts have emerged with lower overheads, Steam has maintained its revenue share, leading some to argue that Valve is unfairly profiting from game sales. An ongoing class-action lawsuit initiated by Wolfire Games may change this, but for now, Valve continues to generate significant revenue from game sales on its platform. Developers and publishers are also exploring alternative distribution channels, such as selling Steam keys on third-party sites like Fanatical and Humble. These storefronts have attracted significant traffic, with some estimates suggesting they account for at least 18% of Steam's traffic and 10% of its gross merchandise value. However, selling keys outside of Steam raises concerns about the grey market, a mysterious and often misunderstood concept. To address these concerns, it's essential to understand the different types of game keys and how they can be sold. Valve provides guidance on selling Steam keys outside of its platform, allowing developers and publishers to request up to 5,000 standard release keys to sell on other storefronts. The only caveat is that these keys cannot be sold for less than the price on Steam, and any discounts offered must also be available to Steam users. Marketplaces and e-stores are often confused with the grey market, but they are distinct entities. Marketplaces like G2A allow publishers to sell approved keys, while also featuring keys resold by consumers or grey market resellers. E-stores, on the other hand, are online shops where developers and publishers provide keys directly to the platform, ensuring a direct chain of custody from publisher to consumer. The grey market is not a physical place but rather a concept that occurs when game keys are resold in a way that reduces publishers' profit margins and makes them feel out of control. Regional pricing manipulation is a significant factor in the grey market, as keys from regions with weaker currencies can be resold in countries with stronger currencies for a substantial profit. Developers and publishers can prevent their games from entering the grey market by implementing measures such as region-locking and pricing keys accordingly. Key management platforms can provide visibility into where and when keys are sold, helping studios to monitor and control their distribution. Partners can also assist in distributing keys to global e-stores, monitoring key sales, and consulting on pricing to avoid players reselling titles. In conclusion, selling keys outside of Steam is not an automatic route into the grey market. By understanding the different types of game keys, implementing measures to prevent regional pricing manipulation, and working with partners to distribute keys, developers and publishers can reduce fees and bring their titles to new international markets. Alternative distribution is not a threat but an opportunity for game companies to expand their reach and revenue streams.