Ubisoft and Genba to "kill the grey market" with silent key activation Genba's Matt Murphy reveals how the two companies are clamping down on key reselling

James Batchelor UK Editor Thursday 2nd May 2019 Share this article Share

Companies in this article Genba Digital Ubisoft

Ubisoft has partnered with UK tech firm Genba Digital to change the way it sells PC download titles through third-party stores.

The two companies have worked on a new process called silent key activation (SKA), that not only aims to make it easier for customers to purchase games, but also prevents those games from being sold illegally through other channels.

Genba specialises in third-party digital games distribution, sourcing games for digital retailers to sell. It takes bunches of game keys from publishers and distributes them via its own technology to stores. But this is handled on a one-to-one basis; only after retailers have recorded a sale do they get another key for that particular game.

"That gives the publishers control of how their products are distributed, rather than the old fashioned way: throwing a big Excel spreadsheet of keycodes to e-tailers and asking them to declare their sales," CEO Matt Murphy tells GamesIndustry.biz.

"Silent key activation doesn't pass on the key to the e-tailer or, as a consequence, the end user. It stays with Genba. We take a number of keys off Ubisoft for a game like Assassin's Creed Odyssey and we'll set on that keybank.

"If someone goes on a website like Fanatical and buys a Ubisoft product, it will take them through the checkout process, then ask you to enter your UPlay account -- if you don't have one, it asks you to set one up. The game is then automatically activated in UPlay. Fanatical doesn't get a key, and neither does the player. They just log into UPlay and the game is there, as if they bought it from the UPlay Store.

"It's preventing keys being bandied around the market, so they can't be resold. I suppose you could sell your account, but they'd pick up on that and that's a very messy way of reselling games."

Murphy notes that this also prevents the retailers themselves from redistributing the keys, helping them to "build up their reputation as legitimate sales only."

The drive towards silent key activation is very much driven by Ubisoft, who will no longer sell PC games through a digital marketplace that doesn't use this process. As part of this partnership, Genba now handles this for 10 retailers -- including Fanatical and GamersGate -- while others like Green Man Gaming do it directly with similar technology. Any other retailers in Genba's network that wish to sell Ubisoft games will need to be SKA approved first.

Murphy says this method is "really tightening up on security" and could be a significant step towards closing off the grey market.

"Keyless distribution will become the standard. I don't know how far in the future but it's not very far away"

"In the old days it was open to abuse -- it still is if there's no technology managing that process," he says. "You could be sitting on 1,000 keycodes for a product, the publisher then tells you it's on sale for the next 24 hours at a reduced price, and it's down to you to declare when you sold those products. You could say you sold them all at promotion, but actually sell them at full price outside the sale.

"That's the grey market, people blending discount rates. Genba tries to kill that, by saying it's the price you sold it for at the time you sold it. And then [silent key activation] goes another step in that there isn't even a key so it can't be resold."

It also removes the danger of individual employees at the retailer taking a handful of keys and selling them elsewhere. Even at Genba's end, Murphy reports that none of his staff -- himself included -- can access the keybank sent by publishers.

Moreover, he believes this -- and other technologies like it -- will become the industry standard for digital distribution.

"If you don't control the grey market, your game could be 30% off the day you launch it -- and that's what really riles publishers," he says. "This is Ubisoft's way of countering that -- and the other guys aren't that far behind.

"This broad concept of keyless distribution is called 'direct entitlement', and that will become the standard way of operating. I don't know how far in the future but it's not very far away. Probably within a year I think all the big guys will be doing it that way."

"It's frustrating that it hasn't happened quicker, but [reselling will stop] as technology catches up and we move to keyless"

And Genba is very much determined to be part of that movement. While the partnership is still under NDA, it's also working with "another AAA publisher and platform player" on a project that will "raise the bar again", with no internal token, no key at all -- just a link between the sale and activation on a first-party platform.

"It's as secure as buying a game on Steam and playing it on Steam," he says. "You'll be able to buy it on Fanatical and play it on Steam or whatever the platform is. That's the model that everyone's going to try and go to. I think the big guys will do it first because those guys value their IP very highly and have the skills, the desire and the money to do something about it.

"There are other steps that can be taken as well, like region-locking keys so they can't be sold outside of a set region. But this is a massive step which we think will drive the market forward."

The grey market has long been an issue for digital retailers and publishers, but Murphy is confident the rise of keyless activations over the next year will massively aid efforts to cut it off. So why has it taken this long to get here?

"It's a bit like trying to change the rules -- you need everyone to move at the same speed, or move together," he says. "If I could click my fingers and magically get us to a position where this was implemented, then we wouldn't have the issue of the grey market.

"We only work with legitimate e-tailers and they're always bemoaning the grey market because they don't feel there's a level playing field. You've got organisations that are registered off-shore, don't pay VAT, so instantly have an advantage in terms of being able to discount. They can seemingly somehow get their hands on keys at launch for a discounted rate, and it really frustrates our guys."

Murphy predicts that the "eradication of the boxed product" in the PC market will be a big step forward, and indeed some of the biggest publishers have already achieved this. Sega only sells PC games digitally, preventing people from securing the digital codes from the boxes and selling them on.

"Publishers can get rid of physical goods and that will make it easier, because technology can always handle that much more effectively," Murphy concludes. "It's frustrating that it hasn't happened quicker, but it will happen as technology catches up and we gradually move to wholly digital and keyless. Where do we go from there? Who knows."