Esports in a Nutshell | July 1, 2016

Welcome to Esports in a Nutshell having fun with the world of Esports one week at a time.

I am your host Mark Register. I have a delightful show for you with this week’s top stories: Grey Market Game Key Schemes, skin betting litigation, 4 screen Esports, and the H1Z1 revolution. A rapid fire rundown of every story in Esports and play by play highlights of Counter Strike ECS Grand Finals – Luminosity v G2Esports. Now…

 

For this week’s top stories

Grey Market Game Key Scheme using Stolen Credit Cards decimates Independent Developer Publisher TinyBuild bringing attention to the loophole schemes financially hurting Publishers and Developers which includes buying stolen credit cards on the dark web, buying discounted legitimate game keys in bulk, then reselling them for a fraction of the price on the Grey Market. The other scheme, buying reduced cost game keys by means of event sales, charity sales, and purchasing in regions where the market price is lower.

Steps are being taken to keep better track of game key history which will combat the scheme of reselling sale and region keys but as far as addressing the clearly illegal loophole scheme, let’s go back to last year when EA’s Origin service sold thousands of Far Cry 4, Assassin’s Creed, and other game keys to persons with stolen credit cards, then those persons sold them on G2A & Kinguin for a fraction of the price. EA gets hit with charge back fees and voids all keys issued with those stolen credit cards. Thousands of users went in an uproar because they bought their keys fair and square from a reseller. EA Origin eventually reverses their decision and bites the cost, G2A & Kinguin also on an individual basis claim they refunded users that requested it or customers used their G2A’s shield service where you pay $1 per month or per game, as insurance for when something like this happens, then they take care of it for you.

This week, this happens on a large scale again but now with a smaller publishing company called TinyBuild who can’t withstand the financial blow. TinyBuild claims they lost out on $450k in revenue and claims a majority stake of time was invested in trying to prevent and manage these bad purchases, tracking keys and canceling transactions before they are hit with charge backs. G2A & TinyBuild begin talks to remedy the situation. TinyBuild then accuses G2A of facilitating this illegal scheme to which G2A responds with saying quote “we are 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. 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.” Because of this G2A’s recent partner status with IGDA is under review while they gather more information to understand the situation more.

When asked if G2A is at fault for the scheme G2A replied quote “I can’t be held responsible…Cause EA said they’re valid…I won’t be held responsible…It’s your billing problem not mine” end quote, joke.

  • In a market that deals in shades of grey how can we increase the contrast of the situation to clear up the really bad stuff and make the Grey Market a single shade that’s good for all parties involved?

Buying stolen credit cards to buy keys and using a reseller site to launder the money is straight up illegal in every way. Buying games that are on sale where they money goes to charity then selling the game for more money on a reseller site is morally wrong and because in the terms of agreement for sites like Humble Bumble it’s legally wrong because they clearly state their products are sold for non-commercial use and G2A & Kinguin specify it’s prohibited to sell charity bought games. Buying games in bulk, on sale, or in regions where prices are lowered because the publisher lowers the price because they won’t be able to sell as many games otherwise…it’s certainly not good but it’s grey. This kind of scheme is the byproduct of globalization. Publishers play the game of setting prices for different regions, merchants play the game of beating them at their game. It’s nothing new, this is a very old market.

As far as incentivizing customers to buy games at full price, the “can’t we all just get along” answer is, Publishers and Developers you should build the relationship with your customer base so they feel the feeling of supporting you while financially supporting you buying your games at fair and full price.

But reality check, people will find the lowest price or will find ways of obtaining your games for free so yes you have to close the worst loopholes like buying keys using stolen credit cards. One way of doing that, resellers could work with publishers to identify key sale dates only allowing merchants to sell game keys 14 days after their initial purchase date allowing credit card companies enough time to flag stolen credit cards not allowing the merchant to cash out. Or you can just use G2A’s G2A Pay.

Just like Amazon, Craigslist, and Ebay G2A & Kinguin are wonderful marketplaces as long as you traverse them carefully and live by the adage , If it seems too good to be true it is.

 

Michael John McLeod sues Valve for enabling an “Illegal Online Gambling Market” and profiting from it.

The claim claims Steam allows users to link their accounts to 3rd party betting sites like CSGO Lounge, CSGO Diamonds, and OPSkins which allows you to buy skins with money, gamble with those skins, then cash out the skins for money using the 3rd party sites. The Skin is like a casino chip, where you go to the cashier, exchange money for chips, gamble with chips, then exchange the chips you win for cash.

Currently the argument falls flat as Skins are virtual items not seen by the law as an item of value so they are not violating the Racketeering Influenced and Corrupt Organization Act but if the court decides that the Virtual Item Skins are in fact an item of value, the case has a strong leg to stand on and can move forward as a class action lawsuit.

If it moves on as a class action lawsuit then everyone who’s been betting with skins and lost money could receive part or all of their money back from Steam, CSGO Lounge, CSGO Diamonds, and OPSkins.

For perspective of how large this market is, in 2015 3MM people wagered $2.3BB in Esports mostly through unregulated platforms like those mentioned in this claim.

 

  • Will Michael John McLeod win his case against the various skin betting sites resulting in bankrupting and shutting down the Skin betting industry?

If the case gets funding support from people who want to take down the Skin Betting Industry they will either expand this case or start a new one. With the pool of funding they will pour it into lawyer hours to write up a clearer argument on specific cases that prove Skins are an item of value and evidence that the parties involved acknowledged that fact and participated or facilitated illegal gambling of not only adults but minors. If they can do that then they can claim these companies violated the Racketeering Influenced and Corrupt Organization Act to hold them accountable effectively closing the loopholes used in this well crafted industry.

 

Znipe Esports founded by Erik Åkerfeldt and Johan Ryman announces their customized streaming platform Znipe TV allowing you to view up to four streams at a time from their 12 streams per event, so you get to be the technical director for the show you’re watching.

 

  • Will Znipe TV actually change the way we watch Esports?

90% No 10% Yes.

Let’s start with the 10%. Znipe TV is a perfect product for the generation of Esports. Most viewers have games on in the background while they do something else and are excellent multitaskers usually firing on all cylinders bouncing between tasks. Now when there’s a big game that a user really cares about they get to fire on all cylinders by switching between shots allowing them to see the story unfold in their own unique choosing of perspective. If this is adopted by the community more resources will be put into finding new ways of visually telling the story, finding new perspectives, blending visuals and audio into an experience you can use every bit of active brain power you have to squeeze the entertainment out of the best matches.

Now the 90%. Most games, people like to watch passively while they go do something else. Just like you would put on music while you go clean up or are working, you can put a game on in the background. And some people, even for the big games, like to sit back and relax or watch with other people, and when that’s the case, you want one screen and one experience to share with those around you.

 

Rick Fox says action survival game H1Z1 which is still in Beta will be the next big Esport.

 

  • What can H1Z1 do to be a revolutionary game?

It can keep doing what it’s doing and build on it. H1Z1 split off into two game modes, King of the Hill where everyone battles to the death like the movie Battle Royale, and Just Survive where you team up with other players to survive the apocalypse like the Walking Dead.

Now let’s start with Just Survive, we work with other players to achieve objectives and to survive, building bonds that will last a lifetime, which may not be very long.

Once you build those bonds, you then parachute onto an island where only the strongest can survive and you see a very interesting thing happen, alliances happen out of necessity or feeling but ultimately are put to the test as the game slowly pushes towards only one member to survive by killing someone randomly if someone doesn’t kill someone or making certain areas deadly at different times making people move around constantly running into each other keeping everyone on edge just like the movie Battle Royale.

All while this is happening, you treat this like a reality TV production filming the interactions of players as they build relationships in King of the Hill mode only to watch the drama unfold as they betray their closest friend in Just Survive then have post game interviews, cut it all together now you have an Episode of Real Housewives of H1Z1 that would be incredibly entertaining to watch blending the train wreck drama of Reality TV with the action of Videogame play.

When someone finally executes this idea we can exchange thank you cards.

 

And now here’s the rapid fire rundown of everything that’s happening in Esports to give you a table of contents if you’re feeling scholarly or just the cliff notes.

 

  • Misfits organization acquires Overwatch team Graviton Surge
  • SK Gaming picks up Luminosity Gaming for their Counter Strike division.
  • SuperData reports Overwatch has made $269MM on PC & Console and counting
  • Vice Media hires Austin Walker to head up their video game news and culture vertical.
  • Canal+ who just sponsored Team Vitality, will launch a weekly Canal E-Sport show in September.
  • Formula E announces they will be holding a virtual race in Las Vegas, January with a prize pool over $100k.
  • Twitch and Super Evil Megacorp announce the Evil Eight a weekly tournament and its 2nd tier challenger series.
  • German Bundesliga Football Club Schalke 04 recruits Joshua Begehr Krone, Mario Viska, and Cihan Yasarlar to their FIFA Esports division.
  • G2 Esports defeats Luminosity winning $250k and the ECS Season 1 Grand Finals. Luminosity came home with $125k so they are doing ok.
  • Emil Christensen Heaton is the first player to be inducted into the Esports Hall of Fame at ESL One Cologne next week starting with Ninjas in Pyjamas in 2000 as a player then retiring in 2007 to become the team’s general manager.
  • Darren Cox who helped launch the GT Academy project which allowed gamers to cross over into racing real racecars, launches the first EMotorsport race team while procuring their first sponsor – Greaves Motorsport.
  • The British Esports Association’s Chairman Andy Payne and CEO Chester King announce their organization’s existence as the National Governing Body for Esports in the UK in conjunction with the Department for Culture, Media, and Sport. They also announce their plans to build a National Training Centre.
  • Thiemo Bräutigam from Esports Observer reports Germany’s interest group for digital entertainment BIU led by CEO Maximilian Schenk launches their Esports initiative partnered with Activision Blizzard, EA, Microsoft, and ESL to lobby for official recognition for Esports in Germany also helping simplify the visa process.
  • The White House responds to the Esports Visa Petition for Leffen saying the agency responsible for issuing Visas, USCIS, does not have a quote “current policy categorically precluding an Esport from being recognized as a qualifying athletic competition. In fact, USCIS has approved P-1 visa petitions for athletes seeking to enter the United States to compete in eSport events…Given this is a case by case adjudication, a particular denial or approval does not necessarily represent a broader policy interpretation or change.” end quote. USCIS is like the DMV it’s not the most enjoyable process but everyone has to go through it.

Well that’s it! I hope you learned and laughed a little and I’ll see you next week.

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