Interesting look at a raffle economy of luxury goods: SteamGifts and bundle keys

glennmagusharvey

http://www.steamgifts.com/forum/Lgwcp/handling-bundle-keys

Some background information: (NB: currency described is U.S. dollars.  TLDR version at bottom of post.)

1. What is Steam?  How does it work?

Steam is a digital distribution service for computer games, first established in 2003 (or 2004?) by Valve Software, which is famous for such games as Team Fortress 2, Portal, and Half-Life.  After a while, Steam began hosting games made by companies other than Valve.  It also got a gifting feature, where you can buy a game as a gift for someone else.

Starting in 2011, Steam introduced a feature called "Steam Trading", in which people could exchange items between different games hosted on Steam that participated in Steam trading (most notably, TF2 items).  Later, this feature was expanded to Steam items: coupons (for discounts on games and gaming accessories) and games themselves.  So basically, you can gift and trade games.  As a Steam user, these items are kept in your "inventory", which can be set to be publicly or only privately viewable.

You can also redeem "keys" (a.k.a. "CD keys", "key codes") for games and DLC on Steam, from purchases made elsewhere.  For example, you can buy Magicka on GamersGate, get a Steam key, enter that key into the Steam wrapper client (which is what allows you to play Steam-installed games), and voila, you'll now have Magicka as a game you own on Steam.

2. What are indie games and bundles?

Starting with the success of the late 2004 indie game Cave Story, as well as the rise of digital distribution, indie games began becoming a significant thing in the world of videogames, especially computer games.  Indie games are ones that are developed with no backing from a major publisher--the usual model has the publisher hiring a team of devs to make a game, but with indie games, the devs make the game and then get it published; indie games vary greatly in quality and dev expertise (ranging from silly flash games by bored kids to highly polished critically-acclaimed blockbusters by big-name developers).

A recent trend in the indie game scene has been to try various "pay what you want" models for selling games.  The most prominent early example of this is the Humble Bundle, which offers a bundle of a few indie games, and asks customers to pay what they want.  While you can pay just one cent, there is an incentive to pay more--if you can pay more than the average, you get additional games or other goodies.  Some bundles just force you to pay a certain minimum amount (with other incentives to pay more).

Given the success of Steam as the gaming world's biggest and most influential digital distribution service currently, most of these bundles offer Steam-redeemable keys for their games, even if they also offer DRM-free downloads.  Some bundles specify that keys are for personal use only.

3. What is SteamGifts and how does it work?

SteamGifts.com is a website that allows people to raffle off Steam games.  A user can create a giveaway for a certain game, which other users can enter; when the giveaway's scheduled closing time has passed, the site randomly choose a user who entered, and directs the giveaway creator to gift that winner the game.

What prevents users from entering every giveaway?  SG has some rules:

• Giveaways cost "points" to enter.  The point cost is equal to the base list price of a game on Steam (without discounts).


• Every user gets points based on the following: a new user is granted 15 points, and every time a new giveaway is created, all users except the giveaway creator get points equal to 5% of the base list price of the given-away game (minimum of 1 point).  Give away a $39.99 game?  Everyone else gets 2 points.  Give away a $4.99 game?  Everyone else gets 1 point.


• You can keep a maximum of 300 points; even if people keep making giveaways, you'll get no more points unless you use some.


• When you win a giveaway, you MUST activate the game (after receiving it) within 7 days (and the site will check that; the games you own have to be publicly viewable if you want to use the site).  You may not win games to give to friends or re-giveaway (well, you can, but if you do, you get banned).

SG's userbase size is on the order of tens of thousands.  Each giveaway usually gets several hundred entries, depending on the game--frequently-gifted games (such as Faerie Solitaire and Portal) tend to have as few as 100 or 200, while hot games (usually triple-A titles such as Skyrim) can get as many as 1500 or 2000 entries.

Usually, and not surprisingly, you'll tend to see giveaways created for games that are on sale at the moment.  75% off The Binding of Isaac?  You'll see a bumper crop of The Binding of Isaac giveaways.  This applies to sales on Steam as well as elsewhere (such as GamersGate), because SG allows people to give away both Steam inventory instances of games and keys.

4. So what's the problem with SteamGifts and bundle keys?

Well, first, some bundles say that keys are for personal use only.  That said, some of them don't say that.

Second, bundles are usually a source of deeply discounted games--and do I mean deeply.  Sale prices on Steam usually go no lower than 50% or 75% off, but a bundle's price is generally approximately 50% to 75% off a single game in the bundle--so if you account for all the games, we're talking something more like 90% off.  For example, if a game contains five games usually priced at $10 each, but you can buy the bundle for $5, you're getting 90% off...and that's before you remember some bundles let you pay-what-you-want.  If you REALLY exploit that, you might lose that fifth game (which was the beat-the-average incentive), but you'll still be getting $40 worth (base list price) of games for...$0.01.  That's 99.975% off.

This means that:

• people can cheaply acquire bundles, complete with Steam keys, and then give them away on SG, spamming the giveaways list with tons of giveaways for certain games.


• people may be able to exploit the pay-what-you-want system (depending on the bundle) and get games for far cheaper than the developer might have in mind (keep in mind these are indie developers, not studios with solid financial backing)


• people may cheaply acquire Steam keys in order to farm for certain promotional items on Steam.  (This was a big problem during the end-of-year sale in 2011.)

To combat this, some bundles now have policies such as a minimum price to get Steam keys (Humble Bundle), or forcing you to pay for transaction fees if your PWYW price is too low (Indie Gala).

Even so, the price of bundles--usually several dollars for several games, averaging about a dollar or two for each game--making them much cheaper than through other (legal) methods of acquisition.  This is enough for there to be quite a glut of giveaways on SG for games featured in bundles--and there are quite a lot of bundle sites these days (Humble Bundle, Indie Gala, Indie Royale, Groupees BeMine, Indie Face Kick, and others), at least three of which (HB, IR, and IG) have gone through like six different bundles by now.  Furthermore, as you might guess, not every game in a bundle is equally in demand, so you might get people redeeming Darwinia and then dumping their Uplink key on someone else.

SG dealt with this in a few ways.

A policy was enacted that bundle keys are not allowed at all.  This has been policy for several months now.  However, this is suboptimal for a few reasons:

• You don't have to say where a giveaway's game is coming from.  You can mention that in the description if you want, but you are not obligated.  This is in part because people don't want to have their Steam inventories publicly viewable (a number of people have cited lots of unwanted attention they get for having various TF2 items, as TF2 item trading is a really big thing, big enough for Valve to hire an economist), and in part because keys would be very difficult and time-consuming to verify.


• This just means that individual giveaways that are suspected (or even outright stated) to be bundle keys must be flagged, then individually reviewed by moderators for removal.  This is very labor-intensive, and with how many giveaways there are (there are usually several hundred active at any given time), the mods really haven't been able to deal with every flagged giveaway.

Now, if you know what's going on, you can generally guess where a game is coming from.  In January 2012, if you saw someone who'd created giveaways for Zombie Shooter, Zombie Shooter 2, and Your Doodles Are Bugged!, all at around the same time, chances are they bought the first Indie Gala bundle.  Right now, if you see someone offering Torchlight, chances are it's a Steam inventory instance they got for free from the pre-order promotion for Torchlight 2.  But without intensive mod labor, there's just no way to verify these--especially when people DON'T give a description.  (And asking for people to describe or ban is also mod work, though possibly less.)

A giveaway software change was also made to allow giving away entire bundles.  Some bundles have gifting options, where you can buy the bundle and gift it to someone else (with a giftable URL); you can gift these via SG too.  Though this gives gifters an outlet if they want to gift bundles via SG, it doesn't directly address the problem of bundle keys being given away.

On the other hand, one step backward was recently caused by a new feature called contributor giveaways.  For these giveaways, the giver gets to say that the ONLY people who can enter are those who have given away at least $X worth (base list price) of games (where X is anything from $0.01 to $2000).  Obviously, the more value you've given away the more giveaways you can enter...and remember how someone can get $50 worth of games for just $5?  This new feature just creates an incentive to game the system.

Not to mention that some people just do want to give away their bundle keys (which is currently allowed in the forum, but there they clutter up the forum).  And some people really do want those games.  And it is quite the buzzkill to both sides for a mod to step in and say "no, you can't give this, and no, you can't receive it either".

So right now, the question is: what do?

Ideas currently being considered include:

• make givers declare whether their gift is a key or inventory item, and make the receiver verify whether the gift was a key or inventory item.


• give people a secondary way to give away bundle keys, that doesn't grant the benefits (contribution record for giver, extra points for everyone else), and doesn't clutter up the main giveaways list (for example, making a separate list for bundle key giveaways)


• making people make their inventory public once a week or so just to synch up to SG (SG already checks people's libraries to prohibit people from entering giveaways for games they already own)

 

TLDR version

Bundles produce Steam keys cheaply.  Steam-game-raffling site SteamGifts.com has to deal with people giving away these keys and reaping the benefits.  How should it deal with this?