The digital PC game market in France is significantly impacted by an illicit market, where game keys are resold at prices up to 60% lower than official retail prices, often before a game's release, leading consumers to perceive official prices as too high.
02
This illicit market is fueled by geographical price differences (e.g., keys sold for €19 in Poland vs. €49 in France) and physical wholesalers reselling keys from boxed games to unofficial sites, with German wholesaler Gross Electronic GmbH identified as a major supplier to MMOGA.com from 2013-2015.
03
Major illicit platforms like MMOGA (sold for €306M in 2015 with over €100M revenue) and G2A operate from offshore locations (e.g., Hong Kong, Eastern Europe) to avoid European VAT and consumer protection laws, despite often having significant European customer bases (e.g., over 60% French audience for some sites).
04
These illicit sites exploit loopholes in VAT collection by registering offshore, though EU rules since 2015 require VAT to be paid based on the buyer's location; they also benefit from search engines like Google and specialized price comparison sites (e.g., Allkeyshop, DLcompare) promoting their discounted offers.
05
The illicit market is characterized by widespread VAT fraud and non-compliance with consumer protection laws, with authorities largely inactive in pursuing these offshore entities despite clear evidence of local ties (e.g., French-speaking support, local payment systems like Hipay, significant local social media presence).
06
The report suggests that payment providers, advertisers (like Google), and even game publishers themselves (due to their distribution practices and lack of action) could be held accountable for aiding and abetting these illegal activities.
Insights
01
The digital PC game market in France is significantly impacted by an illicit market, where game keys are resold at prices up to 60% lower than official retail prices, often before a game's release, leading consumers to perceive official prices as too high.
02
This illicit market is fueled by geographical price differences (e.g., keys sold for €19 in Poland vs. €49 in France) and physical wholesalers reselling keys from boxed games to unofficial sites, with German wholesaler Gross Electronic GmbH identified as a major supplier to MMOGA.com from 2013-2015.
03
Major illicit platforms like MMOGA (sold for €306M in 2015 with over €100M revenue) and G2A operate from offshore locations (e.g., Hong Kong, Eastern Europe) to avoid European VAT and consumer protection laws, despite often having significant European customer bases (e.g., over 60% French audience for some sites).
04
These illicit sites exploit loopholes in VAT collection by registering offshore, though EU rules since 2015 require VAT to be paid based on the buyer's location; they also benefit from search engines like Google and specialized price comparison sites (e.g., Allkeyshop, DLcompare) promoting their discounted offers.
05
The illicit market is characterized by widespread VAT fraud and non-compliance with consumer protection laws, with authorities largely inactive in pursuing these offshore entities despite clear evidence of local ties (e.g., French-speaking support, local payment systems like Hipay, significant local social media presence).
06
The report suggests that payment providers, advertisers (like Google), and even game publishers themselves (due to their distribution practices and lack of action) could be held accountable for aiding and abetting these illegal activities.