The PC games “gray market” isn’t just a couple of shady websites. It’s an economic behavior that exploits regional pricing and promotion timing to siphon revenue away from publishers. In this episode, Our host, Alexandra Takei, Director at Ruckus Games, sits down with Vadim Andreev, CEO of Rokky (and former founder of PlayKey), to unpack how retail-era code resale evolved into today’s global key-arbitrage machine.

Vadim breaks down two core leak points: regional price arbitrage (buying keys in cheaper markets and reselling in premium ones) and promo stockpiling (buying deep-discount keys during sales, then reselling after discounts end). He argues the damage is material: publishers can lose roughly 20 to 40% of margin to resellers, often without realizing how much of their “regional” volume is being cannibalized elsewhere.

The conversation gets practical fast: why region locking is table stakes, how publishers frequently mis-bucket territories (China and New Zealand), and why Steam’s price recommendations can lag real exchange rates and taxes. Rokky’s pitch is a mix of distribution and defense: API-level checks (IP, identity, purchase limits), a key management dashboard, and pricing/promo optimization to close the gaps attackers exploit. The conversation ends with a discussion about Valve and their role in games distribution and the gray market and what they could do to help mitigate the problem. 

We’d also like to thank Lightspeed Venture Partners for making this episode possible! With its dedicated gaming & interactive media practice, the firm invests from an over $6.5 billion pool of early and growth-stage capital. If you’re interested in learning more, go to https://gaming.lsvp.com/.

This transcript is machine-generated, and we apologize for any errors.

Alexandra: What's up everyone? And welcome to the Naavik Gaming Podcast. I'm your host, Alex, and this is the Interview and Insight segment. Hello, 2026. I hope everybody had an amazing holiday and a happy new year.

I'm back in the studio and kicking off with what I hope is another great year of content in the business of games, content and interactive tech. Today, we are talking PC, As the global gaming market reached 197 million in 2025, PC was forecasted to contribute 43 billion of that 200 billion, up 10% year over year from 2024.

But we're not gonna talk about the traditional PC market, but rather its sort of underground twin, the PC gray market. And in the past, the gray market used to be a retail dominated land. Hopefully as a listener, you're old enough that you remember heading to Blockbuster or GameStop and buying a used copy of a video game.

But in the digital world, the gray market has become even more vast and is ostensibly not a physical place, but rather a concept of reselling in general. Whether or not it's authorized or not is something that we'll discuss today. Market sites like G two A and Green Man Gaming, aggregate keys from a variety of sources, primarily benefiting from regional price arbitrage, i.e. buying keys from cheaper countries and reselling them in more premier markets.

Even though this can be done during promotional periods, or fraudulent or as fraudulent purchases, for the publisher and the developer, this is clearly disadvantageous. Regional processing in pricing is meant to benefit the in region consumer whose wallet size and spending power might be lower based on currency strength or other basket of consumer goods conditions.

A gray market site buying up a key and then selling it in a more premium market benefits the gray market versus putting that money in the developer or publisher's pocket. So today we're gonna talk more in depth about the PC gray market. How big is this problem actually? Who is it affecting the most?

The history of the gray market, from evolution to retail to digital and solution providers that are tackling this problem. My guest today is Vadim Andreev, the CEO of Rokky. Rokky is a global digital gaming distribution platform that connects publishers and digital for with digital storefronts with all over the world, streamlining the sale of game keys and combating the gray market.

The goal is to protect publishers from gray market exploitation, while also facilitating sales. Vadim, prior to founding. Rokky founded a company in the cloud gaming solutions space called Play Key, which he sold to Mail Ru, Vadim and I connected several months ago, and it's 2025 now. And this episode has been a long time coming.

So, Vadim, welcome to the pod. How are you doing?

Vadim: Yeah. Thank you Alex. Thanks for having me today. Yeah, it's a great pleasure to be here and to talk about the market. First of all, so a bit of myself. So, I'm in this business since 2009 and I did see how this industry develops and what you said about the gray market, like and Green Gaming. I would say, I do not consider Green Gaming as a gray market, but we will talk about this later today and I think we can, we'll be able to draw the line between the gray market, which is the gray market exactly, and which is not. So, yeah. So, we are doing the digital distribution. We help publishers to sell their games across all over the world, especially in the heart to reach regions like China.

And we are trying to protect them from the gray market. And today, I'm happy to discuss this because in the industry usually people do not speak about the gray market like loudly. So today we try, we'll, we'll try to speak about this absolutely transparent and everything what we can say.

Alexandra: Okay, I got it. Very, we'll speak about it very loudly. That is as it is of course, the, the topic of our entire discussion. But, so thank you for sharing a little bit about background, about like why, you know, how you started. But I just actually have more of a, a personal question before we kind of get into the nuts and bolts of our episode. Like why are you specifically passionate about solving the gray market for, for devs and publishers?

Vadim: We see, so when we, when we work with partners and we work in the digital distribution, we understand that we very often compete with the gray market. And we, we understand that we need to fix this issue to grow faster.

And we understand that there is a problem, big problems of, of publishers who struggled with the revenue and, because of the gray market. So, we know how to fix it, we know how to fix it, and we just want to show publishers that that's not a, not an issue at all. So that's, you can, you can, you can handle it so we can face the problem and you can tackle it and work with it.

Alexandra: I got it. Okay. Got it. I was curious if there was any kind of underlying, like when I launched a game studio and people robbed me of a thousand keys, and so now I'm on this mission to rectify this problem. But it sounds like for you it's just like.

Vadim: Yeah, when I, when I was a kid, I used the pirate expression of a game. So is everyone used this because just, just didn't have an option. You didn't know how to buy the rule game, so there was emotional pirate games.

Alexandra: Yeah, absolutely. Yeah, and it's really interesting. I think a lot of markets like Poland and even like the origins of CD Projekt is mostly in pirating and like porting games over to a, to let a market access them in the first place. And so, I think what we're talking about today is a lot of publishers have, and, and in studios have tried to make their games more accessible to regions that typically weren't able to access them through a variety of storefronts.

But that in itself is also creating another problem around the gray market of which of course we'll talk about today. But before we start talking about the nuts and bolts of Rokky and the current PC gray market, I kind of wanna understand a little bit more where it comes from what can you kind of tell me about the retail PC gaming market from like the eighties and the nineties, and sort of like how has that evolved into the digital gray market versus the retail game market, and what makes it kind of a better or worse business to be in?

Vadim: Yeah. So, if you go back to 90s or early to 2000s, so PC games like were almost entirely physical products. They were sold on CD ROMs before that, on floppy disk, but it just skip it. So, C drums and the piy was basically everywhere. As I said, when I was a kid, I could not buy like legit copy of the game.

So, I could only buy the pirate version of the game, and I didn't care, honestly. So, in that time, but anyway, so these boardings, copied cd, second-hand resale, so that was really common that time. And I guess to find this publishers decided to create some kind of unique activation codes, which were printed on the back of the manual, of the game, of the, of the, of the box. And you have, you had to type it in when you install the game and start playing. So, the fun fact is we still use activation codes. After 30 years. After 30 years. So, we see these activation codes and we still sell activation codes. So that time, when internet developed, more and more people started to use online websites and they realized that there was a chance to get some money, get some revenue, they could, open by lots of boxes, open those boxes take a picture of the code, resell. Just the code, just the picture. Sometimes even they didn't type the code, so they just, sometimes they just try to resell the photo of the code, not the exact code. And, of course, so that's, that's I think where the gray market started, like in digital. And the other issue was when, so the biggest issue was when someone could buy this, this box in Brazil and resell in, in Germany or in the US. So, in this case, publisher just lose money and, all of those money comes to another pocket. So, that was an issue.

Alexandra: Okay. Interesting. Yeah, I mean, I think that there's a, you know, I think what you're calling back to is like, hey, even though this was a retail market, it wasn't like, you know, we've, we graduated from the CD ROMs and the floppy disks pretty quickly, and we were still doing codes.

And so like, you know, I think that there's a level of the digital of the gray market that has to do with physical manufactured goods. And we'll talk a little bit about like, um, I know there's been some legal cases that have, Supreme Court cases about once, uh, a manufacturer sells something they kind of lose control over its resale.

But that which will be, we'll get to in a second, but I think it's a really interesting point to say that like, hey, there were still codes. They just happen to be printed on physical boxes and people just taking photos of them and selling that. And so for the publisher or the developer, do you think that now that we're very much in this digi, this digital gray market, that's not a physical codes printed on a thing, do you think that's an easier beast to deal with or a harder beast to deal with when it comes to the developer or the publisher side in terms of trying to regulate that? Like has it, has the problem gotten harder for people to talent take, take on now versus then?

Vadim: It's easier, so, okay, so right now everything's digital, so when, if, classic retail, physical retail. So how to resell the box from one region to another region. So, you had to deliver it to from one region to another region.

With the digital space, of course, it's easier so you can just buy the game and resell it. So, of course it's easier and the, and the problem is bigger than it was before, but I guess it's easier to handle it because all of those calls can be, can resell through technical solutions. And there are lots of technical companies like Rokky, like others who have technical APIs, who have technical solutions, dashboards, et cetera. So, and we can control it. So, we just need to show the publishers how to control it.

Alexandra: Okay. Yeah, I think what, I guess the que the, the root of the question was it's obviously easier for the gray market actors to sell digital than it was retail, 'cause they're literally not moving around physical goods. But you're also saying that it's easier for developers and studios to federate and regulate digital products than it was to regulate physical goods.

So, although the problem has gotten bigger, the solutions have gotten easier in, in some, in some regard, is sort of what you're saying. And actually, you know, when we, we kicked off, you know, I mentioned Green Man Gaming Group, , and you had said that they're not really gray market. And I actually had a question about this here 'cause I think even myself might not really understand like what's, I mean, what's gray, right? Obviously. But there are some that are very, like legit. They, they pursue partnerships with gaming companies. Like a company like Humble Bundle kind of had its roots in some sort of bundling arbitrage, but now they're like a very much formalized partnership to the game industry, especially for indie and AA titles. So, what are some of the big alternative distribution sellers, and for you what delineates like gray from something like a Humble Bundle or maybe a Green Man Gaming, which is obviously key resellers, versus gray market sellers?

Vadim: Yeah, so you, you mentioned that lots of people in the industry, they consider the alternative distribution like gray markets reselling market, but actually it's not. And so, that's a big mistake for the industry and I would say, so usually industry consider like there is an authorized alternative distribution, like agreement gaming is an authorized place to distribute games, and unauthorized, uh, distribution spaces.

But honestly, I, I believe there's another, another line. So, first of all, okay, we need to understand that the gray market, that's not a specific place, and that's a concept, that's economic behavior. So, and if you, if you face this concept, if you face these issues and if you, if you tackle them so you can fix those gaps.

So, you can fix those problems, and you can work everywhere, especially like on marketplaces like G two A, and everyone in this industry, in the industry, almost everyone in the industry, they consider G two A as a gray market place. If you, if you fix those gaps, if you face those issues, if you fixed it, so G two A doesn't, so it wouldn't be like a gray market reseller.

So, that would be a place with the customers who will buy your game, who will get you revenue. So, I would say we need to understand that the gray market is my, my point is the gray market is not the exact place. That's a concept. Concept, and we need to change the concept.

Alexandra: Okay, so I am going to push a little here, 'cause I think I'm having a hard time kind of understanding what the, because, you know, I guess it's a concept. And the concept is I buy, I buy, I buy low, I sell high, and I'm not supposed to do that, and I'm doing it in unauthorized manner. Right? But in order to build an actual business around that, you have to be a place to some extent. Or like if you wanted to do it at scale, right?

I could totally do this, right? I could go, go on a trip to Sao Pao for break and buy some steam keys there, and then sell them again. And obviously I do that as a one single consumer can't do that at scale. Right. And so, you know, you mentioned that some of these people are authorized, but aren't they also still doing the same thing? Aren't they selling, aren't they buying game keys from low price regions and selling them to premium customers that just happens to be authorized to do so, and so is that not still the same impact for the developer in the studio, which is we're losing. You're, you're, you're, you're basically like, we sold the, we had these keys, and then you are taking a, you're taking a cut in the middle. That theoretically should have gone to me if the, if the unit was sold in the premier market.

Vadim: I mean, if you just close the, the G three, for example, if you just close the website like G three. So, what will happen next? So, people will resell those codes on telegram. Or they'll sell those codes anywhere else, like in Instagram, everywhere.

So, if you, so let's go back to retail market and let's take a look at the iPhone price. So, the iPhone price in the U.S. is 1099, and in the UK it's 1099. Almost the same price, but in the US it's 1099 US dollars in the UK is 1099 GBP, which means 20% is difference. So, there will be actors who will go to the U.S., buy lots of iPhones in the U.S. and resell in the gray, in Britain.

So, that's how it works. So, you need to work, not you need to, work, not with the gray market, reseller places. You need to work with the concept, how to prevent this.

Alexandra: Sure. Okay. That makes sense. Yeah. Okay. And I think like, you know, but another question that I might push back on and then we'll go into kind of like, and of course I'm having this, this, this, this conversation more for the sake of understanding sort of the concept and, and what the issue is.

And, and then we'll kind of go into how big the problem is today actually in terms of like revenue numbers, but. What would you say to someone who said something like, well, it doesn't really matter who the first key was bought by. It was still bought, the company put it on sale or in a region, so technically they wanted to sell at that price anyway.

In a case in 1988, the Supreme Court Kmart versus Cartier established that once a manufacturer sells something, they lose control over. It’s resale. So, I guess my argument might be is that sure, it's the gray market, but theoretically you had a bunch of units that you were supposed to sell at 19,99 in Brazil, and someone bought them from 19.99 in Brazil and then they just, and so sort of what's your, I know where, I know what my counter to that would be, but I'm curious to what your counter will be.

Vadim: If we talk about the size of the problem, so, when we, when we work with this, like leakages in the PC gaming market, we find out that about 20% of margin from 20%, 20 to 40% of margin or revenue of publishers comes outside of, comes to resellers, comes to great resellers. So that's because of like if you, let's make an example. If you buy the game, like in Brazil for $10, which costs like $25 in, in Europe. So, that's the, the difference about 60%.

But in fact, your margin is, is, is lower. So, in fact, publisher lose about 25% to 35% of their margin. So, but that's significant amount of revenue when it comes to the whole distribution picture, to the whole distribution revenue of the publisher. So, I would say the size is about 25% of their digital revenue.

Alexandra: Okay. So that was the size. But I think what I wanted to say was more of like the argument, right, which was about like when you're, your manufacturer and you sell something, you lose control over, it’s resale. And so theoretically, right, a lot of these publishers they gave, they, they launched the game, 100 game keys, 50 of those game keys were given to Brazil.

What is the issue with those 50 game keys? Who doesn't, why does it matter who they were bought by and why they're being resold? And I think, like, I have an argument for why this is, why this is negatively impactful to the publisher, but I guess in your words, why do you think that that's an, why do you think that's an issue that's worth solving?

Since they had already said, Hey, we wanna sell these game keys at a lower price.

Vadim: Sometimes, people just don't realize the, the real size of how many keys could be resold. Of course, if you are going to sell 500 keys and only 15 keys will be resoold to another region, so that's not a big issue.

But sometimes, if you cannot control it, sometimes that could be 80% of your sales. Or 90% of your sales. So, because, and you do not know about this, so how do you know this? So, steeper still doesn't provide you any statistics. So, he'll provide you like statistics in general, how many keys were activated there in that region. That's it. So, and you don't know the exact numbers. And sometimes, sometimes, almost 8% or 9%, of games sold in Europe could be like, could be from Brazil. So that's, that's a problem. And, honestly, so if, if the sale is a sale for you, it's okay, but you need to control it. If you control it, if you understand what's going on, so then you can work with that.

Alexandra: Yeah. And I think my answer to this would be, it's not about the keys in the low price region, it's about the customer in the other region. You basically cannibalized from them, right? So, the loss comes from assuming that the Brazil keys were basically sold to people that would have bought your game at $60 in London.

And I think like that's the kind of argument that would say back to that because it's a cannibalization problem. So net cross units are the same, perhaps, but the price that they were sold at might be lower, which obviously affects your margin. And so, I think it was just an interesting question, and I kind of debate about where you lose control over something at resale and or how, and at least for you, it sounds like you need to know that it's happening and you need to pursue strategies to, to kind of ameliorate it.

Let's talk about how big the problem is today, and you talked about this 25% of margin for developers and publishers, and it sounds like there are two main vulnerabilities and I would love to talk through what those main vulnerabilities are. And the first is one that we've heavily discussed. This is recent regional pricing arbitrage.

Publishers generate worldwide keys in low regions and then sell them in higher regions. And you call that the revenue leakage. And the second one is also promotional stockpiling. So, resellers buy thousands of keys during the sales promotions and then they resale them at the higher prices when the promotions end.

I have some questions kind of about like, who is the most afflicted by this problem, you know, of that revenue. Is there a, that you said 25%. Is there a pattern console, PC genre size, a developer that makes one more exposed. I would presume it's just the success of the title increases the magnitude of the problem.

But I'm curious on those two vulnerabilities, who is the one, who are the, who are the players in the space that are the most impacted by this?

Vadim: Everyone and the big, the publisher, the, the bigger the problem and, yeah, so it doesn't matter which genre or game or, okay. Every PC game, it should be released if it's not properly controlled so that could be, there would be an issue. So, I would say the problem is really massive. It's really massive. And you, you mentioned two, two issues, main issues. Regional arbitrage and promotion stockpiling. So that's our main issues of the market and so you need to work with that. So, yeah. So, you totally, yeah, and I got your point and yeah, you are totally right. So that's two main issues, which need to be fixed.

Alexandra: Okay. And before we go to talk about Rokky and some of the strategic solutions that you guys do to help some of these, again, like you said, the bigger the publisher magnifies the problem. What are some of the current solutions that publishers have implemented themselves? Like, um, regional locking or abandoning regional pricing altogether. And how have you seen that faring so far? This is kind of absent of any of the Rokky solutions. What are publishers doing, because I'm sure they've kind of also figured it out and are trying to do something on their own. What are they doing?

Vadim: Yeah. For now, publishers, many publishers, they are doing regional locking and that's a great solution. We always recommend we start working with publishers. When we start working with publishers, we recommend them to regional lock keys. Sometimes they do mistakes in regional locking and add some, some currencies into another, into another batch of keys. But anyway, so regional lock, that's the first step. You have to start with the regional lock. There are lots of publishers, publishers, and especially inter developers who just not familiar with the digital distribution. They don't understand that they need to do that, and they just resell worldwide keys, uh, all over the world in the cheapest regions.

And then they are asking themselves like what's, what's going on with the price of the market? Why is it like $1 instead of $15? So, yeah, why is it so diluted?

Alexandra: So, yeah.

Vadim: Yeah. So, the first step, that's the regional lock-in. And when we work with publishers, we usually recommend them how to, how to properly regional lock the key, and then recommend them how to set the price.

Alexandra: Okay. And are there, so again, this, but a publisher can do this on their own, right? They don't need Rokky to do the regional pricing necessarily. What is, are there any downsides of region locking? I, I could see there potentially being a, maybe a negative consumer impact, but is there, is it, is it like a foolproof solution or are there some dark sides of region locking?

Vadim: So, I would say, of course publishers can, can do that by themself, but they just don't understand why they don't, why they have to do that. Let's say some publishers, they add New Zealand into European Batch of Keys, but New Zealand will be cheaper than European keys. Okay? And, yeah, so in this case, we'll recommend the publisher just to remove New Zealand from the European batch of keys and put it into the Southeast Asian case, or just make the specific original lock for China, because Chinese keys are the cheapest one. And even if you include China into the Southeast Asia Pack, so all the keys in Southeast Asia Pack will be sold in China, but actually not. So, of course, if publishers does this, this is great, this is really great, but sometimes we need to advise publishers on how to properly do that and after, after they’ve locked the key. So, which price recommendations do they use? In most cases, publisher, publisher uses the price recommendation of Steam.

Alexandra: Yeah, yeah. And there's some big deltas there. Yeah.

Vadim: Yes. And Steam doesn't update taxes and currency exchange rates regularly all over regions. And, so that's why our tool like price recommendation tool exists because we all the time, we check taxes, we check currency exchange rates, et cetera. And we do recommendations for the publishing, how to slightly increase the price for some specific region to avoid the gray market.

And you don't need, so if you just like the, for Southeast Asia and remove China, you don't need to increase the price for South Pacific Korea like two times. So, it's enough. It's like three 5%. That will be enough.

Alexandra: Interesting. And we were definitely gonna get to that actually to talk about Valve’s price recommendation system. They, that they haven't really, they don't really get updated. Simon at Game Discover Co recently wrote a piece, ‘Does STEAM have its regional pricing recommendation right?’ which is highlighting a lot of the disparities between like the indie, there was like 10 indies and 10 AA titles selling games at regional price selections that Valve recommends. And many of the indie games who are just obviously, like they're not, don't have big business teams, they're just keeping the price recommendations set by Steam. But for AA and AAA, they varied quite a bit, notably in like China and Brazil.

And so, you know, we talked a little bit about, I was gonna ask you a little bit about why your price recommendations are different and better than Steam. And you mentioned a couple of things like that. Tax and currency, currency rates and exchange rates, for FX control. But kind of going back to like the main pipeline of the solution of regional, of regional locking, right, it sounds like you are saying that publishers can make mistakes by lumping regions that maybe don't belong together. Or removing regions that are like too dissimilar, like you said, South Asia, Southeast Asia and China and that in general. It's not really the practice of regional locking that's bad, but it might be you have to do it and execute in the right way.

And so maybe that kind of brings us to Rokky's strategy and solution. You know, I was looking at your website. You have variety of services that you offer publishers. In summary, I see key management systems, which obviously probably tracks the redeemed keys, the out in the wild keys, the revoked keys, a price recommendation system, which we, we talked about already. A promotional optimization system, which is also exciting, and China distribution, which I don't think that we'll have time for in this episode, but that's definitely a really cool, um, a really cool thing on its own. But before we kind of get into any of those details and things like that, what of those different services did you actually start with and what do you most of your clients come to Rokky for when you begin?

Vadim: So first of all, we are a company who provides revenue to the publisher. So, we don't only work with like how to protect from the dairy market. So, we provide the revenue and we provide like, as, as you've seen on our website, the Chinese distribution gateway. So, which means we provide an access to the Chinese market, which is the fastest growing market.

And of course we asked for the regional lock Chinese keys. Yes. But when it comes to, to Rokky and what we do, so first of all, we have the technical solution. So, the technical solution, which is API with our partners. When we track the IP address of the customer, we track the ID on the customer, and we do not allow the customer from Germany to buy the game from Brazil, let's say.

And we also do not allow the customer to buy a batch of keys, like 10, 10 keys or 100 keys or 1000 keys from one IP address and is why one ID or one email. So that's what we have in place with our partner, but then we also have the key management system and the dashboard for the publisher where the publisher can track the keys on all stages of the distribution. Where did the key came from? Where, who, who is the seller or who's the customer? Where is the customer? All of the data, all of the reports online. So, the, the publisher can track it. But that's the technical solution.

And I would say there are lots of companies who has this technical solution and, but this technical solution doesn't work without recommendations, right, and so that's why we introduce to the market our price recommendation system and promotion optimization system because of the technical solutions, there will be always, will be a guy who try to hire you.

So anyway, you need to, you need to find those gaps and close those gaps with your rules, with your ideas and use your recommendations. So as, as we spoke about the price recommendation system, so there's also the promotion optimization system, which helps to avoid like promo stockpiling of keys.

So, yeah, so this, this system helps to do that. It's, it's more tricky to work with that than the price recommendation system because that's not so easy to understand how it works and why it'll work. So that's why we sometimes we make some kind of pilot projects with publishers to prove them that it works, but then it really helps to prevent this.

Alexandra: Okay. Yeah, I, I had some, I think that, you know, we've kind of, on regional key management, we've talked a little bit about like what we can do there, right? Prevent cross-border keys, strategic pricing, you know, make sure you're actually taking in all the conditions, market conditions, vat, taxes, et cetera.

But on the promo optimization engine, I'm curious like what data does it draw from, and why is it optimized? And I think some of the suggestions that I was, you know, as we had talked before and I was reading on your website, would be something like, hey, we, instead of doing traditional promotions, like do consistent wholesale pricing, something like that, don't drop the game 50%, just like drop the game 25% consistently over certain periods of time.

And I'm curious because like for somewhere like Steam, where sales are such a big part of driving volume, right? Like 25% off of winter sale being in those sales, it's like a really big buying moment for, for most customers and they mostly buy games that are on sale. And if the game, and if they're, you know, if you're saying to a client like, Hey, don't participate in Steam winter sale at this deep of a price, but maybe you're discounting it somewhere else on another store, how do you guys kind of think through that, that problem, right?

Where you, you're eliminating maybe the arbitrage opportunity, but you're also potentially decreasing units and distribution because maybe you weren't participating in these really steep sails that Steam may run that are, you know, proven to kind of drive a game to the top of the, and, you know, talk me through that.

Vadim: Yeah. When we introduce this optimization system, so you, you are right. So, when the publisher runs the deep promotion on Steam, like 50% off for one week, so we are asking for 25%, but for three weeks. And why, so we understand that the publisher wants to get the most revenue from Steam, and Steam wants this too because Steam provides us with the activation keys and if Steam is not happy with that, so they'll not provide us with the keys.

So, we are fine when Steam runs the promotion with the deepest discount for one week. Then it's okay when the publisher provides us with keys with like 25 or 30% discount, but for three weeks. And in that case, customers who wanted to buy the game on Steam, he'll buy the game on Steam. But then after, when it's not a promotion time, so he'll go to like Gwe or UBA or anywhere else, and they, they can buy a game cheaper than the official price at the moment. So, from my perspective, when I, so I play PlayStation games most of the times, and if the game is not on the promotion and it start to release, I will wait for the promotion. Right? So, yeah. So, and lots of people will. So, in, in PC is almost the same. In charter, the same PC gamers, they, there's just more like they want to be, have bigger discounts than console players.

Alexandra: Yeah totally. Honestly, I say that honestly, the root of this entire problem is just us. You know? If we just, yeah, gave the game developer the appropriate price that they charged, all of this would be solved. Like. Yeah, I am, I'm that idiot that buys the game at 59.99 'cause I'm like, you know what? They deserve this. I'm gonna, I'm on the studio side. I know I want them to buy full price, but so I'm, I'm like the person that bought like Split Fiction at 59.99 and then like the next day it went on sale and I was like, god dammit.

Vadim: Oh yeah. Going on.

Alexandra: But continue, sorry.

Vadim: Yeah. So, and , we understand that puncture will anyway, anyway. So there'll be a reseller who will resell the game cheaper and they'll get lots of keys during the promotion and then resell them outside of Steam. So, they’ve already lost their revenue.

We just want to get it back. We understand that the game will be, the price will be lower than the publisher expects after the promotion ends. So, we just ask the publisher to decrease this promotion to get more revenue than they already then they receive before that, but for a longer period.

Alexandra: Okay. Interesting. All right, so that's at least like your ingoing price recommendation system, which is extending sale length period, but maybe not doing as steep of a sale. I think I just wanna ask, just sort of just a general question, I think 'cause a lot of game developers and studios are very concerned about this, and then we'll talk through, maybe, hopefully like a launch case study. I'd love to talk through a game that you maybe helped launch in 2025 that you can tell me about. But, why is protecting your price integrity so important?

Vadim: So, publishers are afraid of losing control and afraid of losing revenue when someone will buy a bulk of keys during the promotion, then resell it. Because this revenue comes not to publisher's pocket. It comes and not to resell a pocket because usually the resellers just adds $1 margin and that's it. So, that's a discount for the customer. So, and when we, when we asked the publisher to decrease the discount, so we ask the publisher to increase their revenue. So, I would say it's not easy to believe in that because many, many of our publishers, they just think that if we do that, so we'll just devalue the game. And the game will be like, not 49.99, it would be 34.99 for the whole time, but actually, it's already 20.99 on the market.

And with this solution, we asked the publisher not to decrease the value of the game, but decrease the discount and increase the margin and the revenue.

Alexandra: Okay. All right. I think we could go in a long debate on impact from demand on units, but we, we, we will, we'll move on to the case study, and then we'll talk a little bit about your business model yourself.

But, um, I'd love to have you tell me about a game that you helped launch in 2025 and you know, what you can tell me about it when it came to deploying and actually executing some of these techniques that you said, price optimization. Proactive market monitoring, et cetera.

Vadim: So in 24 or 25 did have an example of our case study and I cannot mention the game because like that's under NDA, but anyway, so the official price of the game on Steam was 24.99. But the real actual price on the market outside of Steam was. 8.69, like three times cheaper than it has to be on Steam. So that's a disaster.

So that's a disaster. And so this devalues the game and et cetera. So, what we did, so we advise the publisher to properly reach, love the game, to remove New Zealand from the European batch to little bit increase the price, increase the price for some particular region, and as the outcome and the outcome, the price, the market price came to the 12, 12 and something. So, which means the publishers started to get more revenue for like 25% more revenue just because of like small, small decisions. And we could not fight the whole like, the market was full of cheap keys already, which could be sold for 8, 8.69. But what we did with our solution, with our devices, the price increased to 12, 12 and the health as I remember, and so that's plus 25% of margin from the whole distribution market, from the whole distribution space.

Alexandra: Okay, I see. So, this was a, a game, our game studio that had already launched the game. And so, you were kind of like a, a little bit of like the cleanup crew where you came in, you were like, oh my goodness, like $8.

That's crazy. On Steam is listed at 24.99, you know, like you're looking at your books, your bank accounts, gross revenues coming in, you're dividing it by units somehow. That's mapping out to $8. That's crazy.

Vadim: Yeah, by the way, when we talk about this, when we talk about the prices and when we talk about 24.99 and 8.69, so we need to understand that after, so publisher doesn't receive the whole 24.99 from Steam. Totally. Yeah. So, they, yes, they receive its net revenue. Yeah. So, the VAT, the VAT is about 20% in the world. And then Steam charge you from 80& to 70%, which means after VAT, uh, the publisher gets not 24, they gets like, yeah, they get like maybe 13.

And, yeah. So, if, if we increase the price on the market from eight to almost 13, which means the publisher will get almost the same revenue as he gets from Steam.

Alexandra: Yeah. That makes, and that totally makes sense. I mean, there's, there's just, at the blend, blended ASP gross level and the blended ASP net revenue, there's a bunch of different things and it's very variable by market, for sure.

Right. I think obviously in Europe you have VAT tax in the US you don't, and bunch of other, bunch of other problems there. But, so in this situation, you were working with a client before, after they had already launched the game? Are there any game launches maybe in 2026 then, and clients that you might be working with that are about to launch and how are you helping them with, and how are you doing business with them?

I think one of the questions that I have is also like, how many launches have you done? And sort of like, what is your business model in all of this?

Vadim: So, yeah, so every, every title, which is, which will be released this year through us, we, for every title we'll provide our devices how to regional keys and how to set the price.

And in most cases, publisher listen to our advices and increase prices. We don't share like a lot about this because that's very often it's under NDA and we cannot share this, but in most cases we ask publishers to properly regional keys and sometimes increase the price or the release. So, the, the, the main point here is we cannot do this after.

The game already announced the price points for all of the regions, because if it's already in place, so we cannot increase the price for some region, or we can just like region make a regional lock and that's it. So that's why we, the beginning of the year, we make a list of all the games and ask the publishers about the price points before that, before they announced them and ask the publisher to reach, to make a region lock and to increase the price for some particular regions.

Alexandra: Okay. Got it. And. How, why, you know, like why would a publisher not just, you know, you, we, we talked a little bit about, you have some, you have technology that helps you do this and a key management system, et cetera.

But, um, what is your business model with the publisher, I guess is like, you know, they come to you for advice. They're like, help us with, address this gray market problem. What does that look like? Like, are you, is it an upfront fixed fee? Are they, how are you partnering with the publishers in the sense that you are building an awesome business on top of all of this?

Vadim: It depends. It depends on the publisher and it depends on their business model. So, we usually do not try to break the business model if the publisher wants to work on the upfront payments. So, we will work on the upfront payment with the publisher if the publisher works with the medium currency. So, we'll work on the minimum currency with the publisher, if the publisher works on the revenue share.

So, we will work on the revenue share model so we understand that. So, if it, just like break the business model, the current business model will not succeed. So, they don't have enough resources to support different business models if the publisher already has chosen like business model with upfront payments.

So okay, we accept that. But in general, in general, most of the publishers, they just provide us with a revenue share.

Alexandra: I see. Okay, got it. I was about to say, so they, they don't have the, the flexibility to flex their business model. So, you're on the other side flexing your business model. Yes. So, I bet that's rather, that's rather complicated on, I mean, I'm sure that your, your Biz Ops teams or your, your finance team is, you know, what were these guys on our deal with us in the first place? Were they the ones that were paying us fixed or are they the ones that were doing rev share off of? Okay, so that's really, that's actually really interesting actually, that you kind of have this very conformist, you know, let's figure out whatever works best for you. And we're happy to do some combination of variable or fixed pricing or revenue share regardless, dependent on the publisher. And I think one of the things that I wanted to, before we kind of go into some of our conclusionary steps is, you also, you know, Rokky, you, as you said, is a key management system, and so they're tracking sort of like what keys were sold, who was the seller, et cetera.

But Rokky itself does not sell the keys. Right? You kind of load the keys into Rokky and then other sellers tap into those. So just walk me through kind of like, are you in the middleware solution, just to make sure that for the audience it's not confusing that you are the storefront itself.

Vadim: So, we have, we have stores on our side.

So, we have two B2C websites. And one in China and one is the worldwide. And, okay. But our main business is B2B. So, our main business is working with retailers. And every time when we start working with the publisher, we send the list of retailers to the publisher to approve or disapprove it, because that's important for them to control.

So, if they don't want to work with someone. Okay. So that, that's fine. So just don't work with them. And, so yeah, so we do not sell like lots of keys from our own websites maybe. Right, right, right. 5%. But, in most cases we work with B2B clients with B2B retailers and we send the list of approved retailers to the publisher, right?

Alexandra: So, I'm the publisher, right? And I'm like, Hey, I wanna sell through, one store in Korea. I wanna sell through that, the China store that you guys have. I wanna sell through Steam. I wanna sell through these, these three other groups. And you say, okay, sounds good. Then I, as the publisher give you the keys and then you give the keys to those sellers.

Vadim: Now we upload all the keys on our side. So, and the seller, the retail has an API integration with US and yes, and when the customer wants to buy the game, so they send us the request to send me the key. We check the IP address, we check the id of the client, et cetera, and we send the key to the customer.

Alexandra: Got it. Okay. Interesting. All right, so basically the customer is still having the same shopping experience they would have if they were, you know, I, I'm just on Steam myself, but you kind of know these specific keys. If I'm trying to redeem key with a specific hash that runs through the Rokky API system and then checks a bunch of stuff and then releases the key to Steam.

Yes. Got it. Yes. Alright. And so, this way, like if I were that bad actor that was trying to go buy a key in Brazil, you would know that, that I can't, that I'm not allowed to do that.

Vadim: Technically, technically we have, solutions to prevent this, but as I said, so every time there will be a person who will try to hack you and who will try to find the gap. So, we need to fill the gap with the advices just to prevent this, just to make this pointless.

Alexandra: And how many retail or digital distributors is Rokky currently? Like how many APIs do you have for all the different digital distributors of which I'm sure there's a plethora.

Vadim: So I mean, we have like 150 retailers, I guess. Who uses who, who use our API and um, yeah.

Alexandra: That's quite a number. Yeah, I mean, I think that's another thing that's, so they're.

Vadim: Not this, they're not digital distributors. They're digital retailers. So, the digital stores.

Alexandra: Digital stores, yeah. Okay. Yeah, that makes sense. Yeah, and I think it's an interesting thing.

I think for, you know, one of the biggest challenges in games today is just the distribution landscape. And you know, there's a variety. You know, Steam is obviously the juggernaut of where most PC buying takes place, but you know, there's a lot of opportunity to disrupt that. That ecosystem given different storefronts or digital retailers where you might just get the key and then redeem it on Steam or something like that.

And so, there's kind of like all of that, that flow of like, I can redeem keys, I can buy a key from a website. Take that key and put into Steam. I get the game, but I didn't buy it from Steam. And I think that's a really interesting landscape and strategy. And it's also very, you know, region specific as there's multiple different storefronts that are just, you know, country based to some extent.

And so, 150 people is certainly a lot of, a lot of 'em storefronts are, and retail sellers to manage. And, yeah, I'm sure that's also fairly complicated on, on your side. And we probably could talk about that forever. But, we're coming up on the, the end of our episode here and I kind of wanted to ask kind of a conclusionary question that's more in the line of, of distribution in general, like, I think Valve for a lot of people is the, is the elephant in the room, and so many of the issues stem from developers and their dependency on Valve for the majority of their income and distribution strategy, that as well as discoverability. And so, you did this like 300 plus studio study with PC game developers that helped identify, you know, this problem really astutely, you know, 75% of studios said that 80% plus of their revenue or something like that is coming from Steam and I guess what, what do you do and like, do you think, what do you think should be done about Valve? And do you think that Valve makes like the PC gray market worse?

Vadim: I think that Valve make great contribution to the market. They changed the market significantly. So, they introduced their stimulation codes like in 2012, I guess, or 2011.

And they changed the market. They changed the market and they, they made so lots of publishers and lots of developers, they started to get revenue from their games because of Steam, and that's great. The, so that's, thanks. Thanks, Steam for that. So, absolutely. So just what we want to do is Steam, so we want to, we want Steam to introduce the silent key activation as, as we started this conversation today.

So, I told that defining fact is we still use activation codes, which were printed on the CD boxes like 30 years ago. So, we need, the market needs, the silent key activation system and Steam can introduce it and we can support this. And this will prevent lots of, lots of, great hacks, lots of great stuff.

And of course, there'll be a person who will try to cut this again. But anyway, so that will be another question. And for now, I, I believe we, so the market is ready, is ready to implement the silent key action system.

Alexandra: Okay. Interesting. All right. So, Steam, implement the silent key activation system.

Vadim: Yeah. And go, come to us. So, we could help you with that, so we can support you here as well.

Alexandra: Awesome. So look, look, but it's such a pleasure, and there's clearly a lot of opportunity and this is sending a really interesting space and as you said, like very misunderstood by a lot of publishers and developers.

If, if anybody in our show wants to get in touch with you, how can they do that?

Vadim: So, just email me like a, it's rokky.com or come to our website, rokky.com and there is a form for, for you, so just connect us. And don't be afraid of distribution. So, the distribution, that's a great space for revenue. So about you can get 20, 20% more revenue just using, just start using the distribution space.

Alexandra: I totally agree. I think that's, yep. It's really exciting. It's just, I think it's about discoverability and finding and matching the right buyers to the right stuff. But anyway, this was such a pleasure. As always, guys, if you have feedback or ideas, please hit me up at [email protected]. I am always open. And with that, we're out. That's, that's our episode for today and I'll see you guys next time. Thank you so much, Vadim, for coming on.

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