Top video game dealers feud after police raided shops for smuggling

A feud has broken out between the country’s largest video game retailer and the leading local video game publisher over the alleged illegal importation and sale of popular National Basketball Association-branded titles to local consumers.

The Philippine National Police’s Criminal Investigation and Detection Group (CIDG) on Monday raided several branches of game software retailer Datablitz Inc. for the alleged illegal sale of copies of NBA 2K13, a basketball video game created by New York-based Take-Two Interactive.

The raid stemmed from a complaint by X-Play Inc., a part of the IPVG Group of companies, which accused Datablitz of selling copies of the game that were not bought from X-Play, the game’s exclusive distributor.

The complaint filed with the CIDG alleged that the sale of NBA 2K13 games not sourced from X-Play amounted to unfair business practices and violated local intellectual property laws.

“The action of Datablitz was not only detrimental to X-Play but also affected other smaller retailers, game stores and entrepreneurs. We hope nothing more but to resolve this predicament but will hold firm in protecting the industry from unauthorized and illegal operators,” X-Play said in a statement Thursday.

X-Play said P2.6 million worth of unauthorized and illegal software products were confiscated by CIDG operatives from eight Datablitz branches during the Monday raid.

X-Play officials said Datablitz had previously agreed to buy all of its NBA 2K13 games from the former. X-Play said Datablitz, together with other subdistributors, also agreed to sell copies of the game at a certain suggested market price. Datablitz later sold its copies for much lower.

In a statement, Datablitz countered that X-Play had never shown any proof that it had exclusive rights over the NBA 2K13 title. “It is the understanding of Datablitz that X-Play is just another reseller of the game, and as we still live in a free country the last time we checked. Datablitz reserves its right to buy stocks of the game from other sources, apart from X-Play.”

CIDG agents on Monday swooped down on several stores and a warehouse of Datablitz in Quezon City, Manila and Pasay City.

In a statement, CIDG chief Director Samuel Pagdilao Jr. said 32 employees were also arrested during the simultaneous raids. Seized were 1,060 units of desktop computers and Sony Playstation Portable.

Of those arrested, 11 were charged with violation of the Intellectual Property Rights Act. These were Datablitz employees Shannon Rosales, Glen Tena, Frederick Japsay, Billie Jay Cuadra, Arvin Lamanilao, Christopher Decierdo, Christian Dadula, Nico Villegas, Elvis Martin, Clint Fructuoso and John Badeo.

Senior Superintendent Gilbert Sosa, head of the CIDG’s Anti-Transnational and Cyber Crime Division, said Datablitz was not authorized to “distribute and sell the confiscated products,” which entered the country from Hong Kong and Singapore.