2012 CIDG raid of DataBlitz

A pro-DataBlitz, anti-X-Play Facebook page that was created after the raids.

On November 5, 2012, the Philippine National Police's Criminal Investigation and Detection Group (CIDG), acting on a complaint filed by Philippine video game distributor X-Play Online Games Inc., conducted raids on multiple DataBlitz establishments in Metro Manila due to the sale of unauthorized, gray market copies of NBA 2K13. At the time, X-Play had received the license from Take-Two Interactive, NBA 2K13's publisher, to distribute the game in the Philippines.

The event resulted in a public backlash against X-Play, which escalated when an initial report by GMA News misreported the cause of the raid as a piracy issue. It was later revealed that X-Play did not request for police raids but was instead merely seeking a fine for DataBlitz.

X-Play Online Games Inc. was a subsidiary of the live service publisher IP E-Game Ventures, Inc. It was established to handle casual live service titles by IP E-Game into the X-Play brand instead of the E-Games brand.

In February 2012, competing publisher Level Up! Inc. merged its live service gaming operations with IP E-Game. All games under the E-Games and X-Play brands were transferred into the Level Up! brand.

X-Play Online Games Inc., which lost its original purpose, shifted its operations to become a retail video game distributor. X-Play obtained exclusive licenses to distribute retail copies in the Philippines from publishers like Blizzard Entertainment and Take-Two Interactive.

DataBlitz is a chain of video game software and hardware retail stores in the Philippines. It sells non-counterfeit products sourced from other countries as parallel imports. At the time of the raid, its games were sourced from Singapore and Hong Kong.^[1]

In 2012, X-Play acquired the Philippine distribution rights to the game NBA 2K13 by Take-Two Interactive. X-Play was planning to launch the game in the Philippines in early October. The following timeline was given by X-Play to the press after the raid:^[2]

• Date: September 6, 2012
• Discussion points: X-Play will be the official distributor for NBA 2K13; X-Play wants Datablitz as a primary partner and requested Datablitz to advise on support requirements it would need for NBA 2K13.

• Date: September 13, 2012
• Attendees: Sandra Lu, Datablitz Purchasing Head Orpha Oambas, Datablitz Marketing and Events Manager
• Discussion points: Briefing on X-Play product portfolio; Briefing on marketing programs; Discussion of commercial terms and trade concerns.

• Date: September 27, 2012
• Attendees: Sandra Lu, Datablitz Purchasing Head Orpha Oambas, Datablitz Marketing, and Events Manager
• Discussion points: Discussion on NBA 2K13 trade programs, inclusive of all commercial terms; Briefing on NBA 2K13 marketing program.

• Date: September 28, 2012
• Discussion points: In-depth discussion on partnership agreement and concerns; Sealed partnership agreement via a handshake.

• Date: September 28, 2012
• Discussion points: Discussion on actual orders to be placed by Datablitz; Operational discussion involving purchase order releasing, delivery timeframe, and collateral distribution.

On October 2, 2012, NBA 2K13 was released. The retail launch prices of the game set by X-Play were ₱2,595 for the PlayStation 3, ₱2,495 for the Xbox 360, ₱1,895 for the PlayStation Portable, and ₱1,995 for Microsoft Windows.

X-Play discovered that DataBlitz was selling unauthorized copies of the game at lower prices, which prompted X-Play to file a complaint with the Makati Regional Trial Court.^[3] Sources from X-Play claimed that X-Play merely filed a complaint seeking a fine for DataBlitz and did not expect CIDG to conduct raids nor did X-Play intend for DataBlitz employees to get arrested.^[3] The complaint, however, prompted the courts to issue search warrants.^[4]

On October 31, 2012, eleven search warrants were issued against DataBlitz by the courts. DataBlitz was to be charged with violating Section 168 (Unfair Competition, Rights, Regulation and Remedies) of Republic Act 8293 (Intellectual Property Code of the Philippines).^[5]

On November 5, 2012, the CIDG conducted raids on eight^[1] DataBlitz establishments in Metro Manila, including those at SM Megamall, Market! Market!, Robinson's Galleria, Rockwell Power Plant, Greenbelt, Expo Exchange, Virra Mall Greenhills, and Robinson's Magnolia. The agency confiscated ₱2.65 million worth of video game titles. Confiscated games include NBA 2K13 by Take-Two Interactive among other undisclosed titles.^[5] 32 employees were arrested and 1,060 units of desktop computers and Sony Playstation Portable units were seized. 11 employees were charged with violation of the Intellectual Property Rights Act.^[1]

X-Play received a backlash after the initial news were reported. The public's negative sentiment escalated when GMA News misreported the issue claiming that DataBlitz had been selling pirated software.^[4] Part of the backlash was because DataBlitz's copies were sold at lower prices than the ones provided by X-Play. The public sided with DataBlitz as it was a long-standing business in contrast to X-Play which was merely a startup in retail video games.

X-Play issued a formal press release stating that X-Play "had no other intention but to protect their business, and to exercise their responsibility to their partners and the community they are in". It also included a timeline of events (See "Timeline prior to raid" above).^[2]

DataBlitz issued a public statement responding to X-Play's timeline, claiming that DataBlitz only participated in the meetings out of courtesy and that X-Play never discussed anything related to a primary partnership. DataBlitz claimed that X-Play did not indicate that they were the exclusive distributor of NBA 2K13 in the country. DataBlitz nevertheless purchased a considerable quantity of NBA 2K13 copies from X-Play despite the lack of any written agreements as a "gesture of goodwill". DataBlitz stated that it assumed 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, so long as these are legitimate, genuine, brand-new, original games...".^{[6][note 1]}

An X-Play source insisted that DataBlitz knew the latter was an exclusive distributor, stating that "[DataBlitz was] there every step in the way" in reference to the meetings.^[3]

1. Businesses and individuals should adhere to what the law says is legal, and not to what they think is legal.

1. Top video game dealers feud after police raided shops for smuggling. November 08, 2012 at 11:53 PM. Paolo G. Montecillo. INQUIRER.net. Retrieved on 2024-01-18.
2. XPLAY’s Official Statement regarding the raiding of Datablitz Stores for NBA2k13. November 6, 2012. Jayvee Fernandez. A Bugged Life. Retrieved on 2024-01-18.
3. X-Play had nothing to do with DataBlitz raid: sources. November 8, 2012 at 4:42 PM. ABS-CBN News. ABS-CBN News. Retrieved on 2024-01-18.
4. CIDG raids gaming store selling unauthorized software (updated). November 5, 2012 at 7:08 PM. GMA News reporter. GMA News under SciTech. Retrieved on 2024-01-18.
5. P2.65-M worth of unauthorized gaming software seized from DataBlitz stores. November 6, 2012 at 3:12 PM. J.M. Tuazon, InterAksyon.com. Interaksyon. Retrieved on 2024-01-18.
6. DataBlitz Facebook page post at November 7, 2012 at 1:02 PM. November 7, 2012 at 1:02 PM. DataBlitz team. DataBlitz Facebook page. Retrieved on 2024-01-18.