Saturday, May 14, 2011

The ugly truth of price inequity

Some readers might be aware of the gross inequities in computer game pricing across different countries. Coming from Australia, I've been used to paying around an extra 1/3 on top of US counterparts due to the relative value of the two currencies. However, over the past couple of years, that difference has disappeared, yet Australians are still forced to pay the same premium for their games.

The evolution of digital distribution should have surely solved these issues, as the distribution can be centralised and thus cost the same regardless of where the player is coming from. The market leader in this area (at least for the PC) would have to be Steam. The developer/publisher gets a great advantage here as they can just take advantage of Steam's existing network for limited additional cost. Yet even via Steam, there are vast difference between the price I pay in Australia and the price someone pays in the US. The fantastic website can quickly demonstrate some of the regional differences (both rip-offs and bargains) in Steam pricing.

Let's take a few examples:
Witcher 2 - Australia: $67.49, US: $44.99
Duke Nukem Forever - Australia: $71.99, US, $44.99
Brink - Australia: $89.99, US: $59.99
Crysis 2 - Australia: $69.99, US: $49.99
Call of Duty: Black Ops - Australia: $89.99, US: $59.99
Let's keep in mind that as of writing, the current exchange rate is $1 Aus = $1.0655 US.

High prices? Take it, baby.

This is a digital distribution medium, so there shouldn't be a significant difference in price. The differences here are largely made by publishers to appease distributors who send out boxed copies of the game. Steam/Valve is not the one who sets the prices for individual regions - they're just taking their cues from the company that gave it to them. These boxed copies obviously present additional costs to the supplier and the retailers, and then you've got the mark up from retailers themselves to pay for store space, staff wages, etc. Obviously we'd expect those prices to go up a little from a digital distribution.

Well, let's consider actual boxed games here as well, as they are priced direct from a retail stores. While I was recently in Singapore, I did a quick scout of a few games, so I could do a comparison of prices of boxed PC games. I'll give a range for the PC games here, as I've seen multiple prices across different retailers. By comparison the few stores in Singapore I was were fairly constant.
Dragon Age 2 - Australia: $69-79, Singapore: $55
Crysis 2 - Australia: $79-98, Singapore: $52
Call of Duty: Black Ops - Australia $89-100, Singapore: $45

The exchange rate in this case is $1 Aus = $1.3204 Singapore. Also note that Singapore is very harsh on software pirating, and hence all these are legitimate copies of the software, unlike some other countries you might visit in the Southeast Asia region.
The first thing to note is that Singaporeans are actually getting a darn good deal here. Given how immensely cheap it is to buy games there, and that it's a relatively short hop from Singapore to Australia, why is their such an exorbitant mark up on so many games here in Australia? The short answer to that question is "because the sellers can get away with it." People still buy games are their over-inflated prices, because people were willing to pay those prices when the exchange rate was far less favourable.

The main problem is that there is very little that the Australian consumer can do to combat this situation. If we choose to save money by purchasing from overseas retailers and having them send a copy of game (which even including shipping costs is quite frequently cheaper), then local distributors/retailers sell less copies and thus must make more of each individual copy in order to make a profit. Distributors may not realise the quantity of sales they're losing from this avenue (or are still making enough that they don't care) and as such don't drop their price. There's also the issue of region locking if you're dealing with XBox360 games. (Of course, I could complain that region locking is a barbaric and outdated practice that needs to be completely expunged, but that's another issue)

Even worse is that many of these games are upped in price as they approach (or reach) their release date. Witcher 2 and Brink are two recent examples that had massive price jumps for Australian customers. This means that if you're in Australia, you're likely to pay significantly more for a game unless you pre-order the game. If you want to pay an equitable price compared to your overseas counterparts, you have to make the leap and purchase before you've read any reviews of the completed product. I should note here that the developers/publishers of The Witcher 2 are trying to do the right thing by Australian customers, and are offereing credit at their online store to offset the increased price of the game. I applaud this move, but they shouldn't be forced to have to do this in the first place!

Witcher 2: Special Price Gouging Edition

Players can benefit from cheaper (and fairer) prices if they're willing to wait or order from overseas, but this doesn't really do anything active to stop the issue from occurring in the first place. Why should gamers pay such significantly different prices for exactly the same product?

More importantly, how can gamers from all countries make their voice heard to raise the issue of game pricing and strive to make everyone pay an equitable amount? It's about time that this kind of behaviour stopped. It's about time that companies stopped gouging players with exorbitant prices. I would be happy to walk into and support my local store if I wasn't paying a $30-50 premium for that privilege.

I love games and I love game companies, and I likely to treat them fairly by buying their games and giving them respect (or derision) based on their individual merits. I'm asking publishers to treat their customers with the same respect. To this end, I have one simple request: Don't rip us off.


  1. GoG also took the step of disabling the IP based location services on their webstore so that anyone can download any edition of it (and thus avoid censorship issues). GoG is at least being proactive in countering the negative sides of the distribution agreements that everyone is still forced into by the publishers.

  2. This is my favourite blog post because goddamn this practice annoys me. I just pre-purchased Deus Ex Human Revolution from Steam out of sheer paranoia that the price will double closer to release date.

  3. Australia used to be a captive market for these thieves, but with Internet retailers and cheap international shipping this is no longer the case.
    Borders and Angus & Robertson went down with the help of Book Depository... GAME & EB have had to change their model to make most of their profit from used games anyway.
    Imports all the way! Or if it's a direct download, there are some reliable US citizens who help out with gifting steam games at cost price, or else a VPN/US credit card setup can also work.

  4. A friend just pointed me to this. It's a nice page.