Eb Games

Government report confirms that Australians are screwed on game pricing

Government report confirms that Australians are screwed on game pricing

The staff of Penny Arcade recently traveled to Melbourne for the first year of PAX Australia, and one of the more notable things we learned from the trip was the insane expense of games in the city, and we were told things were just as bad across the entirety of the country.

Packaged goods that need to be shipped are a little trickier, but why do games sold in Australia on services like Steam cost so much more than the same product in the United States?

The Australian House Standing Committee on Infrastructure and Communications itself recently released a report about this issue, although it focused on the cost of IT software, and found that… well, there is no good reason for the so-called “Australia” tax. The full text of the report, called “At what cost? IT pricing and the Australia tax,” can be read in its entirety online, but the sections dealing with the online sales of games are particularly interesting.

There is no good reason for the price hike

“The Committee notes that despite industry claims that costs exist for the creation and marketing of digitally distributed content, vendors have not produced any evidence to explain why differentials are so high for such content,” the report stated. “In relation to games, for example, the Committee has not received any evidence which explains why it is almost invariably cheaper for Australian gamers to purchase and ship physical media from the United Kingdom to Australia than it is to purchase a digital copy of the same game.”

That’s the interesting bit. Australians often pay as much as double the price for the same product, that is “delivered in the exact same manner” when there are no localization or distribution costs, or costs that are close to zero. In almost all cases there are few to no Australian servers for the games, so the extra money doesn’t go towards upkeep for the local online community.

Back in 2012, Green Man Gaming actually raised the price of certain games in Australia, after trying to sell the games at close to the same price they went for in the United States.

“We have had a number of enquiries about price increases on Borderlands 2 and XCOM Enemy Unknown in Australia and New Zealand. This was done at the request of the publisher based on local retailer feedback,” the company said in a statement. “We would rather not have had to do this but we really value the relationship with our publishing partner.”

In other words, the local retailers got used to those fat margins, pressured the publisher to pressure the digital retailer to raise prices, and Australian gamers lose once again. The digital retailer was fine selling the games at a fair price, but that upset the gravy train enjoyed by the physical stores.

Who showed up to defend pricing for video games? No one

“The Committee notes no representatives from the gaming industry chose to address this issue,” the report stated when talking about the price difference in digital games. Adobe, Apple, and Microsoft would only comment on their pricing when compelled via summons.

They also all gave different reasons for the difference in pricing, including a “bespoke” experience for Australians, or that customers could vote with their wallets and simply not buy the overpriced programs.

The price difference can be stunning: When looking at the price differences between games sold in the US vs. games sold in Australia through EB Games, a submitted report found that Australians paid 40 to 90 percent more per game when looking at 20 new releases.

The price difference online was, surprisingly, even higher. “Digitally distributed games showed even larger price differences. The Choice submission highlighted price differentials for games sold through ‘Steam’, a popular online-only games platform, and showed consistently higher prices in Australia compared to the US for substantially identical digitally delivered content,” the report stated. “The worst price differentials on Steam can be 200 to 300 per cent more expensive in Australia.”

While the report’s findings were damning, it’s likely that nothing will be done. There are some suggestions for how to lower the price of digital goods in Australia, but without any actual legislation it’s unlikely that companies will lower the price on their products voluntarily.

Here’s the surprising bit, Nick Champion, the committee’s chairman, actively told citizens to try to break through the geo-blocking that keeps citizens locked into local Australian prices for digital goods.

“What we want to do is make sure that consumers are aware of the extent to which geo-blocking applies to them and the extent to which they can lawfully evade them,” he stated. “That seems to be an area where I think, what is the consumer's right to shop around, in effect.”

Even the government seems to agree, Australians. You're getting screwed.