Why do video games cost what they do? Let me clarify: Most of the big games that come out cost around $60 in America–why is that? Does every big budget game really cost the same amount to make? If they don’t, why don’t the final prices reflect that? Even more so, in a society that values competition, why is there so little price competition in gaming? A couple games in particular really made me think about this price question lately, and so I did a little digging into the whole area of what we pay for games. Surprisingly enough, the price you pay for the exact same video game varies literally by 100% and more depending on which country you purchase it in (and that is factoring for different currency values). There are all kinds of theories about why this is, but getting a straight answer isn’t as straightforward as it should be.
One game that really has me pondering game pricing lately is Atlus’ Persona 4 Arena. Persona 4 Arena was recently confirmed as being the first region locked PS3 game, a major reason behind that being that it would be way cheaper for people to import it from, thus paying a lower price. Per Atlus’ statement to their fans, “we had a version of our biggest game of the year releasing within a couple weeks in two territories, both identical in content, but at radically different price points. Importing, as great as it is for gamers who otherwise can’t get access to a title, can also cannibalize the performance of a title in one territory to the benefit of another. While we’re all one big ATLUS family, the reality is that the dramatic difference between the Yen and the Dollar makes for a dramatic difference in price.” Too true, but if they can sell it at a lower price point in one country and still make a profit, why is there such a disparity in the prices? I mean, *maybe* they have some sort of economic plan that involves taking a loss in some markets and making it up in others, but I doubt it. Seems to me if they would be taking a loss to sell it for less in a certain country, most companies just wouldn’t release it in that market. Sooo….if they can make a profit for less over there, why not over here?
A lot of theories abound about this, but there is very little information anywhere that will give a straight answer to gamers who question why their favorite games cost what they do. While gamers in America might pay $60 for an average game, gamers in Australia will pay twice that much. Gamers in Finland or Portugal can expect to pay around $95. Gamers in Asia, though, often pay much, much less (and I’m not talking about the pirated stuff). There are a lot of theories as to why it the prices are so different. Taxes surely play a role, say many – as do import/export fees and distribution costs. But none of that adds up to amounts that would account for such large disparities.
There is one theory that isn’t mentioned enough in this debate: are gamers just used to paying more? It’s a good question, and what we should really stop and think about. Are we paying more than we should be for games, simply because we’ve always paid that? As gamers who habitually pay far more than their peers overseas, Australians are beginning to ask that very question. The Australian dollar is up, exchange rates are great – but Australians still pay far more for their video games, enough so that many simply choose to import rather than buy locally. Of course, if more games are released with region locks, even that option won’t be open to them. In a well-received move, Australia’s Parliament opened an inquiry as to why their citizens are paying such high prices. Says Ed Husic, a member of the committee pushing for inquiry, “When the Productivity Commission asked IT companies why they charge so much for downloads, even they found the answers were not persuasive.” The Productivity Commission’s report noted that, particularly in cases of digital distribution where delivery to the consumer costs virtually the same worldwide, excuses about distribution costs or smaller markets really don’t hold water.*
So why do gamers around the world pay such different prices for the games we all love to play? In an increasingly global economy, can gamers expect to see a more level playing field as time goes on – and importing gets easier? Or will game companies bite back by doing more region locking? Share your thoughts in the comments below – we love a good debate!