Australia Asks About High Game Prices

[Wicky_42]

A single currency for the globe would make life so much easier...

That just stuck out a bit - I guess you've not been following the news in Europe, but it turns out that single currencies can actually be quite problematic if governments aren't honest about their financial system and have vulnerable economies...

 

[ACman]

I may be wrong in this but: I thought that Australian businesses paid high import tariffs for games and gaming hardware. So, of course, selling the physical product is expensive. So why is the digital just as expensive? If they are selling physical versions of games while simultaneously selling digital versions of games, they can't have the price be different. So, it stands to reason (in so far as I am not wrong about my very first point) that in order to sell digital games for cheaper, they must also lower import tariffs on physical copies of games. Which means that games won't get cheaper since governments aren't going to deny themselves the money of a high tariff item. I also seem to recall some argument recently that it's because the price is in US Dollars and not localized like it is in other countries, but at the typing of this comment the exchange rate was 1:1.0284. So that excuse clearly doesn't fly anymore.

If I am wrong, then by all means, correct me.

Import tariff in Australia is generally about 5% but it is zero for software, electronics and video-games "of a kind to be used with a television receiver" (As distinct from arcade games and gambling machines.)

We also have a free trade agreement with the US thus anything from the US apart from alcohol tobacco and firearms has no tariff placed on it.

 

[FoolKiller]

I think Extra Credits came up with a good idea about this. They said in one of their videos, a mailbag episode, forget which one, that the most likely reason was that there was a time when the Dollar to the Australian Dollar was unfavourable, so the price of Australian games had to be put up, and when it reached a better climate, publishers noticed people were still buying games at inflated prices there, so they just rolled with it.

It's honestly a reason I can believe, even if it paints a really negative image on publishers.

But really, they should have equal prices to the rest of us. So should Britain, for that matter, so Activision, don't you dare have the audacity to raise the price for the next Call of Duty because you felt like it again. I will slap you Kotick, with a hard leather glove, and you will have a red cheek and your stockholders will laugh.

Calumon: And you'll look silly! >: (

Sorry, but that may have been the issue at one point, but it's not the whole story. It's actually the economics of the thing at this point.

1. The US dollar is almost identical in value to the Australian dollar
2. Australian minimum wage is $15.51. US average is around $7.25

Let's take Black Ops $60 in the US and $110 down under as an example.

$110 divided by $15.51 is approximately 7.1 hours of work to purchase.
(I'm not including sales taxes as those have nothing to do with this discussion)

$60 divided by $7.25 is nearly 8.3 hours of work to purchase.

So in effect, a game is actually more expensive in the US than it is in Australia.

I just hate to see the bad math that politicians take part in.

 

[Baresark]

I may be wrong in this but: I thought that Australian businesses paid high import tariffs for games and gaming hardware. So, of course, selling the physical product is expensive. So why is the digital just as expensive? If they are selling physical versions of games while simultaneously selling digital versions of games, they can't have the price be different. So, it stands to reason (in so far as I am not wrong about my very first point) that in order to sell digital games for cheaper, they must also lower import tariffs on physical copies of games. Which means that games won't get cheaper since governments aren't going to deny themselves the money of a high tariff item. I also seem to recall some argument recently that it's because the price is in US Dollars and not localized like it is in other countries, but at the typing of this comment the exchange rate was 1:1.0284. So that excuse clearly doesn't fly anymore.

If I am wrong, then by all means, correct me.

Import tariff in Australia is generally about 5% but it is zero for software, electronics and video-games "of a kind to be used with a television receiver" (As distinct from arcade games and gambling machines.)

We also have a free trade agreement with the US thus anything from the US apart from alcohol tobacco and firearms has no tariff placed on it.

I do stand corrected, thanks for the info. I would say it's about time companies stopped gouging our Australian gaming brothers and sisters then.

 

[Epona]

On behalf of my colleagues in Australia:

"It's about bloody time, ya wankers!"

There, did I say that right?

Yup.

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

But when a gov makes the minimal wage twice what 'others' pay out, then see products being sold for twice what 'others' pay for...

Er, uhm... Never mind. I've bitched the same song often enough.

EDIT: *smiles at the above post ; )

both of these

yes, everything might be expensive in australia, but so is it over here, gaming is no different from any other market. seriously, try surviving on 8$/hr while scrounging for solid hours at a job, it won't get you many video games after taxes and other bills kick in, i promise you that.

Thank you for saying that. I get so annoyed when they're like "YOU GET PAID MORE SO IT'S OK TAHT EVERYTHING IS MORE EXPENSIVE"

When you get paid less than double what I would if I had a minimal wage job, I would care. When products cost you more than double what they do here, I might care...

But you, and they, don't.

It's sad really. How can you explain feeling sorry for yourselves like this?

It's so annoying when people continue to ignore that.

Australia's minimum wage is $15.51 per hour, or ONE DAYS WORTH OF WORK AT MINIMUM WAGE FOR A BRAND NEW AAA VIDEO GAME!!!!

Bloddy wankers like to think it's different on the other side of the pond, well.... IT BLODDY WELL ISN"T!

It's about double the pay, and double the price for everything. STFU already, same boat doods.

This!

Min wage is TWICE as much as it is here and so Australians should be paying twice as much as we do here, they aren't so they should stop whining!

They say the cost of living is higher, well of course it is, that goes hand in hand with the min wage and that is why games are also higher.

I do hope their prices get lowered though, so they will finally STFU!

 

[Alleged_Alec]

On behalf of my colleagues in Australia:

"It's about bloody time, ya wankers!"

There, did I say that right?

Yup.

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

But when a gov makes the minimal wage twice what 'others' pay out, then see products being sold for twice what 'others' pay for...

Er, uhm... Never mind. I've bitched the same song often enough.

EDIT: *smiles at the above post ; )

both of these

yes, everything might be expensive in australia, but so is it over here, gaming is no different from any other market. seriously, try surviving on 8$/hr while scrounging for solid hours at a job, it won't get you many video games after taxes and other bills kick in, i promise you that.

Thank you for saying that. I get so annoyed when they're like "YOU GET PAID MORE SO IT'S OK TAHT EVERYTHING IS MORE EXPENSIVE"

When you get paid less than double what I would if I had a minimal wage job, I would care. When products cost you more than double what they do here, I might care...

But you, and they, don't.

It's sad really. How can you explain feeling sorry for yourselves like this?

It's so annoying when people continue to ignore that.

Australia's minimum wage is $15.51 per hour, or ONE DAYS WORTH OF WORK AT MINIMUM WAGE FOR A BRAND NEW AAA VIDEO GAME!!!!

Bloddy wankers like to think it's different on the other side of the pond, well.... IT BLODDY WELL ISN"T!

It's about double the pay, and double the price for everything. STFU already, same boat doods.

This!

Min wage is TWICE as much as it is here and so Australians should be paying twice as much as we do here, they aren't so they should stop whining!

They say the cost of living is higher, well of course it is, that goes hand in hand with the min wage and that is why games are also higher.

I do hope their prices get lowered though, so they will finally STFU!

I'll repeat myself: Australians do not have a higher gross yearly wage than most European countries (for example: Australia: min yearly wage: 20K, Netherlands: 23K, both in dollars). And even more important: they have a lower purchase power per capita. This kind of makes the whole "HERPDERP, THEY GET MORE PER HOUR, SO THEY MUST PAY MORE" argument moot.

 

[Epona]

On behalf of my colleagues in Australia:

"It's about bloody time, ya wankers!"

There, did I say that right?

Yup.

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

But when a gov makes the minimal wage twice what 'others' pay out, then see products being sold for twice what 'others' pay for...

Er, uhm... Never mind. I've bitched the same song often enough.

EDIT: *smiles at the above post ; )

both of these

yes, everything might be expensive in australia, but so is it over here, gaming is no different from any other market. seriously, try surviving on 8$/hr while scrounging for solid hours at a job, it won't get you many video games after taxes and other bills kick in, i promise you that.

Thank you for saying that. I get so annoyed when they're like "YOU GET PAID MORE SO IT'S OK TAHT EVERYTHING IS MORE EXPENSIVE"

When you get paid less than double what I would if I had a minimal wage job, I would care. When products cost you more than double what they do here, I might care...

But you, and they, don't.

It's sad really. How can you explain feeling sorry for yourselves like this?

It's so annoying when people continue to ignore that.

Australia's minimum wage is $15.51 per hour, or ONE DAYS WORTH OF WORK AT MINIMUM WAGE FOR A BRAND NEW AAA VIDEO GAME!!!!

Bloddy wankers like to think it's different on the other side of the pond, well.... IT BLODDY WELL ISN"T!

It's about double the pay, and double the price for everything. STFU already, same boat doods.

This!

Min wage is TWICE as much as it is here and so Australians should be paying twice as much as we do here, they aren't so they should stop whining!

They say the cost of living is higher, well of course it is, that goes hand in hand with the min wage and that is why games are also higher.

I do hope their prices get lowered though, so they will finally STFU!

I'll repeat myself: Australians do not have a higher gross yearly wage than most European countries (for example: Australia: min yearly wage: 20K, Netherlands: 23K, both in dollars). And even more important: they have a lower purchase power per capita. This kind of makes the whole "HERPDERP, THEY GET MORE PER HOUR, SO THEY MUST PAY MORE" argument moot.

If you make $15.51 an hour, minimum and you only make 20k that comes out to only working 24 hours a week. Here in the US we work almost twice that.

Also, your numbers are off:

http://www.livingin-australia.com/salaries-australia/

Full-time earnings in Australia averaged A$68,791 a year in the third quarter of 2011.

Maybe you could show me where you got your $20,000 number from because it seems way off.

 

[Meight08]

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

I am so sick of that line of reasoning. The claim that minimum wage is somehow a reflection of purchasing power is ridiculous.

The AUD is currently worth 0.9724 USD. There is no significant freight or conversion costs for releasing a piece of software. The only reason for software to cost 50-100% more in Australia is publishers agreeing to take profit windfalls from the drop of the American dollar rather than to act competitively.

No they do it because you all act like good little bitches who will still buy them you just dont have the control to not buy them stop buying and this will stop!

I was pointing out how this situation came to pass not the solution

Regardless that's not how the Consumer/Publisher Relationship should (Nor can) work. How many "boycotts" have you seen in this industry that get called and immediately fall over because people cave. Boycotts don't work.

Publishers should instead realize that they will SELL MORE at lower prices and since the marginal cost of producing another software unit is zero

Currently the publishers can set prices in Australia. THIS IS PRICE FIXING. And there are laws against it. It was solved in the Book industry by allowing parallel importing. I take heart that this committee might result in a similar situation for games.

Publishers dont set prices the stores do!

 

[Epona]

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

I am so sick of that line of reasoning. The claim that minimum wage is somehow a reflection of purchasing power is ridiculous.

The AUD is currently worth 0.9724 USD. There is no significant freight or conversion costs for releasing a piece of software. The only reason for software to cost 50-100% more in Australia is publishers agreeing to take profit windfalls from the drop of the American dollar rather than to act competitively.

No they do it because you all act like good little bitches who will still buy them you just dont have the control to not buy them stop buying and this will stop!

I was pointing out how this situation came to pass not the solution

Regardless that's not how the Consumer/Publisher Relationship should (Nor can) work. How many "boycotts" have you seen in this industry that get called and immediately fall over because people cave. Boycotts don't work.

Publishers should instead realize that they will SELL MORE at lower prices and since the marginal cost of producing another software unit is zero

Currently the publishers can set prices in Australia. THIS IS PRICE FIXING. And there are laws against it. It was solved in the Book industry by allowing parallel importing. I take heart that this committee might result in a similar situation for games.

Publishers dont set prices the stores do!

Then maybe you can explain why both Sony and Microsoft raised their prices to $60 this gen while Nintendo left theirs at $50. Do ALL the stores just happen to agree on the price?

No, hardware manufacturers set the standard price and retailers follow it.

 

[veloper]

I'll repeat myself: Australians do not have a higher gross yearly wage than most European countries (for example: Australia: min yearly wage: 20K, Netherlands: 23K, both in dollars). And even more important: they have a lower purchase power per capita. This kind of makes the whole "HERPDERP, THEY GET MORE PER HOUR, SO THEY MUST PAY MORE" argument moot.

This.
Minimum wages have nothing to do with it.

The difference can be partly explained by a reluctance everywhere to lower prices when the currency becomes more valuable.
So the Australian dollar may be more valuable than the USD now, but retailers will hope that the public won't perceive it that way.
All money devaluates over time and and jiggling the prices down and then up again is seen as the greater evil.

It could be that the current price point really is the optimum: fewer, but bigger sales for australian retailers and distributers.
Videogames, like DVDs and music are only worth what the fan will give for it and every dollar made is a dollar profit in those industries. If Australians stop buying the prices will go down.

 

[Meight08]

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

I am so sick of that line of reasoning. The claim that minimum wage is somehow a reflection of purchasing power is ridiculous.

The AUD is currently worth 0.9724 USD. There is no significant freight or conversion costs for releasing a piece of software. The only reason for software to cost 50-100% more in Australia is publishers agreeing to take profit windfalls from the drop of the American dollar rather than to act competitively.

No they do it because you all act like good little bitches who will still buy them you just dont have the control to not buy them stop buying and this will stop!

I was pointing out how this situation came to pass not the solution

Regardless that's not how the Consumer/Publisher Relationship should (Nor can) work. How many "boycotts" have you seen in this industry that get called and immediately fall over because people cave. Boycotts don't work.

Publishers should instead realize that they will SELL MORE at lower prices and since the marginal cost of producing another software unit is zero

Currently the publishers can set prices in Australia. THIS IS PRICE FIXING. And there are laws against it. It was solved in the Book industry by allowing parallel importing. I take heart that this committee might result in a similar situation for games.

Publishers dont set prices the stores do!

Then maybe you can explain why both Sony and Microsoft raised their prices to $60 this gen while Nintendo left theirs at $50. Do ALL the stores just happen to agree on the price?

No, hardware manufacturers set the standard price and retailers follow it.

Where do you even live nintendo games are 60$ here
Hardware manufacturers ARENT publishers
IF the manufacturers raise the licensing fee´s with 10$ publishers need to raise them with 10$
which will cause the retailers to charge 10 extra.

 

[kyle.albert]

its $14

 

[Dwarfman]

You only have to put with what you're willing to except. You don't want publishers boning you Australia? DO SOMETHING ABOUT IT!

Did you miss the part in the article where it said the government was holding an inquiry?

They were not elected to watch their gamers suffer and be be bled dry while they discuss the price of games in a committee!

Dude it's the Labor Party. Those guys would spend a million on a commitee to find out which breakfast cereal Julia Gillard should have for breakfast and then still fuck up a conclusion.

That being said, this issue has been a problem for too long and kudos to them for even looking like they're doing something about it.

 

[Epona]

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

I am so sick of that line of reasoning. The claim that minimum wage is somehow a reflection of purchasing power is ridiculous.

The AUD is currently worth 0.9724 USD. There is no significant freight or conversion costs for releasing a piece of software. The only reason for software to cost 50-100% more in Australia is publishers agreeing to take profit windfalls from the drop of the American dollar rather than to act competitively.

No they do it because you all act like good little bitches who will still buy them you just dont have the control to not buy them stop buying and this will stop!

I was pointing out how this situation came to pass not the solution

Regardless that's not how the Consumer/Publisher Relationship should (Nor can) work. How many "boycotts" have you seen in this industry that get called and immediately fall over because people cave. Boycotts don't work.

Publishers should instead realize that they will SELL MORE at lower prices and since the marginal cost of producing another software unit is zero

Currently the publishers can set prices in Australia. THIS IS PRICE FIXING. And there are laws against it. It was solved in the Book industry by allowing parallel importing. I take heart that this committee might result in a similar situation for games.

Publishers dont set prices the stores do!

Then maybe you can explain why both Sony and Microsoft raised their prices to $60 this gen while Nintendo left theirs at $50. Do ALL the stores just happen to agree on the price?

No, hardware manufacturers set the standard price and retailers follow it.

Where do you even live nintendo games are 60$ here
Hardware manufacturers ARENT publishers
IF the manufacturers raise the licensing fee´s with 10$ publishers need to raise them with 10$
which will cause the retailers to charge 10 extra.

I live in the US and Nintendo Wii games are $50, everywhere unless a store is running a sale. Also, if you don't think Microsoft, Nintendo and Sony publish games, you need to check again. You also said that stores set the prices, that was incorrect, hardware manufacturers set the prices and the stores follow those prices.

Here's something to think about, EA would probably love to sell Wii games for $60. Why don't they?

 

[Nyaliva]

Talking as someone from Australia who has friends in small business, I can tell you exactly why game prices are so high.

Bloody high taxes.

And I don't mean on games, I mean on small businesses. The government takes so much red tape money from businesses so they can "make sure they're working in the interests of their consumers" meaning they get paid to say "Everything's in order here, this merchant is selling his wares fairly and by the book." Then there's advertising and trademarks. You need permission from a radio company just to play music in your store. And how do you get permission? By paying them money. That's why EB has their own "TV channel" in their stores which plays their own music and videos. But think about everything else that's copyrighted or trademark that they have to use to sell their stuff.

Then there's rent and franchise costs. If you own a franchise, you have to pay a huge chunk to the company for using their name and methods. And my gosh the rent! As much as $1500 a week. For many businesses, this could be two days worth of profits, and that's not even counting all the previous costs. And then wages, obviously, which is one of the larger of their fees so many will have one person on all day weekdays and two on weekends unless it's a large store. That's also why they push pre-owned games because the only loss is what they pay to get it, which is like 20%, rather than most of it which they pay to publishers for new games.

So I can understand why costs are so high. I don't like it but if I really want the game I'm willing to pay it for the small business.

 

[Dwarfman]

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

$18 and hour minimum wage? Fack, I no longer feel sorry for Australians having to pay more for games, that is a real living wage right there, I think minimum wage here is like $7.30 or so an hour.

Not sure where they get the figures. I know when I was doing my apprenticeship I was earning $5.20 an hour as a first year - that was....let me do the math...roughly ten years ago - our own first year gets paid $8.20 an hour nowadays. Before I was an apprentice I was earning $16.40 as a kitchen hand/oyster shucker which I suppose would translate to $18.00 now but the wage I had was considered good money not minimum wage at all!

 

[Lim3]

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

Minimum wage is $15 an hour for an adult - over 21.

However industries like hospitality have 0 tipping.

Also average wage is inflated by what we call 'a two speed economy'. The people in the mining sector make 6 digit salaries for even unskilled labour and people everywhere else have much lower salaries.

My $AUS1 buys around $US1 so why do the same digital products cost twice as much for me?

It's market discrimination and price gouging.

 

[Epona]

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

Minimum wage is $15 an hour for an adult - over 21.

However industries like hospitality have 0 tipping.

Also average wage is inflated by what we call 'a two speed economy'. The people in the mining sector make 6 digit salaries for even unskilled labour and people everywhere else have much lower salaries.

My $AUS1 buys around $US1 so why do the same digital products cost twice as much for me?

It's market discrimination and price gouging.

Yet, with 4 hours of work at Australian min wage will get you a AAA game at US prices. Our min wage workers have to work 8 hours to get that same game at US prices.

 

[Paradoxrifts]

Australian salaries are much higher and the conversion rates, they are actually paying less than any place in the world. $1AU is not equal to $1US. Even their minimum wage is like $18AU/hr

$18 and hour minimum wage? Fack, I no longer feel sorry for Australians having to pay more for games, that is a real living wage right there, I think minimum wage here is like $7.30 or so an hour.

I've been saving up to move over their to be closer to family that lives there, but seems out of the question $7000+ for immigration visa, $1000+ for airfare. $1000+ moving and other stuff. Not a cheap transition.

The higher minimum wage compensates for the high cost of living here. Someone on minimum wage in Australia who also has to pay their own way (rent,food, etc) is still going to have almost no money left for games at all let alone $110 for a game on release. Hell second hand games like halo 3 and CoD are still 60-70 dollars and that's years after their release.

The high minimum wage is merely a symptom of a deeper underlying problem with the Australian economy, which is that owning your residence is an extremely shrewd move if you can afford it as the government won't charge capital gains tax on your primary residence. For the people that can afford even barely by the skin of their teeth, it it is no-brainer investment choice that drives up the prices of rent, which encourages more people to buy their homes, which drives up the rent even further in a vicious unending cycle of boom and bust.

So don't blame the poor schmucks on minimum wage, because the problem is that Australia is addicted to middle-class welfare, and neither side of our political field is going to do anything about it for the foreseeable future.

 

[Shinkicker444]

Having a high dollar is quite bad for a Country. In order for the economy to function normally when dealing with a high dollar you must be able to import things for a much lower price than you would with a low dollar. This is because when exporting products with a high dollar, you have to sell things a lot cheaper internationally than you would with a low dollar.

For example if we ship off some wool to the US for US$50 when our dollar was 0.5 to your 1, we have essentially made $100 AUD. When our dollar is 1-1 or higher we have made only $50. Obviously this is quite bad for businesses that rely on exportation. The upside to this is we can import goods a lot more cheaply. It is a balance that has to be maintained, otherwise it can have a negative effect on the economy. This is why China, the biggest exporter in the world, refuses to list their currency and instead keeps it low because it is much better for internal growth.

Also the people linking the higher minimum wage are clueless. We are much more of a socialist country than the US, our minimum wage is quite high because we look after the bottom class a lot more than you do in the US. The average wage is a lot closer than the minimum wage is (though still higher) to the US. We pay FAR more in taxes, the median price of a house in Sydney is $577000 (this is not the inner city, it also includes our huge urban sprawl which goes out like 50km), the cost of living in Australia is one of the highest places in the world (5th actually, the US isn't even in the top 25). We are not a comfortable nation compared to the US, especially for new home buyers or people who rent.

We don't pay as much in comparison to the US for any other products except software, books and electronics (though they are still higher than what you pay in the US). If we go off of how much we should be paying for games depending on cost of living and average wage, we should be paying around $70-75 for new release games. However even that is stupid, as this will negatively affect the economy, since we will be making less than we would in exports, while paying the same in imports.

Someone promote this man!