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General discussion (archive)<b>Letter from the M.D.</b>: About Regional Pricing(5517 posts) (5517 posts) 
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This is my favourite topic
Posted February 25, 2014
Hey Goggers;

As many of you know, we announced on last Friday that we are going to introduce regional pricing for 3 new games coming up on GOG.com soon. Looking at the amount of reactions (over 3,500 comments at this very moment), it is obvious that this change is making many of you guys worried. We must have failed to clearly explain why our pricing policy for (some) newer games will change and what this means as a matter of fact for our PC & MAC classic games, which account for over 80% of our catalogue.

To be honest, our announcement was a bit vague simply because our future pricing policy is not 100% set in stone yet and we were just worried to make any promises before it was. You know, GOG.com has been growing quickly (thanks to you!), and the more we grow, the more we are worried to make some of you guys disappointed. This is why we were so (over-)cautious with our announcement.

We should have just been upfront about why we've made these changes and what they mean for us in the future and what we're planning. So let's talk. To be clear: what I'm talking about below is our plan. It's a plan that we believe we can accomplish, but while it's what we want to do with GOG, it may change some before it actually sees the light of day. Please don’t blame me for talking open-heartedly today and telling you about the plans and pricing policy we want to fight for and eventually achieve. The below plans aren't sure. The only guarantee I can give you is that we’ll do our best to fight for gamers while still making sure GOG.com as a whole grows (because well, we still want to be around 50 years from now, you know!). So, enough for the introduction, let’s get things started.

Why does GOG.com need to offer newer games at all?

We've been in business for 5 years now, and we've signed a big percentage of all of the classic content that can be legally untangled. There are still some big companies left we're trying to bring into the GOG.com fold, like LucasArts, Microsoft, Take2 and Bethesda, but what classic titles will we sign in the future once we have those partners on-board? We need to sign newer games or else just fire everyone and keep selling the same limited catalog. Either we bring you “not so old” releases from 2010+ or brand-new AAA titles, because these will become classic games tomorrow. It’s as simple as that.

Also, well, we want to expand beyond just classic games, hence the fact we have been offering you brand-new indie releases for almost 2 years now. Why expanding? Well, obviously, because the more games we sell, the more legitimacy we have on the market and the more likely it is that we can achieve our mission: making all PC & MAC video games 100% DRM-free, whether classic or brand-new titles.

To be straightforward (excuse my French):DRM is shit-- we'll never have any of it. It treats legitimate customers like rubbish and pirates don't have to bother with it. It's bad for gamers, and it's also bad for business and our partners. We want to make it easy and convenient for users to buy and play games; rather than give piracy a try. Happy gamers equals a healthy gaming industry; and this is what we fight for. Anyway, I am sure you well know our opinions about DRM.

To make the world of gaming DRM-free, we need to convince top-tier publishers & developers to give us a try with new games, just like they did with classic games. We need to make more case studies for the gaming industry, just like we successfully did back in 2011 with The Witcher 2. It was our first ever 100% DRM-free AAA day-1 release. GOG.com was the 2nd best-selling digital distribution platform worldwide for this title thanks to you guys, despite having regional prices for it. We need more breakthroughs like this to be able to show all the devs and publishers in our industry that DRM-free digital distribution is actually good for their business and their fans. And when I say breakthroughs, I am talking about really kick-ass games, with a potential metacritic score of 85% or more, AA+ and AAA kind of titles.

And this is exactly why we signed those 3 games we told you about last Friday. We believe those 3 games can be massive hits for hardcore gamers, that they can help us spread the DRM-free model among the industry for newer games and we did our best to convince their rights holders to give GOG.com a try. One of those games, as you see already, is Age of Wonders 3. We're planning more titles even beyond these first 3 soon.

Alright, but why is regional pricing needed for those (only 3 so far!) newer games then?

First of all, you have to be aware of an important fact when it comes to newer games: GOG.com cannot really decide what the prices should be. Top-tier developers and publishers usually have contractual obligations with their retail partners that oblige them to offer the game at the same price digitally and in retail. When they don’t have such contractual obligations, they are still encouraged to do so, or else their games might not get any exposure on the shelves in your favorite shops. This will change over time (as digital sales should overtake retail sales in the near future), but as of today, this is still a problem our industry is facing because retail is a big chunk of revenue and there’s nothing GOG.com can do to change that. We need to charge the recommended retail price for the boxed copies of the games in order for developers (or publishers) to either not get sued or at least get their games visible on shelves. You may recall that our sister company CD Projekt RED got sued for that in the past and we don’t want our partners to suffer from that too.

On top of that, you have to know that there are still many top-tier devs and publishers that are scared about DRM-free gaming. They're half-convinced it will make piracy worse, and flat pricing means that we're also asking them to earn less, too. Earn less, you say? Why is that? Well, when we sell a game in the EU or UK, VAT gets deducted from the price before anyone receives any profit. That means we're asking our partners to try out DRM-free gaming and at the same time also earn 19% - 25% less from us. Other stores, such as Steam, price their games regionally and have pricing that's more equitable to developers and publishers. So flat pricing + DRM-Free is something many devs and publishers simply refuse. Can you blame them? The best argument we can make to convince a publisher or developer to try DRM-Free gaming is that it earns money. Telling them to sacrifice income while they try selling a game with no copy protection is not a way to make that argument.

Getting back to those 3 new upcoming games coming up. The first one is Age of Wonders 3, which you can pre-order right now on GOG.com. The next 2 ones will be Divine Divinity: Original Sin and The Witcher 3. We’re very excited to offer those games DRM-free worldwide and we hope you’ll love them.

Still, we know some countries are really being screwed with regional pricing (Western Europe, UK, Australia) and as mentioned above, we’ll do our very best, for every release of a new game, to convince our partners to offer something special for the gamers living there.

And don’t forget guys: if regional pricing for those few big (as in, “AA+”) new games is a problem for you, you can always wait. In a few months. The game will be discounted on sale, and at 60, 70, or 80% off, the price difference will be minimal indeed. In a few years it will become a classic in its own right, and then we have the possibility to to make it flat-priced anyway (read next!) The choice is always yours. All we are after is to present it to you 100% DRM-free. We are sure you will make the best choice for yourself, and let others enjoy their own freedom to make choices as well.

So, what is going to happen with classic games then?

Classic content accounts for about 80% of our catalog, so yes, this is a super important topic. We've mentioned here above that we can’t control prices for new games, but we do have a lot of influence when it comes to classic games. GOG.com is the store that made this market visible and viable digitally, and we're the ones who established the prices we charge. We believe that we have a good record to argue for fair pricing with our partners.

So let's talk about the pricing for classics that we're shooting for. For $5.99 classics, we would like to make the games 3.49 GBP, 4.49 EUR, 199 RUB, and $6.49 AUD. For $9.99 classics, our targets are 5.99 GBP, 7.49 EUR, 349 RUB, and $10.99 AUD. This is what we’ve got in mind at the moment. We’ll do our best to make that happen, and we think it will. How? Well, we have made our partners quite happy with GOG.com's sales for years - thanks to you guys :). We have created a global, legal, successful digital distribution market of classics for them. This market didn't exist 5 years ago. By (re)making all those games compatible with modern operating systems for MAC and PC, we've made forgotten games profitable again. When it comes to classic games, we can tell them that we know more about this market than anyone. :) Being retrogaming freaks ourselves, we know that 5.99 EUR or GBP is crazy expensive for a classic game (compared to 5.99 USD). We have always argued that classic games only sell well if they have reasonable prices. Unfair regional pricing equals piracy and that’s the last thing anybody wants.

What’s next?

We will do our very best to make all of the above happen. This means three things:

First, we will work to make our industry go DRM-free in the future for both classic and new games (that’s our mission!).

Second, we will fight hard to have an attractive offer for those AA+ new games for our European, British and Australian users, despite regional pricing that we have to stick to.

Third, we will switch to fair local pricing for classic games, as I mentioned above.

TheEnigmaticT earlier mentioned that he would eat his hat if we ever brought DRM to GOG.com. I'm going to go one step further: by the end of this year, I'm making the promise that we will have converted our classic catalog over to fair regional pricing as outlined above. If not, we'll set up a record a video of some horrible public shaming for me, TheEnigmaticT, and w0rma. In fact, you know what? Feel free to make suggestions below for something appropriate (but also safe enough that we won't get the video banned on YouTube) so you feel that we're motivated to get this done quickly. I'll pick one that's scary enough from the comments below and we'll let you know which one we're sticking to.

I hope that this explanation has helped ease your worry a bit and help you keep your faith in GOG.com as a place that's different, awesome, and that always fights for what's best for gamers. If you have any questions, comments or ideas, feel free to address them to us below and TheEnigmaticT and I will answer them to the best of our abilities tomorrow. We hear you loud and clear, so please do continue sharing your feedback with us. At the end of the day GOG.com is your place; without you guys it would just be a website where a few crazy people from Europe talk about old games. :)

I end many of my emails with this, but there's rarely a time to use it more appropriately than here:

“Best DRM-free wishes,

Guillaume Rambourg,
(TheFrenchMonk)
Managing Director -- GOG.com”
Posted February 28, 2014
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CarrionCrow: snip
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paulrainer: fanboy - yawn
Not really sinking in that if what you said was true, they'd have failed and you wouldn't be sitting on their site, trying to win Miss GOG Congeniality 2014, is it?
Posted February 28, 2014
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Melhelix: By backing the second biggest boy on the black that continues to grow every day (both in titles and users)? According to their 5 year video GOG claims 50 million gamers. One would think that would give them a large enough market share to push their weight around and make a stand. Especially since it is that same stand that earned them the 50 mil in the first place.
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synfresh: GoG has been in business for 5 years, tell me now. Has DRM-Free or regional pricing changed one iota in this industry? GoG does not have a large marketshare, look at any sales comparison of games that are sold on both here and Steam and you tell me what percentage GoG averages? The only game where GoG comes out looking ok is their own title (Witcher).
How about waiting for Steam to implode when Valve attempts to launch their Steam Machine in competition with the Playstation 4 and the Xbox One?

The industry is the way it is for many reasons, but by far the biggest is that people don't really care about much besides getting the latest games. A lot of this is because the biggest reason for gaming in the first place is escapism, and people simply don't want to get involved. Combined with the apathy that causes people to self-censor themselves, in the mistaken belief that they cannot change anything, and that they have go with the status quo, it is no wonder very little has been achieved.

This is because the majority of people, especially collectively, are either stupid or lazy (or both), and focused a lot on short-termism. However, such short-termism is ultimately self-defeating, because it leads to selfish, self-preserving behaviours which are unnecessary. It leads to competition where there is no need for competition. Such ideas are often based on the idea that there are limited resources, when this is simply not true.

In terms of making any sort of change, the logic itself is quite simple - almost too simple to believe. The chance of failure in a given action is always less than the chance of failure of not trying. Thus, if you want to succeed at anything, you MUST try, otherwise you simply won't succeed.

This is what is so sad about GOG throwing away Worldwide Pricing. They have stopped trying, and as such there is now a 100% chance that they will fail to bring about Worldwide Pricing in the industry. They have guaranteed that they will fail at this policy. When they were trying, even if it had a 0.001% chance of success, people supported them because there was still this chance.

Has DRM and Regional Pricing changed one iota in this industry in the 5 years that GOG has been in business. The answer is yes, it has. These may not have been big changes, but they are still changes. Many of the big players are still toying with DRM, sure, but at least they are working to improve it. Steam has DRM, sure, but it is no way near as intrusive and obnoxious as the initial DRM systems we say 5 years ago. Even EA has learnt that if you put extremely obnoxious DRM in your game, people won't play, and the game will die. Sure, they are trying to put a friendly face on DRM, rather than be DRM-Free, but it IS an improvement.

Likewise with Regional Pricing. Sure, many publishers still use the idea that 1 USD = 1 EUR, but at least they have stopped with the absurd idea that 1 USD = 1 GBP. This, is an improvement, as well.

Bear in mind that the industry itself is also changing, despite dinosaur publishers trying to keep things the same. High streets all over the world are dying and changing, as retail stores are realising that they cannot compete with digital distributors in terms of prices alone. As such, many retail stores will be there for the service, as opposed to the products. I am thinking that it won't be long before retail stores become the arcades of tomorrow, where you can go and play games, before purchasing them and taking them home with you. Retail stores will simply become advertising outlets for new games, used to build hype before digital releases.

It makes no sense for GOG to give up their principles in a changing industry, because it is an "industry standard." Nobody knows how long this will be the industry standard for. The last thing GOG wants to do is give up on a principle and then find that actually, the entire industry eventually switches to that principle anyway, and GOG has lost a valuable head start they once had, coupled with the lost trust of their community, because they were trying to keep up with the dinosaurs.

History shows that it is the upstarts that drive innovation in the industry. Being first is rarely a driving factor for change and improvement. Such innovation quite often comes from the smaller, trailing companies, that are looking to find ways to give themselves the lead. Of course, this also stems from the issues that those in the lead tend to become complacent and stagnate - when in reality the only real competition anybody or anything actually has is with itself.

This is how the second best boy on the block competes with the front runner. GOG should be playing by its own rules, not by the rules of Steam. Everybody here wants GOG to be the best GOG, not the second best Steam.
Posted February 28, 2014
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weissel: [[lots of maths]]

Just sayin', the "identical USD value" may be "easy", but not necessarily fair.
Thanks for the full breakdown there. I think it demonstrates our point as well as anything I could offer.

And you're right; there's no "fair" approach that's always fair for everyone. PWYW is fair, kind of, although I'd argue it's pretty crap for the game makers. Unless we require you submit us your tax statements for the last year and use that to evaluate what we should charge you, it will never be "fair" in the social justice sense of the word.

For our catalog of classic content, I think we can make it really damn close to flat pricing everywhere (and we will, of course, re-adjust the currency exchange if something goes titanically weird with them. I believe our current target is that if the price difference between <<local>> and <<USD>> gets to be more than 5%, it gets looked at? The numbers aren't final yet, of course...), but with the convenience of the fact that we're now charging in local currencies. This is a big deal because we can now also accept more local payment methods. Suddenly, entire countries that can't really buy games from us will be able to do so. I'd note that, in our new setup, we're still eating the costs of VAT, which means we make less from EUR and UK than we do from the rest of the world for every game sold. We believe that flat pricing is a better alternative (when we can manage it), so we're happy enough to take that hit to make it a better offer for you guys.

For new games, we're offering competitive pricing (as in, it costs the same price on GOG.com as it does at any other store in the world.). Then, beyond that, we're offering something from our own pockets to offset the fact that, yeah, regional pricing can suck when it's not done fairly. But the argument over what's a bigger fight (DRM or flat pricing) was one that we worked on for a long time, here, and our decision was that to advance the cause of DRM-Free gaming.

You could argue that we could have done both, but we believe that we'd been hitting a whole lot of walls trying to fight both at once. And so we chose which was more important to us and, we believe, to gamers in general. We're not giving up completely on making regional pricing better. We will push for better terms for regionally priced games when and where we can. But part of growing up is realizing which fights to pick. I think we can make many more gamers happy with our new policies than we would have with our older ones.

Some of you feel betrayed by this change. I understand that. Some of you are incandescently angry about it. I'm sorry that we've made you so upset. Every change that we've made in the last 5 years has been a change that we believe will help make GOG.com bigger, bring us more gamers, and help us sign more big content DRM-Free on GOG. We're sorry if you feel we've betrayed everything that made us special to do so. It's your feelings, and it's your right to feel that way. I hope that, when you've had some time to cool down and some time to see what we're actually doing, you'll feel that we haven't let you down, in the end.
Posted February 28, 2014
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Davane: GOG should be playing by its own rules, not by the rules of Steam. Everybody here wants GOG to be the best GOG, not the second best Steam.
+1 Wow, I do believe that wins the award for best summary of a 3332 post thread.
Posted February 28, 2014
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PaladinWay: You know, if your desire here is to be fair with regional pricing as an option on old games, why not offer the choice? Nobody could be mad about that. So for Eurozone customers with old games list both the US $ and Euro prices on the store page and at checkout put a radio button saying "Pay in Euros" or "Pay in US dollars" and let the individuals decide which is better for them personally. Anyone who says you're being greedy bastards for giving them an additional option is clearly dumb, however you can have a lot of people who've figured out nice exchange rate tricks or perhaps keep an account in US dollars that they populate at favorable exchange rates for this sort of purchase and you can't argue with all the possible scenarios there.
No offense but your question shows that you're not paying attention. The game publisher is deciding they're not going to release DRM-free games on GOG.com without regional pricing period, so the choice is to either not sell these games at all, or to sell them and bend on regional pricing and try to make it work out the best way possible within the constraints of what the game publisher is willing to do.

You're telling GOG to let the customer decide, like GOG actually has that choice to begin with. GOG actually wants everyone to have one price, so if they could decide to let you choose, then they could also decide to make the decision themselves and just keep one fixed global price. The fact that they can't offer a fixed global price for these games is the decision of the game publisher and that precludes them from allowing the customer to make the choice.

It's simple connecting the dots really. The question should be directed at the game publisher as they're the one who decides what their product sells for and how, or not at all.
Posted February 28, 2014
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Melhelix: Hey now, no need for that. TET is doing the best he can with what the higher ups have chucked down. He also is one of our best lines of communications with GOG. Get frustrated and angry at the message, but don't shoot the messenger.
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paulrainer: no , im really sorry

if he was a marketer guy as per his forum titel then he really is half assed.
He should have given the MD letter a quick once over before that dropped. If he did ..well..oh, dear.

He has no answers , just more "good news " spin
A quick question... If a physical shop you've been on a regular basis for the last 2 years suddenly changed its economical model and did bad PR on this change (I think we can all find such examples), would you:

- Go spent 3 days in the shop and repeatedly telling them what liars, betrayers (to only use the nicest terms read here) they are.

or

- Just pass by to tell them thanks for the service the last 2 years but you do not agree with the change and you'll do your shopping elsewhere in the future.

If the former, I'll be happy to not have you as a customer. If the later, then why behave differently on a forum?
Posted February 28, 2014
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Entropy87: I just realized something. Even though things changed for the worse we, the GOG community, can be really proud of ourselves because this must be the most polite shitstorm ever.
It's been remarkably civil, yeah. I've seen *good* threads on other places that were a lot less civil than this. :)
Posted February 28, 2014
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JudasIscariot: AFAIK, the plan to reprice the older games in the aforementioned currencies is to offset, for the most part, the fees incurred by currency exchange.
For me this represents an increase in fees. If you're really doing it for my own good, let me select my preferred currency on my user page.
Posted February 28, 2014
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Davane: Either way, it would be unlikely that the Romanian government will issue such a tax...
I would never discard the incompetence of the authorities in my country... We have a tax on rainwater after all... Albeit it's unlikely to happen...
Post edited February 28, 2014 by blotunga
Posted February 28, 2014
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paulrainer: no , im really sorry

if he was a marketer guy as per his forum titel then he really is half assed.
He should have given the MD letter a quick once over before that dropped. If he did ..well..oh, dear.

He has no answers , just more "good news " spin
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cal74: A quick question... If a physical shop you've been on a regular basis for the last 2 years suddenly changed its economical model and did bad PR on this change (I think we can all find such examples), would you:

- Go spent 3 days in the shop and repeatedly telling them what liars, betrayers (to only use the nicest terms read here) they are.

or

- Just pass by to tell them thanks for the service the last 2 years but you do not agree with the change and you'll do your shopping elsewhere in the future.

If the former, I'll be happy to not have you as a customer. If the later, then why behave differently on a forum?
yawn
Post edited February 28, 2014 by paulrainer
Posted February 28, 2014
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TheEnigmaticT: I do not argue that offering pricing in EUR or RUB is not ideal; our previous flat pricing worldwide was also not ideal. We believe that this new alternative is better for users and developers alike than what we had been doing in the past.
Um, how exactly was flat pricing worldwide not ideal? You have been using it for 5 years already, and it seems to have been working out well so far.
Posted February 28, 2014
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TheEnigmaticT: I do not argue that offering pricing in EUR or RUB is not ideal; our previous flat pricing worldwide was also not ideal. We believe that this new alternative is better for users and developers alike than what we had been doing in the past.
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Davane: Um, how exactly was flat pricing worldwide not ideal? You have been using it for 5 years already, and it seems to have been working out well so far.
it doesnt fit the current business model of selling out and screwing customers over
Posted February 28, 2014
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weissel: [[lots of maths]]

Just sayin', the "identical USD value" may be "easy", but not necessarily fair.
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TheEnigmaticT: Thanks for the full breakdown there. I think it demonstrates our point as well as anything I could offer.

And you're right; there's no "fair" approach that's always fair for everyone. PWYW is fair, kind of, although I'd argue it's pretty crap for the game makers. Unless we require you submit us your tax statements for the last year and use that to evaluate what we should charge you, it will never be "fair" in the social justice sense of the word.

For our catalog of classic content, I think we can make it really damn close to flat pricing everywhere (and we will, of course, re-adjust the currency exchange if something goes titanically weird with them. I believe our current target is that if the price difference between <<local>> and <<USD>> gets to be more than 5%, it gets looked at? The numbers aren't final yet, of course...), but with the convenience of the fact that we're now charging in local currencies. This is a big deal because we can now also accept more local payment methods. Suddenly, entire countries that can't really buy games from us will be able to do so. I'd note that, in our new setup, we're still eating the costs of VAT, which means we make less from EUR and UK than we do from the rest of the world for every game sold. We believe that flat pricing is a better alternative (when we can manage it), so we're happy enough to take that hit to make it a better offer for you guys.

For new games, we're offering competitive pricing (as in, it costs the same price on GOG.com as it does at any other store in the world.). Then, beyond that, we're offering something from our own pockets to offset the fact that, yeah, regional pricing can suck when it's not done fairly. But the argument over what's a bigger fight (DRM or flat pricing) was one that we worked on for a long time, here, and our decision was that to advance the cause of DRM-Free gaming.

You could argue that we could have done both, but we believe that we'd been hitting a whole lot of walls trying to fight both at once. And so we chose which was more important to us and, we believe, to gamers in general. We're not giving up completely on making regional pricing better. We will push for better terms for regionally priced games when and where we can. But part of growing up is realizing which fights to pick. I think we can make many more gamers happy with our new policies than we would have with our older ones.

Some of you feel betrayed by this change. I understand that. Some of you are incandescently angry about it. I'm sorry that we've made you so upset. Every change that we've made in the last 5 years has been a change that we believe will help make GOG.com bigger, bring us more gamers, and help us sign more big content DRM-Free on GOG. We're sorry if you feel we've betrayed everything that made us special to do so. It's your feelings, and it's your right to feel that way. I hope that, when you've had some time to cool down and some time to see what we're actually doing, you'll feel that we haven't let you down, in the end.
This. This should have been the official response. It's well written, and makes us (at least myself) not just feel like some vague "buyer units" that can be fooled with market speak. The 5% fluctuation is a critical point that really should have been mentioned in the official letter. Also, kudos for actually addressing feelings of fear and anger and not just dismissing them out of hand. I still don't like regional pricing, but at least now I don't feel like I'm being drowned in PR spin.
Posted February 28, 2014
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TheEnigmaticT: It's been remarkably civil, yeah. I've seen *good* threads on other places that were a lot less civil than this. :)
What would you like us to do? Grab pitchforks and invade Poland? :D Even though I am one of the most vocal opponents of regional prices, I will have to admit, that there will be no turning back. Though I still wish that the "classic games" remain priced in USD and same everywhere. On the other hand what I would really like to see here is, that GOG tries to bring 4-5 years old complete games here. That means with all DLC. I would gladly pay $30 for example to have all 3 Mass Effects without DRM and with all DLCs (including the ones which are missing from the "Complete" editions).
Posted February 28, 2014
Strangely I can't reply on a specific post, no matter what. It's for sure a coincidence ....

Well, I have the answers I needed and made my conclusion. You said in a polite way "Fuck you, the decision is made and we don't want to loose you as customers but eat what we feed!". Thanks, but no thanks. If you look at my library you can extrapolate yourself you could have earned by me alone and I'm sure I'm not the only one able and willing to spend such amounts of money stopping doing business with you. Sometimes it's not about money and you (gog) made yourself quite a fool with your funmaking over regional prices and now implementig this. I'm absolutely convinced this is only the beginning of a road you have chosen and time will prove I'm right with that. Good bye.
Post edited February 28, 2014 by wintermute.
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General discussion (archive)<b>Letter from the M.D.</b>: About Regional Pricing(5517 posts) (5517 posts) 
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