It seems that you're using an outdated browser. Some things may not work as they should (or don't work at all).
We suggest you upgrade newer and better browser like: Chrome, Firefox, Internet Explorer or Opera

×
Community
General discussion (archive)<b>Letter from the M.D.</b>: About Regional Pricing(5517 posts) (5517 posts) 
(5517 posts) 
Pages:
1
75
150
225
300
328
329
330
331
332
368
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 March 05, 2014
avatar
kaileeena: Just FYI, there are a number of companies out there that has values and stick with them, and some are really big companies and they understand that dropping their values will have big effect on their business.
avatar
fronzelneekburm: Oh? In the realm of digital distribution, which companies would that be?
not in digital distribution unfortunately, well or people thought there was one until it turned out to be a complete and utter lie.
Anyhow I was talking about other businesses, I am mentioning that because people keep repeating that its ok for business to not have values or have values as long as its useful for them which might be true but any good business knows that if your customers are around because of your values, its dumb to throw them away and assume the customers will stay.
Posted March 05, 2014
avatar
Strijkbout: GOG > regional pricing = Steam wins!
The sad irony being that Steam are the ones that made regional pricing the standard in the realm of digital distribution.

The people who threaten to boycott gog because of regional pricing seem to be blissfully ignorant of that fact. While the introduction of regional pricing is a giant leap towards being labeled "almost as bad as Steam", gog still has a long way to go until they deserve the label "even worse than Steam".
Posted March 05, 2014
avatar
StormHammer: The reason why I say European developers/publishers are not really affected by VAT is because they would already have set their prices (costs + markup) at a level to give them an appropriate profit margin. The VAT is simply added on afterwards to charge to the customer. The VAT should not eat into their profit margin unless they have done a poor job calculating their other percentages.

For example, when GOG.com (and their partners) set a price of $9.99 for a game, the 19% VAT that is part of that price should not impact their profit margin, because they already accounted for their costs + markup in the other 81% of that flat price. The real price of the product is $8.39, and the VAT ( $1.60 ) is an addition to form part of their VAT calculation for the quarter. Neither GOG.com or their developer/publisher partner get to keep that VAT - so it does not affect either company's profit margin.

What I am saying is that the net price of a product (ex VAT) is the price that a company sets in order to see a good return.
This isn't actually entirely accurate. Your description of how VAT is calculated is spot on but you're forgetting one little detail and that is that companies are in no way prohobited from considering the end price of their product relative to that of other products on the market.

In other words, retail businesses do consider if their products are competitive on a given market after VAT and if that's not the case then something has to give, be it profit margin, product-related costs, or possibly the decission to sell the product in the first place. A nice profit margin is entirely worthless if you can't actually sell your product, after all. This leads to a whole lot of guessing about the elasticity of a given price and the actual market demand of a given product, which will have an effect on the retail price a business decides to offer.

I don't think many businesses today determine their prices by exclusively looking at their production costs, adding a profit margin, and then adding VAT.
Posted March 05, 2014
avatar
StormHammer: Well, I'm just not one to believe in coincidences, and it seems curious to me that regional pricing is being rolled out now when there is a change to tax rules on the horizon for companies based in the EU, coming into effect from the start of 2015. Maybe I'm seeing a link where there isn't one.

I imagine the price increase for regional pricing in Europe (and elsewhere) will undoubtedly help to offset any additional costs incurred (systems and man hours) for sorting through that VAT mess. :/
I would like to once again remind you that the difference for classic titles for the end user is less than 10-20 cents, and that's assuming they're paying mid-market rates for the EUR->USD conversion (hint: they're paying more).

Furthermore, GOG already has to pay national VAT for any country where they sell for more than €100,000 per year; that might not be the case for every EU country, but I would strongly expect it to be the case for several countries.

We're talking pennies here. Those same pennies can already appear or disappear from simple currency fluctuations.
Posted March 05, 2014
avatar
Yeti575: Am now trying to come to terms with that even though I really don't want to take my money to Steam, at least it's a long time since I realised they sc**w me over with their regional pricing and forced EUR.
avatar
jtsn: Steam has an included store operated by Valve, but you are not forced to buy your Steam games from there (in my case, most of them are from the Humble Bundles). Steam keys are sold around the world in numerous currencies, offline and online.
avatar
Trilarion: In the real world there is competition. In the internet world everything is artificial and the publishers exclusively have the say what is fair and what is not. Such excesses with 300% price differences like here would in the real world be solved by importing goods from one region to another (shipping costs and customs probably not making for the difference). The gauging effect of trade is completely missing. The result is tyranny of the publishers and no way to defend yourself against unfairly high prices.
avatar
jtsn: Publishers still compete with pirates in the digital world. The more software piracy inside a region, the better the deal for customers. That's the sad truth, just have a look at Russia...
I would say it depends not on the amount of piracy but on average expendable income in the region.

In Russia (outside Moscow an SPB), most people just cannot afford buying games for $30+, so if publishers want to sell here, they will need to either contend with very low sales or low prices. They also introduce region/language locks to avoid games from Russia resold outside.
avatar
Digital_CHE: I dissagree because some games are, in fact, REGION LOCKED on Steam and you can not even purchase them... There is no region lock on gog.com... yet.
avatar
Matruchus: Yes that is true about region lock there. Would just like point out that since some time STEAM has a new feature called family sharing. If a family member has a steam account it can just lend the game from other family member if that family member is not playing at the moment. That is allowed for up to 10 different accounts. There is no validation necessary that you are a family member or such.
It is still in beta, so you need beta access to get that, and we don't know how it will work when out of beta.
Post edited March 05, 2014 by CheeseshireCat
Posted March 05, 2014
avatar
dhundahl: This isn't actually entirely accurate. Your description of how VAT is calculated is spot on but you're forgetting one little detail and that is that companies are in no way prohobited from considering the end price of their product relative to that of other products on the market.

In other words, retail businesses do consider if their products are competitive on a given market after VAT and if that's not the case then something has to give, be it profit margin, product-related costs, or possibly the decision to sell the product in the first place. A nice profit margin is entirely worthless if you can't actually sell your product, after all. This leads to a whole lot of guessing about the elasticity of a given price and the actual market demand of a given product, which will have an effect on the retail price a business decides to offer.

I don't think many businesses today determine their prices by exclusively looking at their production costs, adding a profit margin, and then adding VAT.
I had not forgotten these details, actually, but tried to simplify it for other people to understand. Also, going into detail about the elasticity of costs and profit margins in relation to sales forecasts, supply and demand, and all of the other factors involved in price setting, is a discussion in danger of derailing this thread. The only reason why I looked into the VAT calculation was due to the fact that VAT was explicitly mentioned in the letter addressed to the community by the MD as one of the reasons for switching to regional pricing.

avatar
Pidgeot: Furthermore, GOG already has to pay national VAT for any country where they sell for more than €100,000 per year; that might not be the case for every EU country, but I would strongly expect it to be the case for several countries.
Thank you for pointing that out. :) I missed it while doing my little bit of research (and I tend to avoid consulting Wikipedia for information, because it's not completely reliable, so looked for other sources). :(

If I've made any miscalculations or wrong assumptions in my previous posts, continue to feel free to point them out. :)
Post edited March 05, 2014 by StormHammer
Posted March 05, 2014
Ok, so for me living in Switzerland here's what I see right now (using today's exchange rate as provided by duckduckgo:
$9.99 USD = CHF 8.87
€7.49 EUR = CHF 9.13

I'm out 26 Rappen, and the part that bugs me the most is that Switzerland still doesn't have its own currency symbol.

If the experiment works and brings more companies into the DRM free model then I'm for it. If the likes of Bethesda and so on were to jump on board with GoG then maybe the competition would be enough for Valve to finally make Half-life 3 in reaction. I can't see a downside!
Posted March 05, 2014
avatar
skeletonbow: I just think it is highly unlikely, and that any money spent here was the result of a conscious calculated decision of the free mind of the purchaser with nobody forcing them to do it beyond their wishes.

But I could be wrong too.
avatar
CheeseshireCat: I can bet you're dead wrong there.

An awful lot of purchases are not calculated but impulsive. And selling stuff relies on workings of human mind to trigger that.
avatar
StormHammer: Just in time for 2015, when VAT must be charged at the rate in the country where the customer is based within the EU, and not at the rate (19%) where the business is registered for VAT (Cyprus).
avatar
CheeseshireCat: ... That... Will be one Hell to figure out based on IP geolocation :)
Impulsive buying isn't being forced against your will to do something. People should take responsibility for their own lack of self control. I too have made some impulsive buys, but that's my own doing and I accept full responsibility for it. Nobody twisted my arm or forced me to do it against my will, however it isn't interfering with my finances or life either.

I mean this in all seriousness - if someone truly does have a true problem with uncontrollable impulsive buying, they really should seek professional help about it. I've seen some people destroy their lives via impulsive shopping to the point where it was actually seriously harming them financially. That's a potentially very serious problem not to be taken lightly, and certainly not to be blamed on the prices companies charge for their goods. There are places people can turn to for help with shopaholic impulsivity where they can learn how to get it under control, and it's something to consider if someone has this problem to the extent that it interferes with their life/finances in a serious manner.

In no way are people forced to purchase things however, whether they feel they can control themselves or not.
Posted March 05, 2014
avatar
Gearmos: Edited: I have a perfect reply for your post. But the truth is that I can't say a word, since it is politically incorrect (taxes, banks and governs are involved in it). ;-)
Feel free to send me a private message if you like and I'll keep it as such. I'm personally not sensitive to issues of political correctness, but I can understand and respect you for not wanting to post things publicly which might be sensitive to others, especially if people are fired up emotionally about a particular issue at hand. Always a delicate line of balance to find. :)
Posted March 05, 2014
avatar
fronzelneekburm: Oh? In the realm of digital distribution, which companies would that be?
avatar
kaileeena: not in digital distribution unfortunately, well or people thought there was one until it turned out to be a complete and utter lie.
Anyhow I was talking about other businesses, I am mentioning that because people keep repeating that its ok for business to not have values or have values as long as its useful for them which might be true but any good business knows that if your customers are around because of your values, its dumb to throw them away and assume the customers will stay.
It strikes me as odd that GOG has gone from having values to suddenly having absolutely no values whatsoever because they softened up one out of multiple values. If you'll pardon me bringing religion into this, then it feels like a Christian denouncing Jesus as hellspawn because Jesus had sex out of wedlock. It feels like an overreaction. GOG has made a choice that hurt GOG's credibility, absolutly, and GOG has managed to not be overly clear in its communication on top of that. It is what it is but that doesn't mean they don't have any values at all. Just not quite the values we might have expected or at least not to the extent that we expected.

As far as business ethics is concerned, you're quite right that good business practice is that if you're relying on customer loyalty then doing things that offend your customers isn't particularly wise. Why? Because unhappy customers aren't loyal customers. They might take their money elsewhere. They might cross over to your competition. Do you see the pattern? The "good practice" here isn't actually based on any form of morality, but exclusively on a selfish consideration of profitability and risk.

Of course I'm not being entirely fair. There are obviously businesses that do have values. But either they find a niche and use their values as part of their business strategy or they'll end up being hampered in their struggle against businesses that don't have any. Why is WalMart destroying the competition? One, because logistics, and two, because screw WalMart employes and product quality. They cost control really well, they work their logistics like wizards, and they've got no values short of dollar green. But it works, doesn't it? People buy there instead of at the goold old grocer because WalMart has more stuff and lower prices.

Anyway, I don't really disagree with what you're saying about values, I'm just a bit depressed about why it's true.
Posted March 05, 2014
avatar
CheeseshireCat: That's odd. Why do I get only the USD price now then? O.o
avatar
AstralWanderer: The IP address you are using may be (mis)flagged as US - a visit to http://www.ipillion.com/ or http://www.ip-report.com/show-ip-address.php will provide geo-location data on your current IP (though GOG may not be using the same database - nonetheless if those sites have you in the Motherland, that should provide useful backup for a support ticket).
I had all of them in Russia -- mapping to St. Petersburg and Ekaterinburg on all services I checked (which was over a dozen).
avatar
Trilarion: To summarize: Faking or pirating something is bad.
...
avatar
Trilarion: Publishers enforcing regions is DRM.
That was priceless. On two scales (having little to do with each other by the by -- something being illegal doesn't make it morally wrong, nor vice versa), you graded something as "is DRM".
Post edited March 05, 2014 by CheeseshireCat
Posted March 05, 2014
avatar
StormHammer: I had not forgotten these details, actually, but tried to simplify it for other people to understand. Also, going into detail about the elasticity of costs and profit margins in relation to sales forecasts, supply and demand, and all of the other factors involved in price setting, is a discussion in danger of derailing this thread. The only reason why I looked into the VAT calculation was due to the fact that VAT was explicitly mentioned in the letter addressed to the community by the MD as one of the reasons for switching to regional pricing.
Fair enough. And yes, it probably would derail the topic if we went into the (in my opinion quite boring) details of unit pricing, but I felt it was worth mentioning that pricing isn't quite as simple as measuring production costs and then adding a profit margin before taxes. You sort of made it sound like GOG would definitely have a sufficient profit margin on the VAT-zone selling in itself, which I'm not sure is something we can simply assume to be true. It strikes me as entirely conceivable that they've held back on the post-VAT profitability in order to use "fair price" as a marketing tool. Don't know if it's probable, though.
Posted March 05, 2014
avatar
StormHammer: Thanks for your explanation, but I already know how VAT is calculated and paid. ;) Perhaps I wasn't very clear in my previous post. :( I was not trying to infer that all European companies could reclaim all of the VAT all of the time. I did say that they could reclaim VAT if necessary, i.e., following the usual VAT calculation rules:

If VAT charged - VAT expended leaves a surplus in a quarter, that is paid to the government.
If VAT charged - VAT expended leaves a deficit in a quarter, that is reclaimed from the government.

The reason why I say European developers/publishers are not really affected by VAT is because they would already have set their prices (costs + markup) at a level to give them an appropriate profit margin. The VAT is simply added on afterwards to charge to the customer. The VAT should not eat into their profit margin unless they have done a poor job calculating their other percentages.

For example, when GOG.com (and their partners) set a price of $9.99 for a game, the 19% VAT that is part of that price should not impact their profit margin, because they already accounted for their costs + markup in the other 81% of that flat price. The real price of the product is $8.39, and the VAT ( $1.60 ) is an addition to form part of their VAT calculation for the quarter. Neither GOG.com or their developer/publisher partner get to keep that VAT - so it does not affect either company's profit margin.
The developers would already have set their prices at a level to give them an appropriate profit margin if they would only sell in EU. In this case they know that for every sale they have to charge VAT, true.

But the developers KNOW they will also sell in other countries (mainly US) which from they will not have to charge tax (VAT). They know that sellig outside EU at the same price the income for every game will be higher (because there is no VAT). Probably the number of copies sold outside EU is even higher than those sold in EU.

So bearing this in mind they set a price where the income from EU is lesser than they want because they know the income from sales from outside EU will be higher. The average from all the sales should be the one they consider appropriate. If they would only took in account the sales from EU then the final price would have been too high and the game will sell poor.

They don't consider gaining 8,39$ (which is split with GOG) to be the real price (and the acceptable price). They shoot for a 9,something , accepting only 8,39$ from european sales becasue they know they'll get 9,99$ from non-european and the average will be the one they wanted.

avatar
GabiMoro: Sure they are affected, it's not the same if they get 7$ OR 7$ from which 1,59$ represents VAT.
They can not reclaim this 1,59$, eventually they will have to pay this VAT to the state.
avatar
StormHammer: Not really, because the pricing they set before applying VAT is the price they calculated would give them their profit margin. VAT is something additional (a percentage they allocated when deciding a flat price), and is just a standard way of doing business within the EU.
Like I said, it's a standard of doing business within EU when you only sell in EU.
What you said is used by IndieGala or IndieRoyale where the price you see is the price the developer wants. And when you want to pay you are charged an aditional tax (VAT) if you are european. In this case indeed the developer doesn't care if VAT is charged or not.
Posted March 05, 2014
avatar
CheeseshireCat: .... That was priceless. ...you graded something as "is DRM".
Thank you. I love being pricelsss. Although now I'm a bit puzzled. Even you graded them as DRM. I specifically meant these bullet points of yours:

* A publisher creates a region lock/DRM that allows games bought in region B to only be played in region B.

* A publisher creates a region lock/DRM that allows people in region B to only buy games for region B, which can only be played in region B. Not allowing those people to buy games playable anywhere at a higher (region A) price.

I fully agreed and added that whenever the publisher enforces such things this is DRM. A technical region lock is DRM.
Not a big deal really. It should be self-understood.
avatar
jtsn: Steam has an included store operated by Valve, but you are not forced to buy your Steam games from there (in my case, most of them are from the Humble Bundles). Steam keys are sold around the world in numerous currencies, offline and online.

Publishers still compete with pirates in the digital world. The more software piracy inside a region, the better the deal for customers. That's the sad truth, just have a look at Russia...
avatar
CheeseshireCat: I would say it depends not on the amount of piracy but on average expendable income in the region. ...
I would say it's both and more. Increase the price and piracy will always increase. Increase piracy and at some point the price will drop.

The regional price is probably be determined by a bunch of factors including: regional purchase power, piracy levels, taxes, personal opinions of the responsible persons, price levels of the competition and traditional focus on that market.

For example neglected markets like Slovenia or Africa seem to get very high prices although expendable income is rather low. In Norway, Switzerland or Japan the expendable income is rather high and piracy is probably quite low but still the price is not high, so maybe it is the personal opinion of the responsible persons there that matters most.
Post edited March 05, 2014 by Trilarion
Posted March 05, 2014
avatar
GabiMoro: But the developers KNOW they will also sell in other countries (mainly US) which from they will not have to charge tax (VAT). They know that sellig outside EU at the same price the income for every game will be higher (because there is no VAT). Probably the number of copies sold outside EU is even higher than those sold in EU.

So bearing this in mind they set a price where the income from EU is lesser than they want because they know the income from sales from outside EU will be higher. The average from all the sales should be the one they consider appropriate. If they would only took in account the sales from EU then the final price would have been too high and the game will sell poor.
Thank you for taking the time to clarify your point, and I now have a better understanding of what you were trying to say.

I will certainly accept that the scenario you have outlined could and probably should have been the case, but neither of us can be absolutely certain it is what transpired without access to specific sales data and the internal workings of the companies in question.
Pages:
1
75
150
225
300
328
329
330
331
332
368
This is my favourite topic
Community
General discussion (archive)<b>Letter from the M.D.</b>: About Regional Pricing(5517 posts) (5517 posts) 
(5517 posts)