FraterPerdurabo: I agree - but how great are the differences, and which countries are you comparing? In Europe we pay about 25-30% more than you do in the US, due to taxation (even more in the UK). Personally, I don't really care if I pay 30 or 40 pounds for a game because I buy them so infrequently, and I probably wouldn't buy more games if they cheaper (except for those awesome 2-3 pound sales).
Keep in mind that there are also all kind of other nighmares that come with distributing abroad, i.e. hiring foreign lawyers, customer supper in different languages, simple costs of transport, etc.
And in the end, there will always be parallel trade.
StingingVelvet: I don't know much about European economies, or really any but my own. I know you can't just change their money into dollars and then complain, it depends more on average wages and cost of living.
What I do have Aussies tell me is that their cost of living is roughly the same as ours, as are their average wages, and yet they pay double what we do for games. I'm sure import taxes for boxed copies and taxes has something to do with that, but surely not double?
Also I can't imagine Brazil has a higher average wage than the US, yet this whole conversation started with someone living there saying their games cost $120.
That's fair enough - 120 is an overkill indeed.
However, do keep in mind that retailers buy the game from the developer in the first place. The price they sell it for afterwards is almost entirely up to them. In the US, retail price maintenance is no longer a per se competition law infringment (it can now be justified), whereas it still is a hardcore offence under EU competition law (it can be justified, but the burden of proof is extremely hard). Here the original company can recommend a selling price, or set a maximum resale price, but it is not allowed to set a minimum resale price. Therefore, a game going for 120 in a country is unlikely to be due to the pricing practice of the developer / publisher, but rather due to the retailer.