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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 March 01, 2014
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Ichwillnichtmehr: The main argument for regional pricing is: "People go along with it"
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adamhm: The main argument is that publishers have agreements with local distributors with regards to retail pricing. If they don't abide by the terms of those agreements, then the affected distributors will refuse to carry their games, resulting in the loss of both sales and exposure, and possibly with the publisher getting sued like CDPR did with TW2. I've already gone over this point numerous times before.

Also, "people go along with it"... then don't! Don't buy something if you don't like the pricing! This applies here just as much as anywhere else.
I don't like people being ripped off, and GOG.com was the same, until a few days ago.

But, if you are okay with it... then do it! Buy something if you like being ripped off! This applies here just as much as anywhere else.

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Ichwillnichtmehr: I was under the impression, that they build up their userbase by sticking to their core values, and not ripping off their customers, but I guess I was wrong.
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adamhm: They are sticking to their core values, for the most part (they're not giving up on fair pricing completely). It's more that they're having to adapt and compromise on something in the industry that they can't change, in order to make significant progress with something they can change and improve regarding their single most important value and "mission" of DRM-free gaming.
Abandoning one of their core values, is not "sticking" with it:
http://static.gog.com/upload/forum/2014/02/3458e93d6cbe631da932df1085a7aa436f8960c9.png
Post edited March 01, 2014 by Ichwillnichtmehr
Posted March 01, 2014
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Ichwillnichtmehr: I just don't see how capitulating to the industry standard, would change the industry standard.

Why would any publisher change their model now, when "everyone is doing it".

And just to add, everything you just said could be used as an excuse for the abandoning of DRM-free, and the keeping of fair pricing.
Capitulatihg won't change industry standard. Never has. Never will. Sticking to their guns might have eventually had some effect, particularly as the gaming world becomes more digital. Selling out will only help the publishers and destroy the rights of individual gamers even more, as we are already seeing with these new regional prices.

I suspect something a lot more shady going on here, because none of the 'explanations' GOG is making make any sense in the real world.

I'm guessing it will be one of two things.

a) An eventual move to DRM, with the same excuse used here -- it's the only way to 'grow' and 'keep GOG staff employed' -- as, what they are offering now ie: regional pricing isn't anywhere near enough incentive to get most big publishers on board as DRM is what they are all about.

b) GOG is positioning itself for a sale. Extreme changes in a company's philosophy tend to occur right before it puts itself on the market. Owners, of course, will say "No, we're never going to sell", when in reality they're already in talks with various purchasers. Happens all the time.
Posted March 01, 2014
Well the new AUD prices for classic games aren't too bad. I guess the slight increase in price accounts for the exchange rate, and if I'm able to pay in my local currency, I'm happy for the extra money to go to GOG instead of my bank.

However, in Australian retail, most games sell for twice as much as they do in the US or UK, with little or no reason (even GST and parallel import laws don't explain it). If new games on this site will also cost twice as much in AUD as they do in USD or GBP, Australian users who would like to purchase new games would be outraged. I could write pages and pages about that, but long story short, it's the reason why lots of Aussies are turning to digital distribution (and piracy) on the internet.
Posted March 01, 2014
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Ichwillnichtmehr: I just don't see how capitulating to the industry standard, would change the industry standard.

Why would any publisher change their model now, when "everyone is doing it".

And just to add, everything you just said could be used as an excuse for the abandoning of DRM-free, and the keeping of fair pricing.
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Bloodygoodgames: Capitulatihg won't change industry standard. Never has. Never will. Sticking to their guns might have eventually had some effect, particularly as the gaming world becomes more digital. Selling out will only help the publishers and destroy the rights of individual gamers even more, as we are already seeing with these new regional prices.

I suspect something a lot more shady going on here, because none of the 'explanations' GOG is making make any sense in the real world.

I'm guessing it will be one of two things.

a) An eventual move to DRM, with the same excuse used here -- it's the only way to 'grow' and 'keep GOG staff employed' -- as, what they are offering now ie: regional pricing isn't anywhere near enough incentive to get most big publishers on board as DRM is what they are all about.

b) GOG is positioning itself for a sale. Extreme changes in a company's philosophy tend to occur right before it puts itself on the market. Owners, of course, will say "No, we're never going to sell", when in reality they're already in talks with various purchasers. Happens all the time.
My guess would be with (a), they want to compete with Steam as now they are #2 digital store after collapse of Impulse but they forgot they are #2 because of people supporting their values not because of what they offer.

For (b) CDPR is making good revenue, I don't see any reason to sell a part of your company that is making increasing profit year after year, specially when the big company is very strong right now.
Posted March 01, 2014
high rated
Here are my compiled issues regarding this debacle. They don't strictly require staff input as they're not matters that can be changed by words unless there's a factual correction to be made. It doesn't mean that I wouldn't welcome a try, however.



I: Communication

1. Before any of this even started, GOG was basically waving its dick around by loudly proclaiming their everlasting commitment to fair global prices and ridiculing other distributors for succumbing to regional pricing. GOG used it as a means to get more customers on their side. In retrospect, it was false and exploitative marketing that resulted in a bigger customer base than GOG would have gotten with the fewer unique selling points that it now has.

2. The initial news about regional pricing was embedded into a post exclaiming how cool it is to get three new and "big" mystery titles and wrapping it up in "good news". It was an obvious and insulting attempt to confuse customers into accepting the change or remaining oblivious to its actual effects.

3. The regional pricing bomb was tactically dropped on a Friday when GOG could use the weekend as an excuse to ignore the community and hopefully wake up to find a calm and resigned forum come Monday. As a deliberate move it was very sleazy and calculating. If by some chance it was pure coincidence, it was incredibly bad form to leave the mess brewing over the weekend.

4. Concerned users rightly pointed out that GOG had betrayed one of its core values. Videos that the users found clearly proved that GOG had not long ago aggressively touted its flat pricing model as a unique selling point and called regional pricing an unfair rip-off. GOG promptly made one of the videos private as a desperate and naïve attempt to prevent anyone from seeing it. Needless to say, that was extremely disrespectful towards everyone.

5. In Mr. Rambourg's letter, my biggest gripes are the lines about the new classic game pricing policy, saying "We’ll do our best to make that happen" and "I'm making the promise that we will have converted our classic catalog over to fair regional pricing". He makes it seem as if making classic game prices unequal is an improvement over the current, flat pricing model, all for the customers' benefit. What's more, he's so concerned with "doing right by us" that he's ready to publicly shame himself and two of his colleagues if he doesn't succeed in it within the year. Personally, I find that sort of talk unforgivably condescending. Why does he speak of a change that negatively affects a large portion of the customer base in a way that makes it sound like an awesome improvement to have? A classic and most of all sleazy and disingenuous PR spin if there ever was any, and I detest the letter for it.

6. The letter failed to address actual concerns and arguments against the change, but in GOG's defense, its policy change is very much a hypocritical and indefensible betrayal from any except the "we're a growing business that wants to get more publishers in order to keep growing for growth's sake, principles and customers be damned" standpoint.

7. The staff implied that people who choose to do their shopping as Russian residents are "complete tools". As if the new publishers/developers weren't already massive tools themselves for charging roughly as much extra for the European "version" as the Russian "version" costs in its entirety? I suppose GOG is an entire toolshed, then, for allowing such avaricious pricing in its until recently fair-priced catalog. GOG itself has admitted between the lines (and very clearly in the past) that the pricing model for these new games is a blatant rip-off. Is it really the "Russian" customers then, who are the biggest abusers here? In the end, GOG and the publishers will still get their money at agreed share percentages, as opposed to none at all if the users instead resorted to boycott or piracy. Isn't it half the point of regional pricing anyway to get at least a little money from those who wouldn't otherwise pay at all?



II: Fairness

1. As far as I know, anyone who preorders one of the three regionally priced titles will get a free game, not just Europeans. This is a point for which I'd warrant the maximum font size if it was available! It's not exactly compensation for paying more if you would've gotten it anyway when paying in dollars or rubles! The free game is constantly and falsely used as an argument to give GOG some slack for the higher European prices, including by GOG itself!

2. Even if only Europeans were getting a free game, its value is much less than the appalling difference to the normal (American) price. Additionally, a free game is not worth much to the customer if the customer already owns or never really wanted that game in the first place.

3. Regional prices aren't fair to begin with, if by fair you mean that poor people get games cheaper. Russians, Poles and Pope Francis(?) get their games cheaper, everyone else pays the same or more than North Americans. That includes Africans, Asians, Latin Americans and Eastern Europeans. It can also be argued that rich countries also have their share of small-income people who are especially disadvantaged by any region-based extra.
Post edited March 01, 2014 by Selderij
Posted March 01, 2014
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Maighstir: The name WAS "Good Old Games", now it's simply just "GOG.com" (and has been for a while).
Yes, but if the cost of new games is publisher greed, then why bother with them?
Posted March 01, 2014
high rated
Continued...


III: Arguments for regional pricing

1. It's all in the publishers' hands. No, it was in GOG's hands to refuse uncooperative (or regrettably hands-tied) publishers from having their regionally priced games on the catalog.

2. We get cool new games! Great, except that those games were going to be available everywhere else anyway, and the price that we customers pay for that is that every deal on GOG is now a potential rip-off that we have to watch out for, something that we didn't have to consider before. We can't shop at ease anymore. To GOG, the price is a lower integrity, lower future bargaining power with publishers, lower revenue and lower amount of word-of-mouth marketing. The games have thus far been highly unimpressive compared to the price paid.

3. Value added tax steals GOG's or the publishers' profit. It's still unclear to me whether GOG even pays VAT to the countries where its transactions come from. The receipts we get certainly indicate no such thing except for a vague "all prices include VAT if applicable" which doesn't look very legitimate from an EU standpoint. Add to that the fact that GOG, a de facto Polish company, is registered in Cyprus, and we have a potentially tax-evading and money-laundering company making a moral point about taxes and other fees that might or might not be inflicted upon them. Of course, there may be some completely legit and above-board reasons to be registered specifically in Cyprus, but I haven't heard of any thus far. In fact, GOG is keeping really, really quiet about the whole Cyprus angle. All that aside, normally, as a company you'd want to take the VAT hit for the simple reason that otherwise the higher price would deter too many customers.

4. Regional pricing is fairer because some countries are richer and some are poorer. You can throw this excuse right out the window based on the prices that different regions have to pay and how those regions compare in median income, purchasing power, disposable money or even GDP per capita. Considering that most of Europe has less money to spend than Americans, the VAT argument is void also in this respect because it would be fair to charge less from Europeans in the first place.

5. "Fair local pricing" for classic games is totally fair because it's kinda flat. So flat is the fair way afterall as opposed to non-flat? Do you know what's even flatter? The dollar prices we've had for the last five years. There was no reason to change that. Europeans somehow get higher prices with classic games, too, and currencies will fluctuate. By the way, the arbitrary .49/.99 rule absolutely reeks of psychological manipulation. It's basically saying 5 dollars and 100 cents to fool a customer into thinking that it's a lot less than 6 dollars, and you can't even deny that because that's literally the only point.

6. "Fair local pricing" is fair because you don't have to pay conversion fees. Might be a fair point for some, but others, especially non-euro users in your arbitrary euro region, have to pay the same conversion fees from their native currency to euros in addition to the European price hike. Also, some people's banks don't charge at all for currency conversion, so you're not exactly helping there either.

7. GOG is financially on the razor's edge and it has to start firing staff if it doesn't get more "AA+" titles. Good job pissing off your paying customers, then. Your financial well-doing is not exactly our concern, however, because if you're not making enough net profit, you're either spending your revenues unwisely or your business concept just isn't economically viable. You decided to build your business upon customer satisfaction, and it's your concern, not ours, to live up to it while staying afloat. Mind, it's not mandatory to grow every year as a business, and puffing up your organization in anticipation of ever-rising revenue is going to backfire at some point, and keeping your head cool about it is your responsibility. In any case, your public fiscal reports indicate that you've been doing extremely well with your old and independent games catalog and flat prices, doubling your revenue and net profit in a single year, with last year being your best one yet. That leads me and others to believe that you're trying to falsely manipulate us with the arguments in question. If anything, pleaing to a shaky financial situation will only make your customers nervous about whether they should throw their money at a company that may disappear at any moment and is using its employees as moral hostages.



IIII: Conclusion

There was a limited number of reasons for people to favor GOG over other distributors. A big and the least affected one was the DRM-free aspect, although trust in its continued inviolability is now shaken for many. Two other major reasons were better prices and goodwill towards a customer-friendly company. Those two reasons are all but gone for those who were negatively impacted or otherwise insulted by the regional pricing scheme and its handling by GOG.

Speaking of DRM, as important as the DRM-free aspect is for GOG's identity and as the store's sole remaining principle, an unknown percentage of GOG customers don't value it so highly, myself included. As difficult as it is for some to admit, Steam's own DRM is in practical terms – for a non-traveler with an internet connection – as unobtrusive as it can get: all you need is a client running in the background for most games (while some don't need it at all), and you can play offline, or install and play your games on another machine. Steam also has prompt automatic updates which can be a decisive convenience with new games. The aforementioned unknown percentage of users is going to look at other things than DRM when they try to decide where to buy a game, and they'll be finding plenty fewer reasons to stick with GOG.

I wish that GOG would make a U-turn regarding the dropping of flat pricing, but I know that they're fairly committed now. GOG is just going to have to accept the loss of business from certain, not so minor customer segments.
Post edited March 01, 2014 by Selderij
Posted March 01, 2014
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Matruchus: They said theyl leave it open thill monday.

Going to bed. 00:35 now here.
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kaileeena: So they ll close it on Monday as if they answered all the questions, right :P Man they are getting cheaper and cheaper
I don't think they've really answered any of the questions in a satisfactory way. But, I think that in and of itself speaks volumes for how little they think of their customers these days and I probably won't be buying any more games here unless they fix things.
Posted March 01, 2014
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Ichwillnichtmehr: I just don't see how capitulating to the industry standard, would change the industry standard.

Why would any publisher change their model now, when "everyone is doing it".

And just to add, everything you just said could be used as an excuse for the abandoning of DRM-free, and the keeping of fair pricing.
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Bloodygoodgames: Capitulatihg won't change industry standard. Never has. Never will. Sticking to their guns might have eventually had some effect, particularly as the gaming world becomes more digital. Selling out will only help the publishers and destroy the rights of individual gamers even more, as we are already seeing with these new regional prices.

I suspect something a lot more shady going on here, because none of the 'explanations' GOG is making make any sense in the real world.

I'm guessing it will be one of two things.

a) An eventual move to DRM, with the same excuse used here -- it's the only way to 'grow' and 'keep GOG staff employed' -- as, what they are offering now ie: regional pricing isn't anywhere near enough incentive to get most big publishers on board as DRM is what they are all about.

b) GOG is positioning itself for a sale. Extreme changes in a company's philosophy tend to occur right before it puts itself on the market. Owners, of course, will say "No, we're never going to sell", when in reality they're already in talks with various purchasers. Happens all the time.
You know, my first thought after reading this was: "I hope neither a or b happen!"

But after all this, after GOG.com dropped one of their core values in such a way("Good News!"), I don't really know anymore...
Posted March 01, 2014
low rated
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Bloodygoodgames: Capitulatihg won't change industry standard. Never has. Never will. Sticking to their guns might have eventually had some effect, particularly as the gaming world becomes more digital. Selling out will only help the publishers and destroy the rights of individual gamers even more, as we are already seeing with these new regional prices.

I suspect something a lot more shady going on here, because none of the 'explanations' GOG is making make any sense in the real world.

I'm guessing it will be one of two things.

a) An eventual move to DRM, with the same excuse used here -- it's the only way to 'grow' and 'keep GOG staff employed' -- as, what they are offering now ie: regional pricing isn't anywhere near enough incentive to get most big publishers on board as DRM is what they are all about.

b) GOG is positioning itself for a sale. Extreme changes in a company's philosophy tend to occur right before it puts itself on the market. Owners, of course, will say "No, we're never going to sell", when in reality they're already in talks with various purchasers. Happens all the time.
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kaileeena: My guess would be with (a), they want to compete with Steam as now they are #2 digital store after collapse of Impulse but they forgot they are #2 because of people supporting their values not because of what they offer.

For (b) CDPR is making good revenue, I don't see any reason to sell a part of your company that is making increasing profit year after year, specially when the big company is very strong right now.
Actually, the best time to sell is when your company is showing increasing profits as few people want to buy a failing business.

Look at the recent acquisition of What's App by Facebook for $19 billion. What's App was increasing its number of users, and thus its potential income, by hundreds of millions of users a month. That's when a sale was accepted, and at a huge windfall for the owners of What's App. If they'd left it another year, however, there's likely no way Facebook would have paid them anywhere near that kind of money as increasing numbers of users would have flattened off and, thus, so would potential revenue.

GOG has just seen its best year yet. Add on regional pricing with the 'selling point' to potential buyers that it's likely to see a much higher increase in profits in the coming years, and when would be a better time to sell? :)

When it is proven GOG's big gamble for increased profits was a massive fail, and that they are now no longer any different than a second-rate Steam with a miniscule number of customers?

Just sayin' :)
Post edited March 01, 2014 by Bloodygoodgames
Posted March 01, 2014
Though I'm repeating myself over and over, I want to point out something Selderij missed in his post.

There is a simple solution for the whole matter. If a game is locally priced, which in the end might be all games, the user should be able to see THAT it's regional priced and HOW MUCH other regions are paying for the same game. GOG can introduce regional pricing, no one feels cheated, all are happy.

This compromise gets ignored over and over and instead of just admitting to that compromise, GOG keeps on defending local pricing. It's a clear sign that the community offers this compromise and GOG doesn't even considers talking about it.
Posted March 01, 2014
From a business aspect for GOG itself, I can understand the desire to lure big name publishers to your virtual shelves. More money for all. That said, I have bought some classic games that I really enjoyed playing years ago, and would not have bought again until I saw them (in my opinion) fairly priced for a classic game. The flip side of this coin for GOG is that, they are now changing a successful model to something more mainstream, and widely used (despised) by gamers. While you may not want DRM content, and say that you will "never" have it; once you start making concessions for one value, there is no where to go but down for the rest of them.

GOG - R.I.P (sniffle)
Posted March 01, 2014
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Selderij: Here are my compiled issues regarding this debacle. They don't strictly require staff input as they're not matters that can be changed by words unless there's a factual correction to be made. It doesn't mean that I wouldn't welcome a try, however.

I: Communication

1. Before any of this even started, GOG was basically waving its dick around by loudly proclaiming their everlasting commitment to fair global prices and ridiculing other distributors for succumbing to regional pricing. GOG used it as a means to get more customers on their side. In retrospect, it was false and exploitative marketing that resulted in a bigger customer base than GOG would have gotten with the fewer unique selling points that it now has.

2. The initial news about regional pricing was embedded into a post exclaiming how cool it is to get three new and "big" mystery titles and wrapping it up in "good news". It was an obvious and insulting attempt to confuse customers into accepting the change or remaining oblivious to its actual effects.

3. The regional pricing bomb was tactically dropped on a Friday when GOG could use the weekend as an excuse to ignore the community and hopefully wake up to find a calm and resigned forum come Monday. As a deliberate move it was very sleazy and calculating. If by some chance it was pure coincidence, it was incredibly bad form to leave the mess brewing over the weekend.

4. Concerned users rightly pointed out that GOG had betrayed one of its core values. Videos that the users found clearly proved that GOG had not long ago aggressively touted its flat pricing model as a unique selling point and called regional pricing an unfair rip-off. GOG promptly made one of the videos private as a desperate and naïve attempt to prevent anyone from seeing it. Needless to say, that was extremely disrespectful towards everyone.

5. In Mr. Rambourg's letter, my biggest gripes are the lines about the new classic game pricing policy, saying "We’ll do our best to make that happen" and "I'm making the promise that we will have converted our classic catalog over to fair regional pricing". He makes it seem as if making classic game prices unequal is an improvement over the current, flat pricing model, all for the customers' benefit. What's more, he's so concerned with "doing right by us" that he's ready to publicly shame himself and two of his colleagues if he doesn't succeed in it within the year. Personally, I find that sort of talk unforgivably condescending. Why does he speak of a change that negatively affects a large portion of the customer base in a way that makes it sound like an awesome improvement to have? A classic and most of all sleazy and disingenuous PR spin if there ever was any, and I detest the letter for it.

6. The letter failed to address actual concerns and arguments against the change, but in GOG's defense, its policy change is very much a hypocritical and indefensible betrayal from any except the "we're a growing business that wants to get more publishers in order to keep growing for growth's sake, principles and customers be damned" standpoint.

7. The staff implied that people who choose to do their shopping as Russian residents are "complete tools". As if the new publishers/developers weren't already massive tools themselves for charging roughly as much extra for the European "version" as the Russian "version" costs in its entirety? I suppose GOG is an entire toolshed, then, for allowing such avaricious pricing in its until recently fair-priced catalog. GOG itself has admitted between the lines (and very clearly in the past) that the pricing model for these new games is a blatant rip-off. Is it really the "Russian" customers then, who are the biggest abusers here? In the end, GOG and the publishers will still get their money at agreed share percentages, as opposed to none at all if the users instead resorted to boycott or piracy. Isn't it half the point of regional pricing anyway to get at least a little money from those who wouldn't otherwise pay at all?

II: Fairness

1. As far as I know, anyone who preorders one of the three regionally priced titles will get a free game, not just Europeans. This is a point for which I'd warrant the maximum font size if it was available! It's not exactly compensation for paying more if you would've gotten it anyway when paying in dollars or rubles! The free game is constantly and falsely used as an argument to give GOG some slack for the higher European prices, including by GOG itself!

2. Even if only Europeans were getting a free game, its value is much less than the appalling difference to the normal (American) price. Additionally, a free game is not worth much to the customer if the customer already owns or never really wanted that game in the first place.

3. Regional prices aren't fair to begin with, if by fair you mean that poor people get games cheaper. Russians, Poles and Pope Francis(?) get their games cheaper, everyone else pays the same or more than North Americans. That includes Africans, Asians, Latin Americans and Eastern Europeans. It can also be argued that rich countries also have their share of small-income people who are especially disadvantaged by any region-based extra.
My Response: http://1.2.3.13/bmi/i.imgur.com/MIj6o.gif
Post edited March 01, 2014 by Ichwillnichtmehr
Posted March 01, 2014
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kroetenschemel: There is a simple solution for the whole matter. If a game is locally priced, which in the end might be all games, the user should be able to see THAT it's regional priced and HOW MUCH other regions are paying for the same game. GOG can introduce regional pricing, no one feels cheated, all are happy.
What makes you think that I don't feel cheated if I see that somebody gets to buy the same product for less money than I do?
Then I do know that I'm being cheated. Without that information I can only assume that I'm being cheated.
Posted March 01, 2014
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Selderij: Continued...

III: Arguments for regional pricing

1. It's all in the publishers' hands. No, it was in GOG's hands to refuse uncooperative (or regrettably hands-tied) publishers from having their regionally priced games on the catalog.

2. We get cool new games! Great, except that those games were going to be available everywhere else anyway, and the price that we customers pay for that is that every deal on GOG is now a potential rip-off that we have to watch out for, something that we didn't have to consider before. We can't shop at ease anymore. To GOG, the price is a lower integrity, lower future bargaining power with publishers, lower revenue and lower amount of word-of-mouth marketing. The games have thus far been highly unimpressive compared to the price paid.

3. Value added tax steals GOG's or the publishers' profit. It's still unclear to me whether GOG even pays VAT to the countries where its transactions come from. The receipts we get certainly indicate no such thing except for a vague "all prices include VAT if applicable" which doesn't look very legitimate from an EU standpoint. Add to that the fact that GOG, a de facto Polish company, is registered in Cyprus, and we have a potentially tax-evading and money-laundering company making a moral point about taxes and other fees that might or might not be inflicted upon them. Of course, there may be some completely legit and above-board reasons to be registered specifically in Cyprus, but I haven't heard of any thus far. In fact, GOG is keeping really, really quiet about the whole Cyprus angle. All that aside, normally, as a company you'd want to take the VAT hit for the simple reason that otherwise the higher price would deter too many customers.

4. Regional pricing is fairer because some countries are richer and some are poorer. You can throw this excuse right out the window based on the prices that different regions have to pay and how those regions compare in median income, purchasing power, disposable money or even GDP per capita. Considering that most of Europe has less money to spend than Americans, the VAT argument is void also in this respect because it would be fair to charge less from Europeans in the first place.

5. "Fair local pricing" for classic games is totally fair because it's kinda flat. So flat is the fair way afterall as opposed to non-flat? Do you know what's even flatter? The dollar prices we've had for the last five years. There was no reason to change that. Europeans somehow get higher prices with classic games, too, and currencies will fluctuate. By the way, the arbitrary .49/.99 rule absolutely reeks of psychological manipulation. It's basically saying 5 dollars and 100 cents to fool a customer into thinking that it's a lot less than 6 dollars, and you can't even deny that because that's literally the only point.

6. "Fair local pricing" is fair because you don't have to pay conversion fees. Might be a fair point for some, but others, especially non-euro users in your arbitrary euro region, have to pay the same conversion fees from their native currency to euros in addition to the European price hike. Also, some people's banks don't charge at all for currency conversion, so you're not exactly helping there either.

7. GOG is financially on the razor's edge and it has to start firing staff if it doesn't get more "AA+" titles. Good job pissing off your paying customers, then. Your financial well-doing is not exactly our concern, however, because if you're not making enough net profit, you're either spending your revenues unwisely or your business concept just isn't economically viable. You decided to build your business upon customer satisfaction, and it's your concern, not ours, to live up to it while staying afloat. Mind, it's not mandatory to grow every year as a business, and puffing up your organization in anticipation of ever-rising revenue is going to backfire at some point, and keeping your head cool about it is your responsibility. In any case, your public fiscal reports indicate that you've been doing extremely well with your old and independent games catalog and flat prices, doubling your revenue and net profit in a single year, with last year being your best one yet. That leads me and others to believe that you're trying to falsely manipulate us with the arguments in question. If anything, pleaing to a shaky financial situation will only make your customers nervous about whether they should throw their money at a company that may disappear at any moment and is using its employees as moral hostages.

IIII: Conclusion

There was a limited number of reasons for people to favor GOG over other distributors. A big and the least affected one was the DRM-free aspect, although trust in its continued inviolability is now shaken for many. Two other major reasons were better prices and goodwill towards a customer-friendly company. Those two reasons are all but gone for those who were negatively impacted or otherwise insulted by the regional pricing scheme and its handling by GOG.

Speaking of DRM, as important as the DRM-free aspect is for GOG's identity and as the store's sole remaining principle, an unknown percentage of GOG customers don't value it so highly, myself included. As difficult as it is for some to admit, Steam's own DRM is in practical terms – for a non-traveler with an internet connection – as unobtrusive as it can get: all you need is a client running in the background for most games (while some don't need it at all), and you can play offline, or install and play your games on another machine. Steam also has prompt automatic updates which can be a decisive convenience with new games. The aforementioned unknown percentage of users is going to look at other things than DRM when they try to decide where to buy a game, and they'll be finding plenty fewer reasons to stick with GOG.

I wish that GOG would make a U-turn regarding the dropping of flat pricing, but I know that they're fairly committed now. GOG is just going to have to accept the loss of business from certain, not so minor customer segments.
My response as well: http://1.2.3.13/bmi/i.imgur.com/MIj6o.gif
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kaileeena: My guess would be with (a), they want to compete with Steam as now they are #2 digital store after collapse of Impulse but they forgot they are #2 because of people supporting their values not because of what they offer.

For (b) CDPR is making good revenue, I don't see any reason to sell a part of your company that is making increasing profit year after year, specially when the big company is very strong right now.
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Bloodygoodgames: Actually, the best time to sell is when your company is showing increasing profits as few people want to buy a failing business.

Look at the recent acquisition of What's App by Facebook for $19 billion. What's App was increasing its number of users, and thus its potential income, by hundreds of millions of users a month. That's when a sale was accepted, and at a huge windfall for the owners of What's App. If they'd left it another year, however, there's likely no way Facebook would have paid them anywhere near that kind of money as increasing numbers of users would have flattened off and, thus, so would potential revenue.

GOG has just seen its best year yet. Add on regional pricing with the 'selling point' to potential buyers that it's likely to see a much higher increase in profits in the coming years, and when would be a better time to sell? :)

When it is proven GOG's big gamble for increased profits was a massive fail, and that they are now no longer any different than a second-rate Steam with a miniscule number of customers?

Just sayin' :)
The rational part of me really appreciates your thoughts on the matter.

The emotional part of me really doesn't :'(
Post edited March 01, 2014 by Ichwillnichtmehr
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