So, developers in the USA should simply not sell their games overseas then? Let's say an indie game costs $10 in the states. In Thailand, the average monthly income is ~$220. So someone in the US could work 1 hour and buy the game, but someone in Thailand would have to pay more than a day's salary for the same game!
The game is supposed to be affordable! Regional pricing can help a developer charge less for a game in a country that has lower standard of living. Maybe $1 instead, so it's more like 1 hour of work for the average person. But if US consumers can buy the game for $1, why would they spend $10? If US consumers did that, the developer would suddenly be making 10% or less after fees. There is no way they could profitably develop games after taking that kind of hit.
I'm not saying you're not wrong with it being futile to keep separated, but there is a very good reason for it.
This is ultimately the reason I used to pirate software as a young person.
I grew up in a poorer northern UK town. Chucking 50 quid at a PlayStation game was, let's call it "highly impractical". So me, and most of my friends, would burn CDRs and mod the consoles.
I think the correct answer to this, ultimately, if you care about having the widest audience, is charging for the product, but not putting _too much_ effort into piracy being impossible.
The middle classes will still buy your stuff because it's the polite thing.
Not only polite, but easy. If you could afford the game, you buy it, it downloads, you play. Piracy is more work, but if you value that time spent as less than the price of the product, of course you will pirate.
I used to pirate a lot of music. I'd have to find the title on some tracker, download the album for a couple hours (shit internet at the time), import it, deal with metadata, deal with album artwork, import into my device. It was a lot of work, but I couldn't afford $1 a song! I definitely can afford $10 a month though, and spend probably 2 seconds finding a track on spotify to play it on any and all devices. Worth it. Easy. Affordable. But if you charge too much, don't be surprised when your users are willing to take the long way and get your stuff for free.
Nothing will ever be uncrackable, so why waste expensive engineering salary on the digital equivalent to the war on drugs?
The demographics that can't afford the game (e.g. certain overseas countries, or low-income individuals even in domestic markets and otherwise-more-affluent overseas markets) will be out of luck only until the game goes on sale (whether temporarily or permanently; older games tend to be cheaper than newer games).
In other words: setting a lower pricepoint for specific countries to attract more sales in those countries is a pretty major footgun when it comes to actual revenue from those sales. Better to keep the price even across all markets, then only drop the price if you want more sales (and in smaller increments than "here's a 90% discount just because you happen to be in Thailand"). Trying to establish different prices for different locales is a premature "optimization" at its worst.
The actual reason for separated national markets was that selling to a national market once upon a time involved actually getting a physical good (e.g. a cartridge or optical disc) to a customer in a different nation; for most game developers, it's easier to go through a distributor for that particular market than to try to tackle all the logistics themselves. Nowadays there's no physical good being exchanged, so there's really no point to dealing with that kind of market segregation.
Not everyone in Thailand is broke. There might be a lot more broke people in Thailand than in the U.S., and on average the sprawling land area of Thailand has less wealth than the land area of the U.S., but I bet there are a lot of people in the U.S. who, like their Thai working class counterparts, also can't afford a $60 game. Now the working class of Thailand gets a game that's right in their price bracket while the working class of the U.S. does not.
Averaging an entire countries wealth to set a price worked pretty nice for the people of Thailand in this example, but obviously burnt the poor in the U.S. pretty bad. If your goal is to get your game into the hands of the most customers, consider offering 'regional' pricing for all the homeless in central park who might live within a couple dozen feet of the most expensive apartments in the world. It turns out regional pricing kinda sucks because wealth isn't distributed evenly across any region.
The economy is global, not regional, there are rich and poor people everywhere in differing and ever changing proportions independent of how borders might be drawn on the map. If you want to make it affordable to an economic bracket, go ahead and lower your price or offer low income credit or something, don't make it so you can't buy your digital game while connected to the internet in an arbitrary country.
I think this is the fundamental point where you'll win or lose people.
If it's a game made for fun without income being a goal: yea, totally. And many of these are free for that reason, or "sold" on name-your-price platforms.
If the game was made to make money: hell no. Games are not supposed to be affordable. Games are supposed to be profitable to the creator, the price is set to optimize that. If regional pricing cuts into it (i.e. due to resales) more than it makes, it should not be done. "Access to game X" is not in any way a right or necessity, there's no obligation to make it available everywhere.
A seller want to sell their good to every buyer at exactly the highest price that buyer is willing to pay. The seller can't do that if they give everyone the same price so they look for ways to segment the buyers into groups which have similar valuations and charge each group a different price.
If you pay attention, most pricing schemes are about market segmentation. Region locked items is obviously one. Most digital goods are sold at prices that decrease over time: it's basically segmenting the market by time. Buyers with high valuations buy first, those with lower valuations buy later, etc.
And honestly, I think its a shame, because regional pricing makes a lot of sense.
Selling a AAA game at 2 bucks a pop in the US doesn't make sense. You have to get back the 10s of millions of dollars you spent somehow (if the game is good!).
But that locks out underprivileged markets, who can't afford 60 bucks games. They'll likely just pirate it then. Regional pricing is a nice solution to that. Unfortunately then people abuse it.
That's why we can't have nice things.
"What the...? Why am I paying $60 for a game when I can buy the same game in Nigeria for $5!"
vs.
"Aw man, there's a cool Japan-only Fire Emblem game that I can't play because it only works on Japanese consoles..."
Good for the goose, good for the gander.
As for why we shouldn't be able to, there are two good reasons:
1. If everything is priced at a regular price, no one in "underprivileged" markets will be able to afford those games, so cue piracy.
2. If everything is priced at the price point of "underprivileged" markets, it makes zero sense to produce those games, as it would mean that the company will surely go broke by doing so.
If not directly, they still benefit indirectly from any downward pressure put on wages.
Piracy is inevitable. No matter how low of a price you set for it, there will be countless people who'd rather have it for "free".
It's actually fairly difficult to just buy labor from another region without doing the equivalent of "buying a regional console" (i.e. building a local office/factory, where people actually speak the right language).
Start at $69.99, in English only. Then add language localizations in order of decreasing mean disposable income for native speakers. Gradually drop the price by $5 per quarter, but also randomly put it on sale for 25% off for 36 hours at a time, to catch the folks who wishlisted the game and are watching the price.
Rich folks buy at $70 and play it right away. Poor folks wait 3.5 years and then get it for $5 .
Why would "poor folks" in other markets wait?
They could always pirate now, and then buy a catch-up license at a price they could better afford at a later time.
Poorer people have to wait, because the developers have high rent and daily expenses, and price discrimination helps the supplier capture enough of the trade value of their good that they can pay those expenses.
A software program is unlikely to have repeat buyers. It's not like corn or toilet paper, where you use one up and buy another. So, if you hypothetically line up every potential buyer by the price they are willing to pay, you can capture the maximum value of trade by walking down the line and selling one copy to each person at their price. Once you sell one copy to everyone in line, you're done. But buyers keep their price secret, or lie about it, and paying your walking salesperson would eat up all that extra money. So instead, you put your price up on a big board, decrease it over time, and when it drops below a buyer's price, they just step up to the counter and purchase.
Paying more allows a customer to buy earlier. Waiting in line longer allows a customer to pay less. How is this unfair? And if it is unfair, how is that the supplier's fault, rather than being inherent in the copyright system?
Here in Norway we travel to Sweden and buy mainly meat, tobacco and alcohol, due to lower taxes.
In 2017 it was estimated[1] to be about 2.6 billion USD worth. This is in a country with some 5.5 million inhabitants, many of which do not participate in this due to distance to border.
Businesses and the government aren't too thrilled about this, for obvious reasons.
[1]: https://www.svenskhandel.se/nyhetscenter/pressmeddelanden/20...
If users can't or won't be able to afford it, they will pirate it. This cna be tempered with pricing strategies.
If it can't be purchased, people will pirate it (e.g. region locked games, even w/o localizations, or delayed releases by market) - pricing doesn't matter here - if users can't get it, they will just pirate it, sometimes especially because they know it's going to be released later, and that decision by the studio has made them feel second class.
If it's no longer available (abandonware, game developers that have gone out of business, etc) then people will pirate it. There are lots of platforms that are thriving on nostalgia right now because people want to pay for supported, working stuff. (For example, the resurgence of the Baldur's Gate and related games updates)
Take a look at any $streaming_service threads and you will see that anything that interferes with streaming service catalogs or pricing will yield shouts of "Arr" and people clearly stating they will pirate shows or use gray market streaming sites.
It's anecdotal but I suspect that most folks on this site are more comfortable with pirating movies or music, but often draw the line at video games because it is easier to relate to the development work done to make video games (even though modern blockbusters movies often have a lot of software development associated with them as well).
Plus in 5 years the company might not have the same sales and marketing teams, management or even owners.
I'm struggling imagining who can afford the equipment to run 'the latest tech' but will not be able to afford a game that uses it. I strongly suspect 'the latest tech' is important mostly to the privileged markets.
You might be right about the marketing. A hit game will probably be just as profitable later; maintaining or growing its own hype. The bigger problem I think is for games that are flops. Companies probably want to sell as many copies as possible before word gets out; and greatly staggering releases will result in a lot fewer copies being sold as you suggest.
Tech just doesn't make the gains it used to any more.
Back in the 90's a 4 year old machine would be lucky to even start a new released game, let alone run it at close to max settings.
Indie markets work well with that model though. I've seen many indie games launch English-only and adding translations later on to sell to more users.
If I'm homeless in SF or NYC--despite being some of the wealthiest cities on this continent--maybe I should get that $2 regional pricing too rather than piracy (what me and plenty of others resorted to while living broke in uni).
If you want to sell your game to a wider market, don't go out of your way to make it harder for the wider market to access your product, just lower your price.
You'd be buying PC games as a homeless person?
The reason regional pricing makes sense is that costs for most things are lower in other regions, like rent and food, and therefore so are the salaries. That would mean a $60 game can cost as much as half a month's rent.
If you want more low income customers, set the worldwide price of your product lower. Don't arbitrarily ban entire countries from buying your digital game.
Why not get a copy in Nigeria, have a server hosted there, and just play it streaming.
Also out of order packets and drops.
> You have to get back the 10s of millions of dollars you spent somehow (if the game has a big budget!).
I did NOT mean that you spent 10s of millions of dollars to make any good games. That would be silly in a world of Hollow Knight, Cadence of Hyrule/Crypt of the Necrodancer, Dead Cells, Gungeon and more, where indie games are kings.
I got downvoted already, and honestly could've let that comment be, it's not that big an issue, and I think we see it similarly.
Also, I'm posting this to clarify my stance and remove any doubt.
...the word came into mind: I was nitpicking. Yes, I should've let that be. Cheers!
I tend to agree in general (also for films, songs...), but for expensive items like games the problem becomes that you then have to charge, in developing markets, prices that are simply too high. That incentivises piracy, which then eats up profits from your developED markets too.
For example, you can buy a Russian key for 50% off, but it is a Russian version of the game with the audio/text to match.
But if you buy physical copies, then the Japanese market might be cheaper simply due to the greater supply of older games, and potentially the currency conversion of newer games.
There are a couple of Russian games out there with supposedly very good Russian VO, like the Stalker or Metro series.
(Well, OK, the copies of Fallout and StarCraft I had were both legit.)
Guess it's another instance of "why we can't have nice things".
I want people all round the world to play my games, not just those fortunate enough to be born where their dollar is strong enough to make it affordable.
Disclaimer: I don't really know anything about exchange rates or value of money across borders. Cost of living and average income rates are complex!
Note that lowering the price during a sale, and lowering the price over time are other forms of price discrimination. (Here, the seller wastes the buyers’ time in exchange for a monetary discount, so people with less money and more time tend to get bigger discounts).
Also, different regions have different costs of living, even when the currency is the same. In the Bay Area, a game on steam costs as much as renting an apartment for a few hours. In the middle of the country, that same game costs almost half a week’s rent for a comparable apartment. From that perspective, it really doesn’t make sense to charge the same amount, even in the same country.
For physical goods, the solution is simple: just charge different amounts at different stores, and hope the cost of shipping prevents arbitrage.
Also, for some reason people hate special discounts and coupons less than regional pricing.
I wonder if steam could start selling points in the form of account-locked gift cards that are discounted differently in different markets. Maybe people would hate that less. They’d need better support for blocking mass game reselling across regions, but I’d guess that can be fixed with fraud detection.
The same dynamic is true for markets generally and even economic thinking; truly sad facts!
One of the biggest problem with resellers is review-key fraud
1234-5678-90AB-CDEF
1234-REVIEW-5678-90AB-CDEF
3141-PLLANG-5926-5358-9793
--
[0] - So that you can't derive a key of one type from the key of another type.
For Void Bastards we often have multiple branches going out to different groups for different things.
This way, the player immediately knows he has bought an improper key, and can address this with the store it was bought. A journalist would not mind such a pop-up.
If the game stops working without warning after a few months, angry reactions are to be expected.
Key reselling from giveaways could be mitigated if we somehow figured out a way to make keys expire shortly after the giveaway period (ie, keys expire 5 days after the giveaway ends).
I'm not aware if Steam or other marketplaces have this functionality yet.
One thing that many comments here aren't mentioning is that some regions have differing requirements to be able to sell in that zone. A common issue is the rating (MA, PG, R, etc). Once, when about to release in Germany (mid 90's) we had to change red blood to green in order to not get rated as R.
So it's not as though the developers can publish without strict regional forethought, so they may as well use a pricing model that satisfies the cost of living.
That would rapidly kick G2A off the credit card processing networks, assuming the allegations in the article are true.
No. This doesn’t make sense with digital goods. Everything is a copy. Nothing is being re-used. A second person is merely making an additional copy of bits. That person may not even download/copy the same bits as the first person if the game was updated.
Taken to the extreme a middleman exchange with infinite resells and instant transfers of ownership could limit total sales to peak concurrent users. I mean why should an American and a European each buy a license? They could just share a license and instantly transfer it back and forth when they want to play!
Gamedevs participated in bundles because it generated extra cash. Steam keys were an obvious way to distribute. A harsh lesson was learned. Going forward the fix is easy, don’t distribute keys. Assign the key to an account at point-of-sale.
The other lesson is to stop selling games and go free-to-play. It solves this problem completely! I hate f2p. But there’s a reason the industry is moved in that direction. Le sigh.
Downvote all you want. But digital goods which are infinitely reproducible and instantly transferable do not and should not follow the same laws as manufactured widgets. They’re covered by copyright law. And someone buying a copy of a thing does not grant them the right to let someone else make a copy of some vaguely similar thing 5 years later.
This can be mitigated by limiting transfer licenses by some days, i.e. after transferring you need to wait one month to transfer ownership again.
However, this wouldn't even be necessary. Just a process that is boring enough to do would avoid most non-malicious abuse. For example, to transfer the user that current has ownership of the key must went to a process of disowning the key first.
There is already better ways if you want to share your library with some trusted people: i.e. Steam's family share.
I believe that coupons should not be transferable once redeemed. Selling an unredeemed coupon is, of course, acceptable.
1. Actual second-hand reselling of bought games
2. Tactically/strategically reselling keys legitimately acquired cheaper (giveaways, review keys, differentiated pricing between markets)
3. Fraud and money laundering (e.g. stolen credit cards)
I think that the reasonable position and that of anyone not being incentivized to say otherwise would be that 1 should be allowed while 3 is already illegal and should be cracked down on.
On the 2 my position is that this is not something that should be addressed by regulation but that it's the responsibility of the publisher. Don't want to see review keys ending up on second-hand sites? Put in restrictions (like limited time) on those licenses. If the second-hand market for keys you ave away for free ends up eating at your margins, maybe you gave away too many free keys or price too high.
As for regional pricing, IMO it's both counterproductive and futile to keep national markets separated.