Ed Husic On Video Game Prices -- High Australian Wages Are A 'Massive Cop Out'

Yesterday it was announced there would be a Federal Inquiry into the price of digital software in Australia, to discuss why Australians are pay inflated prices. We spoke to Ed Husic, the MP who has been consistently raising these issues in Parliament. According to him, claims that high Australian wages are to blame, are a "massive cop-out".

"I'd be surprised if US companies are adjusting prices for the Australian market based on the higher wages we have here," he said, speaking to Kotaku Australia. "I think that's a massive cop-out. It's more to do with the relative weakness of the US economy. I think they figure they can make up for losses at home with higher prices in this country.

"They think they can get away with it here, but not in the US."

Despite the fact that Australians pay more for tech products compared to those in Europe and the US, retailers such as Harvery Norman and GAME, appear to be struggling. We asked Ed Husic if that struggle was indicative of a larger problem. Should we really be paying less for products when retail is clearly having difficulties?

"Retail is going through a transition period right now," he said. "Every so often that happens, there is a new development and they have to adjust. Retailers are going to have to be quick to adapt to online shopping, and realise that the whole thing is more transparent."

The upcoming inquiry is designed to investigate the price of digital products in Australia, and gives publishers the chance to explain why we are being charged an inflated amount. We asked Ed what he hoped to hear from local publishers.

"Well, I hope that they understand that there are a lot of consumers who are interested in this issue," he said. "What I'm hearing from people is that this is something that's been bugging them for a long time. It has taken a while to get to this point and I hope they take this opportunity to realise what a big issue it is.

"If they want to be ahead of the game they should take this opportunity to explain their pricing in Australia or, better yet, reduce those prices."


Comments

    I earn too much money!

      The thing of it is though. It's not that we earn to much money. It's that our minimum wage starts off higher. Therefore the barrier of entry isn't seen to be as high as it would for a person living on minimum wage in the US.(Since on minimum wage there you have some serious issues, Over here it's enough to get by moreso if your in a location that doesn't have high rental costs)

      Difference then becomes that US wages often rise faster than our own, in part because they start off lower. I know a couple of people who moved to america as part of their career. They earn 10-15k less(Without conversion) than they did here. But they don't have the higher cost's of everything that we have here. They all boast that even with the Lower US salary they are able to store more money away in saving 's than they could while working the same job here.

        You're exactly right. What good is earning more money here when after rent, utilities, food, petrol and insurance you've got two fifths of FA to spend on anything else.

          Personally it needs to change without effecting our lifestyle(wages). It all comes down to greed, they cant sell as much here so they make products more expensive to make up for the lower sales here compared to europe and the U.S. plus the U.S dollar is less then ours so why r the prices still the same here.... Again it comes down to greed. Its all about the money these days and not the consumers, for example the iPhone 4 is easy to break the front and back screens because apple wants us to break our products so that we end up spending $100 to get it fixed.

    Moreso than R18+, it's impossible to get too interested (personally) due to the current political climate in this country.

    Could this actually be an election issue at some point?

      IF gay marriage cant even be a serious election issuethen this has no chance. Seriously, the first major party (labor or liberal) to fully support gay marriage will get a large vote push.

        thyco1 i think you over estimate the value of the gay vote. A lot of people in this country do not support legalising it. A lot of these people come from seats that are very crucial in an election. Queensland has many seats like this.

          Its not just gay people who'll vote for gay marriage though, its sane people too.

        The thing though, is that there is still (sadly) a significant portion of people agreeing that they shouldn't be allowed.

        I haven't seen anything near that being pro-high tech prices.

      No. Not a chance. Be lucky to get one or two news items on the topic over the life of the inquiry.

      Only chance is if people like Gerry Harvy get vocal about it, (and in the negative) that the mass media will take note.

    Well let's hope we see some kind of reduction in prices. I think these guys shoot themselves in the foot by having such high prices. People will turn to piracy if they think they are being ripped off. That doesn't justify piracy, but it is an excuse some people happily make.

    We need to get digital content at the same price as anywhere else and at the same bloody time as everywhere else. Few people will wait months for the new season of their favourite show to get to ituneswhen they can go and download show.title.S01E01.720p.HDTV.x264-group.mkv or whatever.

      Agreed, I find it totally infuriating that we can't get netflix etc. All we can do to get the latest shows is turn to torrent sites. What sort of spastic business model are content publishers running where we can't get the latest content when there is demand?

    This guy is a hero. More gamers should go into politics

      Oh yeah, because question time doesn't resemble an Xboxlive message board enough already. : p

    The fact that some retailers may be struggling is perfectly reconcilable with Australian consumers' desire to pay less, because it isn't the retailers who are creaming the profits in this case, it's the publishers, distributors and other middlemen. In a sense Australian retailers and consumers are both on the same side in this.

      This! Rent,wages, electricity and franchise costs still have to be accounted for along with the 50-60 per game that your local EB/JBHIFI/Gametraders/ETC has pay for. Its why they go for used game sales more than anything these days.

        The Used Games thing you mention is utter BS. It is just as bad if not worse in the US and Europe.

        And Rent, Electricity, Franchise costs are all irrelevant when it comes to digital pricing. There is no reason for EA to charge 40 dollars more to buy the same 1's and 0's as someone in the US purely because they are located outside of the US.

        Since the sale is online most of the time they can avoid having to pay Tax on it. And as for download servers there is no reason they need to be in Australia. Sure it makes the game quicker to download most of the time. But last i checked if i wanted to pay 40 dollars to get the game quickly i could go down to EB/Game/JB.

          Digital prices are driven by the price at retail. What retailer is going to support a publisher that undercuts them through digital distribution?

          Retail is still essential in the promotion and distribution of games. Have never heard of a successful AAA launch that hasn't had the major backing of retailers which is why there can't be too big of a gap between digital and retail prices (although PC games are gaining more and more traction digitally).

            The Orange Box, Portal, Portal 2, Halflife 2 Episodes 1 & 2, Witcher 2, League of Legends, DOTA, HON, DOTA2, Counter Strike, Left 4 Dead.

            Advertising wasn't needed for any of these. Those games kind of sold themselves and all were/are primarily digital first and physical retail second.

            The issue is the very view you have taken - that no digitally delivered game can succeed. I guess the next question is how would these "AAA" titles fair without the huge advertising behind them?

              I'm not disagreeing with you Daveh - hence my comment about PC digital launches gaining more and more traction (the half-life launches paved the way for this in my opinion). The problem isn't spawned from these launches - its the large multi-platform launches (CoD, BF, Assasins) that rely on retail exposure to reach the heights that the company needs to survive.

            Except that most retailer's these day's don't bother to even attempt to sell me PC games.

            Hell while it wasn't regional priced for Australia, trying to buy Dead Island for a friend on PC last year resulted in me visiting 4 different stores on release day. Only to be told by 2 of them that "I was a retard for not playing on a 360 Uduhhh" and the other 2 that they had no plan's on getting the title in as they had no PC based pre-orders so obviously no one wanted it.

            And it becomes even more moronic if you look at say Borderlands DLC or Fallout 3/NV DLC both of which incurred the wrath of regional pricing on PC. While having no retail counterpart to even compete with in the first place.

            Hell there are some digital only games that originally had regional pricing on them for PC because the publisher is a greedy bastard.

        This...in this day and age where I can get something shipped from the US to my door in less than 5 days, can someone please explain why we still have to pay wholesalers and distributers ??? it is just adding a layer of cost to the retailers (and ultimately us) that we have to wear... seems a little last century.

      Yes. In fact the high prices here are probably a large part of the reason WHY Australian retail is struggling. It's because we can buy from overseas retailers for half the price of buying from local retailers.

      Bringing our prices to a level that are at least competitive with importing from foreign websites would give Australian retailers a fighting chance.

        if those companies would start spending more money on actually developing the game instead of on marketing, maybe those games would not sell more in the first year. But they will sell more in the long term through word of mouth. I mean some companies spend twice as much money on the marketing than they do on the actual game.

          Yes and this is why they're all so obsessed over week 1 sales figures because of their ridiculous advertising outlays.

    Interestingly, I think it is also probable that Australians have the most electronics. Purely from personal observation, we seem to be unique in that almost everyone has the latest iPhone/Android and a plasma tv.

    So it's not because we make so much money, its because the US has so little... so they tax us... because we make so much money...

    Two ways to say the same thing?

    Just did a little search for the price difference of Max payne 3 in Aus , US and UK
    AUS - $98.00
    US - $59.99 ( $57.00 aus)
    UK - £ 36.97 ( $57.59 aus)

    Please explain...

      Please explain indeed, since they're able to sell Risen 2 at the US price...
      AUS - 49.99
      US - 49.99

        exactly it's publisher choice what the price is.

          It's starting to get pretty ridiculous when it's cheaper to purchase day 1 release games in the UK or the US and then pay for international shipping than it is to purchase the same DIGITALLY online in Australia.

          You really can't reconcile it as anything other than greed.

    It's great that this is finally getting looked into! I've always thought that aus was being used to pay for other countries' "discounts" on tech items! I still believe retailers need to put pressure on publishers/distributors to force RRP down so they can sell games cheaper to consumer but still make enough for their business.
    The publishers need to acknowledge why people import and/or pirate is because of the high prices in aus!!

    Retailers charging more for games in this climate it likely what's killing them. If they charge less, they'll get mroe sales and end up making mroe money than they would have otherwise.

      That's how things would work if the used games market didn't exist. While the used games market exist's the higher the prices the better.

      Since if they rebuy a game at 60 and resell it at 5 dollars under retail they can make 35 dollars.

      If the prices were similar to the US they would be rebuying at 25-30 and selling at 45 and only making 15-20 dollars. meaning they would have to double their Used marker outright in order to make the lower pricing more feasible

    Our government has something called a "Import Tax" for games, which increases the price to about $20 to $30 each game. Also a fun fact, when game companies create their games, they create them in their origin (Where the studio is) and they have to create more versions for other countries to be compatible, which again costs money. So that's why games are so expensive here, mainly because of the import tax, you can't blame the companies to make different versions of a game whether to create a universal version, it cannot be done.

      You're talking about localisation, and that has nothing to do with it. Sorry :) The cost of localising doesn't get passed onto the consumer at all.

      Actually, they don't have to create more 'versions' for other countries, we use the same format as the United Kingdom and other countries.

        I'm talking about region restrictions on games (On PC you have to be connected to the net for installation, on consoles the game goes through your settings to see which country you are in). The majority of these costs are coming from that, and the import taxes. The only way you can bypass this is by using piracy and modding/hacking.

          Its interesting that these import taxes apply to digital sales and it is also interesting that we are the only country that has to pay 50 USD for these region restrictions.

          Is Australia the only place that is classed as a region?

            Yes.

            Region 1 - Entire world except Australia
            Region 2 - Australia

            What I find ridiculous is that this 'expensive' region locking only exists to control markets and gouge certain regions on their local price. So apparently they pay lots of money to region lock something so that they can make more money selling it.. kind of seems self defeating.

              Region 3 - Japan

              An AU$90 game costs AU$99 from Japan. Preowned market is almost non-existent - and if you can find a game preowned, it'll be in the AU$70+ margin.

              Its not just Australians getting the hot shaft in the back passage.

          Region Restricition's aren't a cost to the User.

          They are something created by the big companies to prevent us from getting around their regional pricing schemes.

          And they aren't an additional cost anyway. Instead of sending out USER12345USA, it would send out USER12345AUS. whether we were in the US or Australia it's still sending the data back to the servers in America(Since it's generally unlikely we get servers to begin with)

          If your talking Language based issues. They only convert to languages with enough customers to create a profit for that conversion. You'll never see a game released with Native American as a language unless they could guarantee that the cost for recreating all the voice in that language was less than the potential profit to be gained by having that version.

          As for Import Tax It varies based on product. Some things are taxed more heavily(like cars) in order to try and maintain the applicable industry in the country.

          And it's generally a percentage of the Unit cost yet your claiming 20-30% import tax on these unit's. If that was the kind of instant loss they took on each unit they would have a local factory producing the games anyway. Since you just send the master copy over and then copy it unlimited times to keep the costs down.

          Then how come some new release games are the same price as in the US?

    It aint the retailers.. it's the publishers.. so blaming HN, GAME, EB (cough.. ok, you can blame EB a little) or JB isn't really the answer.. the answer is to do what this inquiry is suggesting and place the blame accordingly: with the publishers (ie. Microsoft, Ubisoft, THQ etc)

    "We asked Ed Husic if that struggle was indicative of a larger problem. Should we really be paying less for products when retail is clearly having difficulties?"

    The reason that retail is stuggling here is that no one will buy from our retailer when the price is so high - they just import directly or go through the gray market or pirate. If the retailer could actually access the wholesale prices of retailers overseas then they'd still be making sales. The gouge is at the supplier not the retailer.

    Ed Husic FTW!

    I don't know what all the praise is for, inquiries make recommendations, recommendations are ignored.

    As a consumer, I will continue to show my opinion by importing games from neighbouring regions for 50% of the Australian retail price.

    So seeing as he is referring to the US and Europe... the world gets hit with GFC, Australia is one of the countries that does the best out of it, yet game prices are essentially the same prior to the GFC. AU = ~$100AU, US = ~$50US, EU = ~£39GBP

    Prior to the GFC were we just icing on the cake for companies? Now with companies experiencing losses now, obviously due to the ~1 Billion people in the US & Europe not purchasing as much as they used too, he is suggesting that Australia (~22 million people) is providing life support for the industry?

    and... continuing on with that, seeing as we all want the cheapest price around, alot of us now import so in fact we are actually contributing to the industry sliding further into the red because we aren't buying local? and if everyone stopped buying local the entire industry would collapse?

    Sorry, but I don't agree, our market is a fraction of the US and/or Europe, so prices will be higher relative to the rest of the world if they expect to make any profit here. I agree that prices are probably too high due to distributor markup, but that's about it.

    this: "alot of us now import so in fact we are actually contributing to the industry sliding further into the red because we aren’t buying local?"

    Reduced prices will almost certainly spell increased sales for Game and Harvey Norman, I would love to jsut run down to the store instead of ordering online if I didn't save ~$30 every time i do the latter

    Until Australia can get their act together, I'm perfectly happy buying games dirt cheap online. I'm all for supporting Australian jobs and all that jazz but I don't see the point when we get fucked in the ass for it.

      Much agreed with this comment. Much agreed.

      Right on, places like ozgameshop, and ziip.co.uk do right by me. Even PS3 controllers are roughly $35 cheaper. It's time we ship up, otherwise, my money goes overseas either way. I don't give a hoot about convenience in store, I can wait.

    Never heard of this guy but I'm adding him to my ballot paper next election.

    I hope this sees a decrease in prices over at EB. I wa sin the states recently and what they pay for full price is damn near insulting compared to what we have to shovel out!

    I supplied information to this inquiry ages a go, good to see something is being done.

    http://www.pc.gov.au/__data/assets/pdf_file/0009/113022/subdr227.pdf

    Ok, so I found this quite amusing. On my trip in Singapore I decided to check out their electronics market. Geek's paradise.

    Anyway at one of the stores I found the game ANNO 2070 which I wanted. At the time it was around US$80 on Steam and around AUD$80/70 at JB and so forth. In Singapore the price was the equivalent of AUD$35 (I think I was even able to knock $5 off the price).

    On closer inspection, it states on the packet "Manufactured in Australia"! So it costs less to ship over there, than sell here? Like WTF?
    The prices over there were more or less what you'd pay for other goods here.

      Oh, and not to mention, my bro was able to get the same game from Europe for AUD$35 with shipping!

    " claims that high Australian wages are to blame, are a “massive cop-out”."

    Proof you can be a dimwit and still be a politician. Whilst prices alone aren't dictated by wages, saying they have no influence is being extremely ignorant considering the government rants on everyday about interest rates which are a product of index's.

      Wages are a huge impost on the cost of retail in this country. But there are a variety of other factors too. I work in the e-retailing industry and I can tell you (without being too specific for the sake of my job) a lot of suppliers simply tack on a arbitrary amount we call the 'Australian Tax', which is basically a price adjustment made because Australians are perceived to have a higher purchasing power. We get ripped off because suppliers, among other things, think we can afford it.

      The wages debate is also extremely valid, but the problem is you will never see a situation or government that wants to take the risk to rebalance the equation after what happened to the Howard Government with WorkChoices. They tried and we kicked them out of office for it, only to complain stuff here costs too much.

      No what he's saying is wages do not account for 30-50% price diffrerence, since that is the main excuse that seems to get thrown out first and foremost

    What the dickheads dont realise is that people would buy more games if they where not a rip off.

    Sell 300 games @ $50 each is better than 50 games @ $100

    The guys at CD Projekt basically came clean to us when they released The Witcher 2 (I think they're the only developer who has given a straight answer so far). We're being ripped off plain and simple.

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