Retailers Worried About Imports - Calling For GST

With the strength of the Aussie dollar, and the relative weakness of both the pound and the US dollar, importing videogames has become increasingly more common place over the last couple of months. While the exchange rates continue to strengthen in our favour, the price of goods remain the same, causing many frustrated consumers to head overseas with their cash.

News.com.au is currently reporting that retailers, fearing a loss of income as a result of this, have begun to push for changes to the GST threshold in order to curb overseas spending, thereby encouraging consumers to continue spending money in Australian stores.

At the moment the board of Taxation don't bother wasting their time chasing up on good imported when the value is under $1000, but retailers are calling for that threshold to be reduced, the argument being that the government will be able collect a fair chunk of extra tax dollars, whilst also encouraging consumers to keep their money in Australia.

The chances of this affecting game imports is low, given that the cost of games is far under the $1000 threshold, and underneath the proposed $400 limit being suggested by retailers, but it is an issue that could cause problems in the future should retailers look to reduce said threshold further.

We understand that retailers are having problems competing with overseas pricing in this situation, but the consumer has a right to seek out the best deal possible for themselves. We see this being an unresolvable issue until Australian prices are brought more in line with what consumers are paying overseas.

Thanks to Clipper from Neogaf for the tip.

Retailers Call For GST On Overseas Sales [news.com.au]


Comments

    Retailers are barking up the wrong tree - they need to be demanding that wholesalers/distributors pass on savings from the strong dollar so that they can then pass them on to consumers in order to be able to compete with imports.

    Ultimately, even if they added the 10% GST onto imports it wouldn't lead to any improvement in sales for local retailers. When you can get the same item 30-50% cheaper online then it's still a lot cheaper even after you add on the 10% GST.

      Great comment. Nailed the issue.

      Well said, exactly what I was going to say.

      Very right. Unfortunately, people are more interested in bugging the government than reducing profit margins.

      Great comment. That's spot on.

      The GST argument only comes into play when there is less than a 10% difference in the price.

      Publishers have been ripping off Australian gamers for a long time, no matter how strong (or weak) the dollar.

      Here here. I was about to blow the hell up but read the first comment and it was EXACTLY what I was thinking. I'm damn sick of this isolationist protectionism morons in Australia (and most capitalist countries) flout the moment something doesn't go their way. You own a shop, you do so in a brand new world of online importing and cheap international postage. Either adapt or perish.
      Up until the GFC hit in '08 I was importing like a mad man. I didn't while the dollar was puss, now I'm back at it. God bless the free market.
      The free market at times benefits the seller, at times it benefits the buyer. For as long as I have been a gamer 21 years now, I have been robbed for my games. now I don't have to thanks to combination of play-asia and Steam.

    Well all the shops have to do is stop charging RRP for every game that comes out (basically EB, Gametraders and GAME) and start pricing somewhat competitively - case in point - by importing Star Wars The Force Unleashed 2 Collectors Edition from OzgameShop i on only paid $79 (with postage) when compared to EB's $118 (they were the only ones who carried it in oz). Who is going to pay $39 more for exactly the same thing? Sure i had to wait for delivery but it only took 4 days.

    However if it is a game that i need NOW (Assassin's Creed Brotherhood) or isn't really practical for shipping (Black Ops Prestige)then i still order here in Aus but really the majority of games i am buying are either coming from the UK or they are from a steam sale *hugs valve*

      With price differences like that I think I should start up my own games retailer. Screw whatever suppliers major chains like EB and JB use, I'll just buy online and re-sell it here for an extra $10. Still beat half their prices.

        And you'll be screwed by region locking. To combat this, import consoles, too, but then you'll have to find a way to work around online region locking...

        I wholeheartedly wish you the best of luck! Region-locking is discrimination that should be criminalised in my opinion.

          Region locking isn't an issue with the PS3 . . .

            Except for DLC. The DLC for a game is often tied to the particular version that is sold within a country.

          Most PC games have no region lock, ps3 isnt region locked and many people have a modded wii to prevent region lock. Really only the 360 suffers from it.

            Doesn't affect the 360 that much. I have bought a stacks of games from overseas and the only game that I have encountered was region locked was Tales of Vesperia. However I always do some research before I import games so I noticed it was region locked before I purchased it.

          I get about 50% of my console games from an english supplier (but sometimesI get asian versions from them too) and I've never seen a single region locked thing

          As far as i know only a handful of games are ever region locked on the 360 in terms of MP servers. We can import practically any game from the UK because we are in the same PAL region as them and in quite a few cases it is exactly the same disc with both EU and AU classification notifications stamped on them.

          Also DLC is not region locked either. Even if it was - you could simply go on to xbox.com and purchase the DLC from that marketplace from where you got it.

          As others have said before - PS3 is not region locked and PC has hardly ever been region locked - the only one that still suffers from region locking is the Wii but you can still import PAL UK games.

    "The consumer has a right to seek out the best deal possible for themselves."

    Exactly. I see little sense in buying from local retailers when their products are overpriced and I can always import to get a lower price. I might have to wait for a period of 1 - 2 weeks but it's worth it. On top of that, some companies can't be bothered to release certain titles and gaming equipment here in Australia so what choice do I have?

    Ironically, the only Australian stores I buy from nowadays are online ones. And even then, they're still selling imports anwyay.

    I doubt this kind of change would have much effect on the average gamer anyway. I mean who buys $400 worth of games at once anyway (and even then you could probably get them sent a separate packages to avoid tax)?

    But in reality the retail sector really needs to take a good hard look at it's business model. Look at JB Hi-Fi, their profits are still up even with this years downturn in sales, why? Because they actually compete with these online stores, they sell products people want at a price they are willing to pay. It's still not AS cheap as some online stores, but it a lot more reasonable then some of the other retailers out there.

    Can't see it happening, because it would require a massive amount of effort to instigate by Customs. They already only have the manpower to inspect <10% of incoming mail, I'm pretty sure they wouldn't give a flying duck about keeping an eye out for video games when they've got more important things to do (you know, like bombs and drugs).

      That's a fair point, but you also have to consider that as far as Australian retailers go, JB Hifi and BigW have the upper hand because of all the other products they sell that Eb/Game etc can't get into (TVs, DVDs, Music etc)

      Crap, that was supposed to be a reply to Cameron, sorry mr Waffles :D

      (STUPID IPHONE!)

      You got it one there. The whole argument over whether or not to bring this in is moot as it would cost more to implement than any potential gain from GST from imports or increased retail sales.

    Meh. It works in cycles. They've had it good for 20 years now, they're naive or ignorant to think it wouldn't turn around at some stage and consumers would go elsewhere.

    Zero sympathy. A shame if someone closes down, but is that our fault?

    "retailers, fearing a loss of income as a result of this, have begun to push for changes to the GST threshold in order to curb overseas spending"

    Here's a better idea, retailers could curb this unjustified price gouging they have been doing for the past 20 years.

    These days, I only buy local if I can find a good game in the bargain bin. I basically stopped buying local altogether when EB Games got exclusivity for the collector's edition of God of War 3.

    In the US, if I remember right, that edition was only $100 US but EB wanted to charge $250 AUS for it.

    Retailers should be giving better deals.

    My local comic shop (Comics Etc. for anyone in the brisbane area) drops all prices on new ordered goods when the dollar is up.

    It's what all retailers should be doing, not whinging to the government!

    I buy instore...

    It's money going back into the economy, and I'd rather support businesses that employ people here too.

    But, you do feel the sting when a game is 30, 40, 50 more than online.

    It actually strikes me as more like something the consumer affairs people should be dealing with.

      someone bought that up the ther day

      but EB and GAME are both owned by international corporations

      the only thing your paying for is the staff, and considering most of there money comes from trade ins your not even supporting the developer of the game in most cases by buying there

        Funnily enough, most developers aren't in Australia now either.

        Even if my local EB is part of conglomerate, with ownership in the US... they still employ locals, and their offices are in Australia too. It all goes back into the Aus economy, and the wage taxes they pay go back into our state / country.

        As for the resale thing, I don't know what to tell you... I think publishers should number their discs and recieve a ping everytime it's loaded. Then they could say "we'd like 10% of resale profits".

        I'm not saying what we pay is fair... it's not.
        But I don't mind being screwed over a little bit if it's going to help others.

          yeah i realize that my point was more along with my general view that trade ins are scum and should be associated with piracy for all the good they do for the creators of the game

          as for the pinging idea then all EB has to do is not scan that ping be hard to catch them.

          the issue is that unlike a car which gets wear and tear a disc either plays or it doesn't which means that until it stops working it has no degradation in value that a new copy doesnt have(ie it only become's cheaper as time passes)

            I meant ping in the internet sense.

            When you put it into your console it bounces a message to the publishers server... the publisher then has a list of how many copies have been resold.

    Wow this is hilarious, seeing as the larger retailers are normally owned by an even larger company (eg: Wesfarmers owns K-Mart). And as those parent companies normally diversify their earnings, they are more often than not "pro" Free Trade (meaning; the trading of goods without government charges applied to the cost.)

    Yet, flip the process on its head, where the consumer is now using the free-trade model and it is the companies that are losing their income, not the individual (ie: lose of jobs due to internation outsourcing) and suddenly you get the subsidiaries calling for taxes to be applied to the model because the individual is benefitting over the (parent) company.

    To bring it back to the streets for a moment: Suck on it you suit-wearing, corporate wh*res.

    I can understand that it's starting to get pretty bad for the local retailers, and I feel kind of bad for them. They just can't set their prices as low as overseas prices because they too pay more than the o/s price from their suppliers. Because of that, they're losing out on sales. They can't sell everything at a loss just to get more sales.

    Still, I'm in no rush to help them out. Why buy one game for $100 here when I can get 2 for that price from overseas? Even if it was taxed, it'd still be cheaper.

    You mean the same publisher/retail industry that has been ripping Australians off for decades forcing us to pay (at times) twice what overseas gamers pay for the same products, often weeks later, is complaining they're losing money from people buying a legitimate legal product elsewhere?

    Is there an emoticon for 'world's smallest violin"?

    The day these dinosaurs go bankrupt and publication is handled internationally, games being delivered through digital distribution only, will be the happiest day of my life.

    There is a train of thought that states that online retailers and larger chains keep prices low for just long enough to drive the competition to bankruptcy, and then begin price gouging themselves.

    Not that I'm advocating spending money you don't have to, but I just hope that one day we don't say "Oh, wish I'd spent a little more money at my local retailer, while they were still here. They were the last line of defence against REAL price gouging, only we didn't see it."

    But I agree. $110 per game is insane, given the other options.

      I can't subscribe to this, take the example of how blizzard is doing cataclysm digitally.

      They sell the product directly through battle.net, it's downloaded well before hand, the second the game goes live the content is unlocked.

      There's no middle man injecting his own mark up to take a profit (which of course they would have to do).

      In this case, the middle man is not only charging you for effectively nothing (charging you for the honor of entering his store), he's holding you back, you get the game later and have to go to a store. You're basically paying more money to support an industry that is in the business of making life less convenient for you.

      Now game retailers had their time, digital distribution obviously wasn't going to work for the NES, but it's over. Like all industries in this great age of the internet, innovate or die.

      These retailers have known about digital for years, they've seen it coming, they've done their forcasts and have known trusted brand names. They were in the ideal position to compete with it head on but they chose to sit around on their lumps and complain instead. They get no sympathy from me.

        Until we get sensible internet speeds in this country, there's well and truly a place for physical retail. You want to talk about inconvenience - when I can get in the car, drive to the shop, buy the game, drive home, install it and patch it and be up and running faster than it takes to download it then I'd say digital has a fair way to go before it can be considered more convenient. Not to mention that fact that for a lot of people in this country, downloading something like Metal Gear Solid 4 would have blown their broadband quota out of the water for about 3 months.

        And if the middle man is charging you just for the honour of entering his store, what exactly does that mean when PSN / XBL downloads of the same game actually cost the same as (if not more than) the retail versions? They're charging you for the right to own their console? Maybe they forgot we paid for those in the first place...

        Digital should be half the price of physical retail, taking into account the reduced costs of not manufacturing physical media, manuals, boxes, not having to ship or warehouse any product, not having any retailer margin, and eliminating the trade-in / second hand aspect of the market.

          Agreed and agreed. The infrastructure in Australia won't support purely digitally distributed gaming just yet (also, I like my pretty collection of boxes). Quite apart from that, a lot of people (like me) can't afford a hefty broadband plan.

          Even with digital distribution, XBLA and PSN have showed us exactly what happens when the distribution channel is monopolised: PRICE GOUGING.

          It's a basic Walmart business model. What's going to happen when we no longer have any options?

          Yeah I don't disagree with the internet speed issue, but that's not a positive in the retail column that's just saying "Hah you're stuck with us because your internet's shit". Just because you don't have a car that doesn't make a horse the best option for transportation.

          Console versions of digital dist are rediculously over priced I'm not arguing about that, you're quite right. I'm more arguing from a PC gamer perspective, steam vs retailers specifically.
          The retail industry pushed PC games out of the stores because they couldn't make money off 2nd hand sales of them but still argue to the death that games shouldn't be released on steam on an international release date because it's unfair to them.

          Ugh this is getting long, I hope you get my point. I'm arguing for correctly implemented digital distribution not the shit we have now.

          Anyone who is serious about gaming has a large enough quota to allocate to downloading a bunch of games every month.

          Add this on top of some ISP (such as internode) offering unmetered STEAM downloads and it's really not a problem.

          As for speeds, standard ADSL is available pretty much everywhere outside of the far country, and is fast enough to DL a game over a couple of days (just leave the download going during the night, or while you are at work during the day)

          Like it or not, we ARE moving slowly but steadily to digital distribution. I'm a fan of boxed games myself (i love to collect physical copies), but we are a dying breed. Soon, only special collector's editions will be available at retail, with everything else being downloaded.

            Unfortunately steam can't be relied on to download only from one's preferred server. The alternative is running steamwatch and more than half the time not downloading anything because the telstra/internode server is capped.

      we had an awesome game store in my town, then EB came in with Game trundling along behind it.

      they didn't drop there prices to put them out of business they had 2 things going for them

      A) Trade in's and B) a brand name

      trade in's meant credit meant you have to come back
      and the brand meant that you weren't isolated to the one shop if they were out there

      where the small game shop with awesome prices didn't believe in trading in games, and you had to w8 for the next shipment if they were out

      and alot of it is the stigma with a games shop, i mean JB consistently undercuts EB at my nearest JB but all the "gamers" go to EB because they know games(a matter i dispute as im yet to have met one that wasn't a salesperson) and they get trade ins much faster

        Yea, I was talking to one guy at EB games and he told me he was actually transferred from another store because he was too "nerdy" looking for the main store.
        He actually knew about games too.
        EB games really has no idea what the hell they are doing.

          Well i know i'd rather go into a store with a hot chick behind the counter than see a nerd who knows about gaming.

          I know about gaming i don't need some nerd behind the counter giving his opinion. In most case i know more than the sales people anyway.

    I'd rather wait a week or two than pay DOUBLE for my games. Retailers can get stuffed. If the overseas import retailers can do it for the cheaper price, why can't our stores try something new instead of bitching?

    I'm interested to see, how does this effect sales of digital media, such as Via STEAM and direct-to-drive. While i'm aware that STEAM has an Australian localization, direct-to-drive does not, so you are theoretically spending money abroad when you purchase through it.

      not on everything steam doesn't tho only when the developer asks for it

      "I’m interested to see, how does this effect sales of digital media, such as Via STEAM and direct-to-drive. While i’m aware that STEAM has an Australian localization"

      Might add they also have their own pricing system for Australia slugging us extra for games that are cheaper in other regions just becuase they can or because the publisher said so - Brick and motar complin to publisher then the publisher cries to steam and the price goes up -See the boarderlands, Fallout: New Vegas stories of upping the price in Australia just days after release!

        "Might add they also have their own pricing system for Australia slugging us extra for games that are cheaper in other regions just becuase they can or because the publisher said so"

        And don't forget they're not walletraping us in our own money, its in american dollars so if & when our economy crashes and burns and we're back to us$0.75 again, the $90 copy of civilization 5 will end up costing us $120

        Also Fallout New Vegas was pricejacked a week or so before release, not after. Fortunately I prepurchased it when it was still $50 (and unfortnately I found ozgameshop who sell it for $40 about a week later...)

          Any limited channel has the opportunity to price gouge; Steam is a great example of this - Civ 5 is my example:

          Shop ~$100
          Steam (.au account) ~$80
          Steam (US account) ~$50
          importing physical copy (from uk) $40.

          I think GOG, D2D & the other less established download sellers are not as bad as Steam & I know Steam are only setting the prices that 2K set, but Steam shows up on my CC bill...

          Well OzGamesShop now days.

          The only time I will buy @ full retail now is for GT5 (Signature Edition). Any other purchase will be imported (or PSN / US PSN - which is usually 25% cheaper than .au PSN)

        While true that some publishers price gouge Aussies on steam, the majority of them don't and steam prices are usually 100x better than buying retail in Aus

        actually its done days before release which i believe has nothing to do with the retailers

        i believe that thats when 2k or Activision(the main perpetrators actually go and look at steam and go w8 a sec what are we charging for this again

        tho the fact that there getting away with it has started EA with it as well and bethesda put Fallout up a month before release i think(remember thinking lucky i preordered it :D)

    Oh yeah lets complain because the dollar is making it harder for us to rip off our consumers

    half of this is there fault anyway, by getting people to w8 for a used copy at a cheaper price because thats where they want all there purchases to be. They also show people that they could look elsewhere and get a better bargain.

    the thing is this has nothing to do with the dollar it was still cheaper to import when the dollar was at 80c

    the fact of the matter is that people have suddenly realised they can import anything from the overseas at much cheaper thatn local costs and will likely keep doing it even after the dollar drops again

    The overpricing of games has finally caught up with the retailers here but instead of calling it fair game the consumers decided they don't want to pay what we charge we'll lower the price there asking for a law that will effect alot of people but still probably wont stop there issue since anything imported would be under a $100 unless u import in bulk which is the whole point of the 1000 dollar limit

      Have you seen the price of used games?

      They're not any cheaper.

        yeah they are $5 dollars doesn't seem like much but in the world of marketing it's a huge thing

        people are more willing to buy something if the add says it's 19.95 as opposed to 20

        never said used games were cheap but there cheap enough that the majority of people are tight enough to buy them which allows EB to make a killing on them since they can sell them for 5 below retail and people will still make a purchase

    Wait, wouldn't the dollar being so strong increase the profit margin on their game sales? Assuming that most games these days are imported from America.

    I just imported some games for the first time recently. I got Metro 2033 for $20 ($80 in store) and New Vegas for $40 ($90 in store).

    The price difference is ridiculous.

    haha, this is funny. They don't even have the correct value that they start taxing at. It's actually $900 AUD (AUD store value of $1000).

    I think this is an interesting point too. 360/PS3 games typically cost $120 new, but the same game for a PC costs $90. Why, it's typically the same engine tweeked for the specific platform? I'd argue that the PC version should cost more since typically it is a much more unstable platform to develop for (no standardised hardware or OS).

    I'm with one of the earlier commenters, buy out of bargin boxes. If it costs more than AUD$60 you're paying too much.

      the reason for the whole PC being cheaper is that unlike the consoles no one is charging them to release the game for the platform and theres literally no rules in how the game has to be developed.

      the price hike on consoles comes from the fact that you need a console to play on them.

      And while the PC may have a larger variety in hardware. Most of that should be covered by the drivers and other software as well as having a large background of information to draw on to solve problem's.

      which is why there was difficulty programming for the PS3 to start with since it was a completely new beast with no comaprisons at that point in time so the initial programmers were kinda feeling there way in the dark

        "the price hike on consoles comes from the fact that you need a console to play on them."

        Plus licensing costs. You have to pay MicroSoft, Nintendo and Sony to be allowed to publish your game on their systems.

        Lets say it cost $100,000 per system* thats $300,000 more that you have to earn to hit the same profit margins as you would get by selling on PC with no licensing costs.

        * NO idea on real cost just a guess.

      "haha, this is funny. They don’t even have the correct value that they start taxing at. It’s actually $900 AUD (AUD store value of $1000)."

      No, it's $1000 declared value.

      http://www.customs.gov.au/site/page5653.asp

      Also ps you made the same mistake most small business owners make when they submit invoices, $900 + 10% = $990, not $1000. Saw that all the time working in Accounts Payable. :P

    What are the 'game' advantages (not economic) to buying games locally?
    PROS:
    1) you get the aus retail version which you can trade instore.

    CONS:
    Not sure about these ones.. might just be myths..
    2) matchmaking servers are European or US ones instead of local ones.
    3) possible issues with regional dlc.

      I think the cons are myths. I think the only console game I've seen that has regional servers determined by the game version rather than the console's country location was Army Of Two. There's probably a few more but its extra work to create seperate versions just to separate multiplayer into regions so it makes very little sense to do it.

      As for the DLC, I've got asian versions of brutal legend and borderlands and DLC works fine for those

      Are these pros and cons true? Are there any more?

    I mostly buy local, but even then I'll shop around for bargains. With some new release games you can get them as low as $80 and with the overseas price being around $65+postage I'll pay that extra bit of money to get it now.

    But I fail to see what adding GST to imports will achieve apart from giving the government more money. Retailers here have to either change their tactics or close down.

    Why should we pay 30-60% extra just because we're in the Australian market? Consumers will go where the best value for money is, so when local distributors stop overcharging we'll stop shopping elsewhere.

    Finally the greedy assholes are getting what they deserve. Pricing everything at double the price is completely ridiculous.

    Its sink or swim. Local retailers better find more efficient ways of selling their games or lose to the overseas market. Yes some retailers will fall, but the benefit of the consumer is what the economy is about. Thats why they removed tariffs from many imported goods.

    I almost purely buy from Steam, GOG, Impulse or Direct2Drive these days for my PC games.

    When Steam can offer me the same game for only 10% of the price of EBGames; why would I buy from them?

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