Refusing to talk about problems doesn’t make them go away. Cleverly deflecting questions isn’t a satisfactory replacement for an answer. Video Game Publishers take note – the consumer is King, and you’ve been treating them like paupers.
The Witcher 2 finally returned to Steam today, after a significant absence, and like Fallout: New Vegas, Call of Duty 4 and numerous other efforts, it came gift wrapped with an arbitrary price increase – just for the Australian consumer. Just for us. From $45 to $70 - just like that.
But who’s to blame? The answer is a lot more convoluted than you might think...
The economics of the situation are utterly mind-boggling. In order to satiate retailers, and encourage a larger buy-in of product, certain publishers will up the price of a digitally distributed title. To an extent it makes sense – cost price of a full priced PC title at retail is about $70. If publishers retain the US Steam price for Australian consumers it’s quite simply impossible for retailers to compete.
And if they can’t compete, why would they invest in the product?
So, in short, for publishers to have any chance of making money at retail they have to price themselves out of their own digital market. Incredible.
They do this for a multitude of reasons, but mainly because relationships with retailers are important. Sure, it doesn’t really make sense for EA to price Mass Effect 2 for $89.99 on Steam for the PC - but specialist retailers might be less keen to buy in stock of the console versions if they don’t.
And round and round we go.
Surprisingly, if you speak to Australian distributors - the local offices of EA, Activision, etc – they’ll say that the decision is made overseas. They have absolutely nothing to do with the situation, even at a local level. Steam pricing is a strategic decision made by publishers overseas in order to maximise revenue – it’s as simple as that.
We can complain, and we have every right to, but it’s a tricky situation. We, as consumers, should not have to pay more for content that is digitally distributed. All of the issues with shipping, distributing to a smaller market, etc is null and void.
And we, as consumers, should not be asked to bear the brunt of retailers that can’t keep pace with an evolving market. If it makes more sense to sell your product online digitally, we shouldn’t have to pay more to extend the death throes of retail as it struggles to evolve with the times.
I don't necessarily blame retailers for this situation - or publishers for that matter. At the moment retail is an important part of video game distribution - but what happens when they lose relevance? What happens when full priced console games are delivered digitally? Will Australians be asked to subside retail when that occurs? When do we cross the line? When will the power of retailers erode to the point where the games industry no longer has need of them?
There is clearly an endgame here and, for those that work in the local Australian games industry, it’s a scary one. In the next ten years there may be no need for specialist video game retailers and, hence, there will be no need for local distributors. Following on from that, there might not be any need for local coverage of video games, so I may be out of a job too!
We’re slowly heading towards that outcome and the games industry needs to make a decision – will it continue to subsidise itself by charging Australian consumers more than the market demands, or will they accede to the natural process of things and switch off the life support. It’s a tough decision, and there are no easy answers – especially when my own job will probably be on the line - but there will come a time when we, as a collective, will eventually have to pull the plug.
That’s the free market, that’s the nature of the beast. And it’s just a matter of when.