Why are Australians paying more for The Witcher 2? And how long will we have to put up with this kind of price fixing on Digital Distribution? We spoke to the Managing Director of Good Old Games, Guillaume Rambourg, to get some answers. Turns out he was way more frank than we expected....
The price of digitally distributed games in Australia is an issue that continues to frustrate and confuse consumers nationwide. As recent price fixing of The Witcher 2 has illustrated, publishers are almost terrifyingly transparent in the way they pander to retailers – artificially increasing prices to ensure retail has a fighting chance against online services such as Steam and Good Old Games. Initially Australians could pre-order The Witcher 2 at the US dollar price but now, as we approach the retail release, the price of the game has been increased – and we wanted to find out why.
So far Steam has neglected to comment on the situation, but Guillaume Rambourg, the Managing Director at GOG.com, was kind enough to answer our questions, and was as frank as anyone we’ve ever spoken to on the issue - especially considering the fact that Good Old Games, and The Witcher 2 development team, are owned by the same company - CD Projekt.
“First off let me explain the pricing increase issue,” began Rambourg, in response to our first question. Good Old Games had previously referred to the price increase on The Witcher 2 as being the result of “licensing agreements”, but what were the specifics of these agreements?
“CD Projekt RED has legal obligations with distributors all over the world including Australia concerning different SRPs. Good Old Games' pricing policy in Australia was causing some conflict in the marketplace, so we had to change the price for the Australian market.”
In short, it appears that The Witcher 2’s price increase on the GOG.com service was raised to provide some sort of parity in the Australian marketplace. A little unfair considering that Australian consumers, who had pre-ordered early, purchased the game at a cheaper price. Rambourg was only too happy to concede that the situation was unjust.
“We know it's not fair and that's why we're extending the 'Fair Price Package' to Australian users and will be giving them a $26 USD store credit to spend at GOG.com. This means that not only is GOG.com not making any money on the price increase, it's actually costing us money, because we're paying royalties to the publishers on the games our users are getting for free.”
We have to give kudos to Good Old Games, not just for the ‘Fair Price Package’, but for their transparency on the issue. Most publishers we’ve spoken to regarding this issue have either spoken off the record, or point blank refused to address the issue at all. It’s refreshing to see how open Good Old Games has been – to the extent that they sent a Facebook update letting their users know that a price change was imminent, giving some consumers a chance to purchase the Witcher 2 at the US price before the changeover.
According to Guillaume, the whole situation has been a juggling act, making it difficult to please everyone.
“Every retailer is free to set prices at the level they feel is the most appealing to users,” he claimed, “but there are many other strategic elements that you have to take into account so that you aren't crushing the competition, and this put the rights holders - which are CD Project RED, not GOG.com - in a very uncomfortable position.
“At the end of the day, distributors need to keep two different groups happy - customers and business partners. Sometimes we have to perform some interesting strategic gymnastics to satisfy everyone. We’re always fighting for the best offer for our customers, though, which is why we came up with Australia’s own version of the Fair Price Package to address this.”
It was our understanding that the decision to increase prices was made in order to satiate retailers, who were buying The Witcher 2 at a higher cost price from local distributors – but Guillaume was keen to emphasize that both tradition and digital means of distribution existed in tandem, not in opposition to one another.
“Digital and retail are complimentary channels, not wholly competitive,” claimed Guillaume. “The presence of a box and physical goods are definitely a big deal for a lot of people, so paying a higher price for retail vs. digital distribution still makes sense for many. That said - we're still honouring the deal for everyone who pre-ordered the game at the initial digital price. Having to change your price this late in the game isn't ideal, but we think that GOG.com's offer remains the most compelling one, especially with our regional Fair Price Packages.”
As traditional retail continues to decline, we wondered how long digital distribution services such as Good Old Games and Steam would continue to cater to retail by artificially increasing their prices. Surely as traditional retail loses relevance the practice will ultimately become bad business for all involved.
Not exactly. According to Guillaume Rambourg, the situation is a little more complicated than that.
“As I mentioned earlier,” said Rambourg, “digital and retail games distribution aren't wholly competitors. The value of physical goods, boxes, and manuals is a very real one for many people, and even though a number of folks buy many games through digital services such as GOG.com, the demand for boxed copies of games remains quite high.
“I don't think it's necessarily a matter of retail having less influence on the pricing of games - it may be the case that, as the digital downloadable market matures further, you may see that there's an increasing influence both ways.”
Another problem consumers have with The Witcher 2 is the classification issue – the Australian version of the game will feature minor censorships to ensure the game gets through on our highest MA15+ rating. How frustrating was this decision to the team, and Good Old Games themselves?
“We had hoped—as a distributor—that the game would be available to the widest possible audience with the least possible restrictions,” claimed Guillaume. “We know that CD Projekt RED did their best to make that happen, but the decision is not wholly theirs. Are we pleased, as folks who've promised that there's only one version of the game worldwide? Not really, no - but living and working in Europe certainly gives you an appreciation that different cultures do things differently, and we respect the decision of the Australian Classification Board.”
Again Guillaume was more frank than we could ever legitimately expect him to be.
“On the bright side, there's very likely to be a fan-made patch shortly after the game is released, restoring the content that's been edited.”
The situation with The Witcher 2 is far from ideal. Australian consumers are being asked to pay more for a censored product that, until last week, they could purchase at a more reasonable price. But, despite these issues, it’s clear that Good Old Games are genuinely trying make good on their original offer – navigating the endless layers of politics and bureaucracy that comes with international distribution with their Fair Price Package.
It may not be ideal, it may not be perfect - but kudos to Good Old Games and CD Project for at least attempting to address an issue that other publishers have been avoiding for years.