Analyst Predicts That Australian Games Prices Will Be Reduced In 2012

Analyst Predicts That Australian Games Prices Will Be Reduced In 2012

Analyst Predicts That Australian Games Prices Will Be Reduced In 2012Speaking to Gamespot, Rob Blythe, a consumer analyst for Macquarie Bank, has claimed that he expects video game prices in Australia to undergo a correction in the next year.

“Australia has been slow to adapt to international pricing for games, yes,” he began, “but I think in the second half of this year or at the very least by early 2012, we will start to see game prices in Australia coming down. From my estimates, I predict they’ll drop from around A$120 to somewhere around A$70.”

This echoes comments by Ubisoft Australia’s Managing Director Ed Fong.

“The exchange rate is the exchange rate,” he said, when we interviewed him earlier this year. “18 months ago it was a very different story. Should we peg our pricing to exchange rates? That gets messy.

“I think that if the exchange rate stays where it is, there’ll be a price correction.”

But according to Rob Blythe, the exchange rate will stabilise over the coming months at below parity, making importing less attractive to consumers, and with the expected games price correction at retail, things could become more competitive.

“… Australian pricing will still be at a premium to offshore, due to things like distribution and shipping costs,” he claimed, “but the gap won’t be as significant. Economists are predicting that our currency will normalize and eventually come back down below parity with the US dollar, and when that happens, the attractiveness of buying video games overseas will be eliminated for Aussie consumers.”

Aussie game prices to drop by end of year – Analyst [Gamespot]

Comments

  • Well here’s hoping! I’d love for the price to come down and be able to get the retail game on launch day rather than waiting for it to ship.

  • Why would the price of video games go down?

    Exchange rate is irrelevant. No matter how much cheaper videos games get due to the exchange rate, retailers don’t pass it on to consumers, they keep it for their greedy selves.

    Video Games in Australia have been massively over priced forever and we have been ripped off forever.

    They continue to rip us off because we still pay it and theres no reason for them to stop.

    • The problem isn’t so much the retailers, though. The retailers aren’t passing on the savings from the dollar because those savings aren’t being passed on to them by the publishers/distributors.

      Retail prices won’t drop until wholesale prices do.

  • Games have become noticeably cheaper this year. However I still want to vomit when I see EB Games selling a used copy of MW2 for $80.

  • They need to do this. I don’t even buy games locally anymore due to the inflated prices. At $70, I would consider buying from Australian providers again.

    • I agree. Let them know how you feel by refusing to buy stupidly marked up games.
      If more people voted with thier wallet we would see a change a lot sooner.

      • Nintendo Australia knows that if you want a decent Wii title, most of the time you need to go first party. Because decent titles are so few and far between, they know most people will still pay ridiculous prices for older titles.

  • Everything costs more in australia because retailers can get away with it, I applaud all efforts to justly burn them by buying online.

    The second hand dealers will continue to scalp without regulation after this correction though.

  • $120 to $70? Who buys a video game anywhere in Australia for $120? Maybe a few fools at EB for a big name new release. $70 ain’t good enough. It’s as if he’s saying a standard game costs $120 to justify a $50 drop to $70, rather than say a standard game costs $100 and dropping it to $50.

    I may be wrong in pointing this out, and someone please correct me if I’m wrong, but I’ve heard Macquarie are a major stakeholder in JB HiFi?

    Based on $70, I’ll still order from Ozgameshop and buy imports in store at Dungeon Crawl.

    • i bought GT5 for i think 90 from JB day 1, i also bought final fantasy 13 for about 100 because i was a longtime fan (returned it within a week P.O.S game) not the point, i spent that much on games ive REALLY been itching for, but having said that i only own 6 ps3 games, thats a testament to the shitty pricing we have. i can see how ppl can be angry but still pay the money though.

      • The most I’ve spent for a game since 2003 (the Gamecube’s last decent year) has been $80 for Portal 2 on release and I consider it worth every cent.

        Last year’s War for Cybertron costed $57 at release.

        Kinectimals for my daughter was $59 (I picked up Kinect Sports for $17 new with some trade in price match madness!) and nothing else I have bought has been over $50 (and much of it has been under $30)

        My point is – bide your time and vote with your wallet – price match and haggle and import when you need to.

        The bigger get for me would be for pricing on XBLA/PSN/Steam to reflect reality

  • I was skeptical but since the analyst in question isn’t Michael Pachter I figure this has a better than 40% chance of being accurate.

    Didn’t some idustry body very recently, like in the laast week, start investigating price disparity? Video games, while not the focus, will be included in that investigation.

    However, I think RRP $100-$120 all the way down to $70 is a bit too optimistic for me. Let’s say $80-$90

  • Hot topic; will this also transfer to all past, present and future PSN store content? I still see prices markups of 200% (double) for AUS DLC compared to US. Now there’s no way in hell you can call out shipping on that.

  • Interesting how they’re making this prediction right after Activision listed a digital copy of MW3 on Steam for $100…

  • Based on what? Wishful thinking?

    Activision just increased the Australia tax on CoD:MW3 by another $10USD on Steam – making it $99.99USD

    Then we have Square Enix region locking the UK release of DE:HR so that UK copies can only be activated on Steam in the UK.

    While these $#%^&@$^&* are allowed to get away with these practices, prices won’t be dropping anytime soon.

    Hell… I doubt we’ll see prices drop if/when the $AU drops below parity with the $US – we never got price cuts for the time it was above it…

  • Kinda with Sheamus D on this one.

    Im going to thehut.com, ozgameshop.com and sometimes dungeocrawl too. Unless its something that I want right now and on launch – ill wait for it to arrive from somewhere else if i save 50 bucks.

  • Exchange rates can’t be the only issue here. Publishers are charging Australian’s 50-100% more for games over digital distribution platforms like Steam. We’re buying the same content, in the same US currency, from the same source. Nothing to ship, just a straight download. So why are Aussies being charged nearly double in many cases?

    • Because the market will still pay $100+ for a game. We’ve been conditioned to accept it through years of wallet abuse from the hands of publishers.

  • As long as I don’t mind waiting few days I will buy from playasia. I just hate going to EB because of it’s gouging and JBHifi is too busy.

    Unfortunately it’s all economics, if they keep making more money they will not reduce prices, why would they? I have NO faith this price drop will happen.

  • “… Australian pricing will still be at a premium to offshore, due to things like distribution and shipping costs,”

    Back of my Xbox360 games it says ‘MADE IN SINGAPORE’

    So its more expensive to ship them to Australia? Given that were are geographically closer?

    Huh….

  • Thats right keep charging too much so people wait and buy traded games.

    And I couldnt agree more Shugs, I thought the whole idea with digital distribution was missing out on the box and disc etc but getting the game at a cheap price.

    Surely they must realise that we are fiends at buying games once they get around the $50 mark. We just have a problem getting screwed at $100, even if we really want it.

  • There is a bit of pressure building with the Productivity Commissions draft report as well.

    The biggest thing you pay in Australia is for brick and mortar stores rents according to the report. But there is still a large gap and a lot of the time it is distributors selling to Australian retailers at the US RRP. Then we have the cross-contamination of price rigging which is illegal here. The ACCC seems to care less however.

    Draft report is here: http://www.pc.gov.au/projects/inquiry/retail-industry

    Also, is it me or has EA region locked their Origin store so we can’t even SEE the U.S. prices? I’ve tried tweaking the URL to no avail.

    • Not just you with the Origin problem. I see great prices for games on pricechecker websites, but can’t get at them:(.

  • …”From my estimates, I predict they’ll drop from around A$120 to somewhere around A$70.”

    I think a more accurate quote would be that prices need to drop from ~AU$90 to ~AU$50 to be competitive and encourage Australian shoppers to stop importing.

    In this global digital age, when dealing with a product that is a digital medium, the pricing between countries needs to be ‘reasonably comparable’, otherwise we’ll just import.

    Anyone buying shares in OzGameShop? Take Warhammer:Space Marine as an example – its US$99 for Australians on Steam, but $45 to import from the UK, and the game uses Steamworks, so you just activate it on Steam. No difference whatsoever between the two, other than price and adding to environment woes by shipping physical product halfway around the globe just to activate it on Steam.

    THQ should have to pay a Carbon Tax for price fixing beyond reason & encouraging Aussie game buyers to import.

  • Good news, I would finally like to walk into a store here in Australia and actually buy something without knowing I could of bought it online for 50% cheaper or more….

  • Analysts also predicted that the Wii would fail and the PS3 would be roaring success. And that seemed damned likely too at the time, didn’t it, with the PS2 being the best selling console and the gamecube not exactly being the most popular thing on the planet.

    Pretty much why I disregard whatever analysts have to say.

  • I remain doubtful. If it does happen though, I’ll stop carting my money overseas from now on. Hope this also means regional pricing on digital product douchebaggery will also stop.

    Even below parity, I highly doubt it will stop importing if retail prices don’t drop. Given that retail sells at twice the damn price of an import, our exchange rate would have to be horrid like it was about 5 years ago before it would stop people importing.

  • The $120 quoted is obviously RRP which most stores drop to between $80-100. So dropping RRP to $70 means we should see games between $50-70 in stores.

  • I think that one key problem is the valuation of video games. What is the value of a game $100? $30?, There is no stock exchange just a price set by publisher which they seem is reasonable, or they just follow along with the market, then follow along for international pricing. The price of video games are overvalued in my opinion a movie on DVD is $10 for 2 hours worth of entertainment, what is a good way to view the cost of videogames.

    On the argument above about EB games, that is something actually wrong, I mean I have had a look an seen game which I traded in which I got the usual 10 dollars if it is not brand-new or within the first 10 days, and then seen it sold for $60, That is $50 dollars of profit, then factor in that I bought the game there so it is extra. That is something unfare to consumers.

    Readers of Kotaku where do you guys buy games? besides EB or JBHiFi but for actual reasonable prices?

      • I wonder what percentage of the profits go back to the developer from ozgameshop? While selling a game for $19/$20, is it $18 that goes back to the developer? Then how does ozgameshop make any money or stay in business? You my friend, are a naive fool. Enjoy your cheap games buddy with your inflated sense of self-satisfaction that you’re helping the developer…

        • They are selling on par with UK prices as they sell the UK versions of games. So the publisher/developer will probably see the sales as simply from the UK region.

  • Pricing on games will never change unless the game publishers are willing to forfeit profits. I own 30+ ps3 games, most of which ive bought in the last 2 years. None of them have cost me over 30 bucks and most have been under 20. I started buying preowned and thought that was cheap until I created an ebay account and now im buying quality ps3 and some pc games for an awesome price. And some even have postage worth more than the actual ending bid price.

  • Im sorry but unless our dollar drops back to 60US Cents, importing will still be cheaper than buying retail even after all shipping costs and such are taken into account.

  • I’m paying 25-50% of the retail price by importing. More and more gamers are doing the same, heck even in other retail areas. We’re not buying less, we’re just buying more intelligently.

    If they don’t drop their prices, they go out of business. Won’t affect me.

  • If they change the RRP to 70 bucks that’d pretty well kill my importing of physical copies, places like big w would still knock 10 bucks off to be competitive on big titles and even if they didn’t, an extra 10-15 bucks is an acceptable tradeoff for not having to wait a fortnight for international delivery.

    Hell for 70 bucks, I might even start shopping in EB again!

  • So prices shall go from way too high to too high?

    I’ll believe it when I actually buy a game in australia again.

  • Don’t forget a fair proportion of economic analysts have predicted in the last few months that the Australian dollar is going to peg above USD1.10 – so what’s this about dropping below parity? It’s just another prediction from someone whose strike rate at predicting the future likely matches every other analyst’s (i.e. very average).

    Even today’s currency forecasts tip a strong AUD in the medium term. While this “should” be good for prices, it’s bad for Rob Blythe’s credibility.

    I’ll believe the price drops when I see them.

  • I haven’t seen one mention of Gametraders here, who I have consistently bought new games from at around the 80 price mark, with great staff and reasonable competitiveness, as well as being a locally owned company

  • Being a new business I know that the pricing at $70 is reasonable seeing as being an importer who sells games in Australia for no more than $75 the margin is generally only $15 – $20 per item after shipping, duty tax, import tax has been deducted.
    There are also more things that a lot of people don’t take into consideration when slamming retailers, that being said EB are far too over priced.

  • I havent bought a game from a retail store for a long time now thanks to steam. Full retail prices of games being $80-100 is just silly. I was hoping that competition would make our retailers wake up a bit, but no.

    A full priced, decently developed game should be about $50. ‘Lesser’ games, which are either sub-10 hours gameplay or aren’t more than a multiplayer mode (eg Brink) would be $25. I’m dreaming I know, people want their money..

    • Especially when they have a new game in each franchise coming out every 9 months, not a few years apart like before.

      Also, $25 is what I paid for Brink. 😉

  • Not gonna happen. The market will still bear current prices as the numbers of importers are still not that great.

  • There is another thing at play here which has nothing to do with retailers in Australia. Currently the corporate tax rate in Australia is significantly lower than that of the US. The result is that if more profit per title sold here is generated that profit is taxed a lower rate. Add to that the relative strength of the Australian dollar and publishers can do quite well on low volumes. Companies refer to this as “transfer pricing” where profits are maximized offshore. I suspect that this is another reason for the “stickiness” of retail games prices.

    The downside of this for publisher is that they have to “park” the money outside of the US, but again the relatively high interest rates in Australia also provides a good place to “park” said cash.

  • Guys, I work for EB and I noticed Call of Jaurez, FEAR 3 Both launched at $79.95. Thats an ok start. Lord of the Rings War in the North is launching at $79.95. So it is happening.

  • I think I’ve said this a hundred times already, STOP BUYING FROM EB Games & shop @ OzGameShop! Seriously, here’s the link:

    http://www.ozgameshop.com/

    Go there, hell I only just bought Bioshock 2 for only 9 dollars! GTFO of Gamestop affiliates & vote ‘NO’ to expensive games.

    We especially don’t need used games anymore. They drive up the prices of games anyway because the developers & studio doesn’t see enough profit to stay alive when we “trade” games at stores which backstab you. If we let developers give us their content directly, they won’t have to worry about publishers stealing most of their profits & work time.

    “Publishers & Music Labels” are a thing of the past and we simply don’t need them anymore. They’re legalized corporate thieves.

Show more comments

Log in to comment on this story!