It's been too long since we've had an old fashioned Objection! So we've decided to take one of the most controvesial perennial topics, game pricing, and take a different angle: are we too entitled? Should we really complain about the price of games when we, as consumers, have more choice than we've ever had before?
To help us out we have James O'Connor, senior writer for Hyper and PhD candidate, helping us out by bravely arguing that maybe we shouldn't be complaining too much about game prices after all...
MARK: Oh James, you’re a brave man I’ll give you that. When you asked if I would be interested in doing an Objection piece in which you would argue that games weren’t too expensive in Australia, my first thought was this – your funeral buddy.
Then I tried to anticipate the points you might make, and I realised that maybe we would find some common ground here...
But I’ll stop there, and let you make the points I think you’re going to make before I decide whether or not I agree or disagree.
So tell me you crazy bastard – why aren’t games too expensive in Australia?
JAMES: Well Mark, let me open with a few simple clarifications.
For starters, I am no economist. I got a 14/20 in Year 12 Economics (which was six years ago now). I'm not great with handling my own funds. In fact, if anyone knows a good accountant in the Adelaide area, feel free to recommend them in the comment thread.
Also, I am writing this from a position of extreme privilege, which I think is worth admitting to. As a games reviewer, I get most of the games I play for free. The same goes for you Mark. But I have known all too well the sting of not being able to afford the latest releases – as a child, my parents were overly generous with pocket money, but buying a single game still required months of saving.
For the last few years – ever since our dollar strengthened, eventually overtaking the value of the US dollar – people have been complaining that we pay way too much for videogames over here. And it’s true that, compared to the US, we are paying a lot more, but that has always struck me as a bizarre and overly simplistic reason for arguing that the prices need to come down. Obviously it would be nice if they did come down, as is the case with pretty much everything, but are we really being ripped off so badly?
There’s quite a bit to dig into here. First up – how much is $100 worth to us, exactly? According to Wikipedia, the most reliable of all sources, our minimum fulltime wage is the second highest in the world, after Denmark. Almost 50% of Australian households earn over $70,000 a year, putting them in the top 0.1% globally, earnings wise. Those 1%ers they’re protesting against in the US right now? They’re on $380,000US a year. Our top 3%, on the other hand, is earning over $13 million annually. Our current unemployment rate is around 5.2%, which isn’t amazing, but is far better than the USA’s 9.1%.
So, that’s the first part of my argument – we’re taking the strength of our economy for granted. By and large, we can afford these high game prices. Thoughts, Mark?
MARK: Without sounding like a patronising tool, I thought you were going to hit me with the minimum wage thing, and the strength of the economy, and I think it's a fair point. Honestly.
I'll begin with the points upon which I agree: this whole game pricing business isn't as simple as 'we have dollar parity therefore we should be paying the same as the US'. Of course there are other factors: our higher cost of living, the fact that we earn more in general, the fact that the logistics of sending stock around Australia -- a massive country with a relatively small population -- is a difficult task.
Then compound this with the fact that everyone involved in this process -- the store clerks, the distributors, those involved in logistics -- most likely get paid more than their US/European equivalent, then you start to get an idea why we might have to pay a little more than our overseas brethren.
But here's where the whole thing falls apart -- and this applies more to the distributors/publishers than retailers -- it's easier and cheaper for a small, independently owned Australian retailer to grey import copies of a game direct from other overseas retailers than it is to buy direct from local distributors!
Now how can this be? Does OzGameShop have better logistics than EA/Activision/Ubisoft? What's going on here?
JAMES: Alright, yes, I can see how that would be a problem for the retailer. For the consumer, though, the entire situation is win-win, and that’s why all the complaints bother me a bit.
Somewhere along the line, Australia videogame consumers lost sight of the fact that paying half price for imported games wasn’t something they somehow inherently ‘deserved’. I could import a copy of Skyrim from the UK right now and pay a tad under $50 after shipping. To me, that’s not something I’m entitled to – that’s a damn bargain. Hell, the $79 I paid for it was a more than fair price for what I got in return. In fact, it’s less than I spent last time I took my family out to lunch.
And hell, games are cheaper locally than they ever were before anyway. Have any of Kotaku’s readers honestly ever paid $120 for a game? The increasingly fierce market competition makes paying RRP unnecessary. Back when I was a young lad with an N64, if you saw a game going for $20 you bought it on general principle. I remember picking up Hydro Thunder for $20 and being elated. I also remember people complaining when the vastly superior Hydro Thunder Hurricane cost $20 on XBLA. At the shops today, I noticed that EB, GAME and Gametraders all had tables dedicated to selling games that were selling for $10-20, which would have been all but unheard of a decade ago. We may be paying more for new releases, but if you’re gaming on a budget in Australia, you’re still set.
My argument isn’t so much that we shouldn’t reassess our current models of business so that we can avoid issues that are affecting retail outlets, or that we need to go and spend $100 on every new release. What I’m arguing is that games aren’t necessarily overpriced in stores just because there are ways of getting them cheaper. Does that make sense?
MARK: It kinda makes sense, but I take issue with local publishers and distributors absolving themselves of all responsibility when it comes to the recommended retail price of video games in this country. Sure you can get some bargains at retail in Australia, but for the most part that's because they're selling at very, very close to cost price or, in the case of big stores like Big W and Target, as a loss leader for other products.
I even had the Managing Director of a major publisher tell me -- and I'm paraphrasing here -- that local distributors didn't have to worry about pricing that much because retailers did all the discounting for them. I remember thinking to myself, if I'm a retailer and I'm hearing this, I'd be getting mightily pissed off! I get the feeling that, considering the cost price of games in Australia, this so-called 'healthy' competition is far from healthy, and I think we're seeing this in the struggle folks are having at retail. Paul Yardley, the MD of GAME claimed that everyone has to band together to make prices lower in Australia. At the moment I honestly think retailers are doing their part -- local publishers and distributors? Not so much.
To be honest, I'm not sure if that unstructured rant answered any of your specific questions, but I'm keen to hear your thoughts anyway!
JAMES: I don’t disagree with any of what you just said. I simply think we’re approaching this argument from completely different angles! If the retail sector is being screwed over – and according to your research, it is – that’s a bad thing. Something should be done about that, I agree. I recently read a great piece on Games On Net about the issue, which actually referenced some of your research, and for the people selling the games, this is undoubtedly a problem.
My argument lies more with the consumers that are under the impression that they’re the ones being completely screwed over here, when in reality they have it better than they ever have before. If game prices come down – if they have to come down – that’s great for everyone, obviously. But the idea that we’re being hard done by here, as customers, strikes me as a bit silly. I think we should be clear on why these changes need to happen, and to suggest that they need to happen because we’re being ripped off doesn’t sit well with me. If you’re going to demand lower prices, I don’t think that an entertainment product that has been priced consistently for at least sixteen years (that’s the entire time I’ve been gaming, so I don’t know what prices were like before that), that doesn’t really seem to have been influenced by inflation or rising production costs at all, should be top of your agenda.
So basically, I agree with your points about retailers, they have good reason to be upset. The consumers, not so much.
MARK: I think I'll agree with you on this point: with the choices consumers have at the moment, shopping online, buying locally at reduced cost price, consumers have -- literally -- never had it better when it comes to the price of video games.
If they want, consumers can shop at OzGameShop or any equivalent and get games for cheaper than they could ten years ago, so in that regard gamers have little to complain about.
But I don't think gamers are complaining about that. For the most part gamers are irritated about the fact that publishers and distributors are selling games at an inflated cost price -- that's what they're complaining about, even if they misguidedly blame retailers for the prices on the other end. Gamers know they have more choice than ever before, but that only serves to make the price discrepancy all the more obvious.
However, I'd like to salute you James for taking this difficult position. Man, over 1500 words and we haven't even started on Steam prices yet...
Maybe next time!