Ed Husic Talks Games Pricing, Addresses The Struggle Of Retailers

Today the Federal Government announced it would be accepting submissions for an upcoming Committee focusing on the price of technology and software locally in Australia — including video games. According to Ed Husic, the NSW MP helping drive this Committee, this is good news for consumers, and a real opportunity for those involved to explain themselves.

"This Committee is good news for your readers," said Ed Husic. "Actually, Steven Conroy was someone who thought it was very important that games be involved in this inquiry."

"A lot of gamers have been contacting me personally about this issue."

The announcement of this committee has some interesting timing — GAME has gone into voluntary adminstration, and JB Hi-Fi has resorted to openly selling parallel imports in store. We asked Ed Husic how this might affect the inquiry.

"Well that's ultimately something the retailers themselves will have to discuss," he said. "Embracing online channels is obviously very important. You're starting to see in the US that a lot of brick and mortar retailers are starting to embrace online channels a lot more."

"Retailers always have to go through periods of transition. At the moment consumers are using technology to drive this change and retail will respond to that."

Ed Husic was very keen to reinforce the fact that this inquiry wouldn't necessarily be a beat up. He encouraged retailers and publishers to this as a real chance to educate consumers. If video games were expensive in Australia for good reason, perhaps now would be a good time to explain those reasons?

"This inquiry really gives everyone a chance to talk about this issue," he said. "My view is that the inquiry is a chance for retailers and publishers to educate the public about the reasons for the added cost. They should really seize this opportunity to talk to consumers."


    "If video games were expensive in Australia for good reason, perhaps now would be a good time to explain those reasons?"

    They can explain to me why new release games here cost $90-$110 all they want, it won't stop me from continuing to send my money overseas.
    Funny story, I bought 3 games from ozgameshop last night for the same price as what it would've cost me to buy one from eb games.

      The reason why the games are so high cost here is because of import taxes, self profit and all that crap..

        Actually, the tariffs and taxes don't amount to the kind of mark-up we routinely see. Shipping's a big factor, as well as staffing. US digital distro is matched to their retail intentionally, so as not to drive retail out of business, but their minimum wage staff are paid MUCH worse than Australian staff, so our physical boxes see a similar mark-up. The truly disgusting thing is that many, many publishers see fit to pump up the digital sales price (which is exempt from Oz wage comparisons and the exhorbitant shipping costs) to match Oz retail, which is already insane. THIS is the thing we need to be asking folks to target.

    "Maintaining epic profit margins" is not a reason for distributors/publishers to keep the price up.

    The thing that enrages me more than the price of games in local retail is not knowing WHY they're so expensive. So this inquiry could answer that.

    I always thought it was an exchange rate thing.
    Back in the 90s, when Video Games became a real big thing. our dollar was like US$0.65c, so we'd pay double for video games. And now, in the year 2012, our dollar is floating around parity (currently US$0.9777) so logically we're paying... double for video games? What!? Let me see that thing!
    "We're still paying double for video games."
    What is this shit?

    Digital Distribution is the worst, because you can't justify information costing more. As absolutely unfair as this sounds, and is, so this should not be the solution by any stretch: digital products and physical products should be priced differently.

      the thing is, once you drop prices, you can't raise them again without huge consumer backlash. nintendo says they would've charged more for the wii if they had known how well it would sell. why didn't they just raise the price once it took off? consumers would see that and revolt against the obvious greed. once customers have seen you are willing to sell a product for X dollars, if you raise the price, they will just wait for it to go back down to X again.

      the aus dollar was low for DECADES. the recent parity has only been for about 2 years. if they drop video game prices now, and then the aus dollar tanks in three years, it would be nearly impossible to raise the prices again.

        True as that might be, it's incredibly shitty to shaft a whole country of people on the basis of "well their dollar might change for the worse in the future".

        It was that low from moment it was floated. And following all other financial reports. Australian dollar unlikely to ever drop that low again - bar a nuclear war or nationwide earthquake/tsunami or crippling environment factor.

        I'm sorry but that excuse is a load of rubbish.. The AUD was hovering on average around 70-80 most of the time and prices were comparable...

        The AU dollar DID however tank while GFC was on (prety much hit high 50 to low 60) and producers took no delay in doubling prices for almost all goods to compensate. The AUD rises and it's still roughly around the same price. People know why prices go up and down you see it all the time on normal foodstuffs such as fruits and veggies that are on and off season.

        You can't have it both ways of having an excuse not to reduce because you can't bring it back up.. but rush to increase because prices have gone up!

    1. Ship a game to australia
    2. ???


      It sounds like you use the best news aggregation app ever.

    Blah blah blah. Isn't going to win this government votes.

    I don't see the need for government intervention. Lets all continue to shop online and push retailers to find increasingly cheap channels. Better yet, we can remove the brick n mortar control of the games industry and actually make releases available for download at the correct times.

    When the government does find out "yes game prices have ridiculous markup" what are they going to do? Nothing that us as consumers couldn't do faster by buying online and showing others how to purchase online.

      Sorry to burst your bubble but it s not because game prices have a ridiculous markup. I have owned independant video games stores for about 8 years now. A game that releases at $99.95 RRP - costs us $75. So the margin on the game is 25% if you can sell at full retail - which clearly is impossible. Now Westfield will expect your rent to be about 13% of your sales, but if you are doing really really well you can get that down to say 10%. Staff costs of running a tore are also about 10% of turnover. That means that is sold at full margin, after costs of purely staff and rent - leaves 5% "profit" or a whole $5 Now this 5% also has to cover marking down stock that doesnt sell, theft, eftpos fees, insurance, stationary etc etc. Now all this is based on selling at 25% margin or full RRP - which is impossible. So essentially we make nothing on new games and our profit is made on second hand games.We have resorted to parallel importing over the past few years which has allowed us to sell well under the local RRP , but still not close to ozgameshop prices. The price you pay to them would be pretty much exactly what it cost us to import the game ourselves, after we have to charge you GST. There is also the extra cost to us os havig to unshrinkwrap, and label front and back every game with OFLC stickers too which takes 1 person a whole day ( $160 in wages) every week just to do that.

        Perhaps the publishers could take a hit. I mean, they have been screwing us for years.

        Then your business model deserves to die. Digital distribution is the new black, and publishers can either get on board and charge less to distributors like your self or wither and die. Like movie studios, they are desperately clinging to old models though the writing is on the wall. Get modern and create incentives to buy retail like lower prices and extra gear, or disappear. I paid $100 for games as kid, scrapped together with a years pocket money. You get no sympathy from me on the new world

          Im not after your sympathy, I am just sick of everyone portraying retailers as ripping everyone off. We dont set the price - its the publishers. Well we do set a price - but obviously we cant sell everything for less than what we paid for it. These distributors are also the ones who want to go for digital distribution so it cuts out us, I guess we are the middle men. More profits to them. You think you will end up with cheaper prices? Well what happens when there is only 1 place to get something from - they can charge whatever they want for it. Also once you buy something digital, its yours forever, you can lend it to someone, you cant re-sell it to someone - so once you don't play it anymore, you have actually lost any money you would have got in resale value. You also don;t have that nice box sitting on your shelf collection, or a manual to flick through. Yes not everyone wants these things, but I still believe the large majority out there do. For my business, like I said lower prices we have been able to do through importing. Extra gear - well we are now putting a lot of effort into collectables action figures etc. I will give you some sympathy though - $2 a week pocket money is pretty pathetic - guess your parents must of been pretty "tight" - and the apple doesn't fall far from the tree now does it :)

            I can hardly expect you to sell me a game for $50 when your paying $75 for it. But complaining that the customer whose paying $50 online is tight doesn't exactly hold water. Everyone loves a Bargain, and getting what you want for half price is always going to be a bargain.

              Your right I don't blame anyone for buying off-shore and I hope that someday things will be on a level playing field so you don't have to. I just had to have a bit of a dig as I dont like being told my business model needs to die. Its just like me telling you that you deserve to be fired and you employer should replace you with a robot. Only difference being you can go get a job somewhere else, I end up losing my house.

    Companies should be able to price things as they like.

    People should be able to shop anywhere they like.

      And that's how we establish a reasonable market price. The main reason games cost a hundred bucks here is because that's what people are willing to pay. You want to fix that, shop elsewhere. Retaillers want you back in their stores? Make it beneficial for the customer to walk in there again.

    If online digital-only items are expensive in Australia, I don't care. I will purchase them elsewhere online through the various means available.

    If physical goods are expensive in Australia, I will buy them for convenience only. Otherwise I'll import them and wait.

    This whole thing is a joke & intended purely to gain positive headlines for the government. Companies are not compelled to make submissions, nor can the government legally enforce any changes. Companies are entitled to maximise profits for their shareholders & consumers are entitled to either not purchase at all, or purchase off shore - it's called market forces. Agruably consumers are already doing this & that will have greater impact on local pricing than anything that the government will do.

    I'm sorry but what alot of you completely forget is that vast piece of big blue sea between us and the rest of the human populace.
    The distribution and travel costs alone to ship items to australia at a bulk level are huge. Distributors have no other means to get stuff here so the cost is always going to be the same. The blockage is at the other side.
    The other issue is that, generally speaking, we pay through the nose for most tings in this country. Consider that it costs a family of four (2 adults 2 children) $32.50 to goto the movies in New Zealand, that same is $75 for us aussies.
    This debate and subsequent report is useless, will prove nothing but to acknowledge that we pay to live in a expensive nanny state and we make the decision to live here, by choice, knowingly because this is one of the greatest nations on the planet.....but it's just very expensive.

      I'm sorry, it costs 99 pence, or $1.60 AUD, to ship a SINGLE game from the UK all the way across that big blue see to Australia. The cost of doing that on a larger scale by the container load would be even cheaper on a per unit basis! What also does not hold up is that fact that there are manufacturing plants in Australia, Singapore and Thailand that actually press disks for this region, so what possible excuse can retailers have for shipping costs in those circumstances! My copy of Call of Duty 4 on PC was purchased from Thailand for $26 including shipping......the disk has the Australian OFLC MA15+ rating on it and the words "Made in Australia". At the time CoD 4 was selling in brick and mortar stores for $99.00, so again how the hell can the Australian industry place the blame on shipping costs when it is apparently cheaper to print a disk locally, ship it to Thailand and ship it back to Australia!?!

        Somebody on ABC radio earlier this week mentioned something about shipping. Basically, he said it was sometimes cheaper for UK retailers in London to ship goods to Australian residential addresses then it was for Australian companies to send the same goods a few suburbs away by Australian post (and substantially less than sending the same stuff from Australia to London). Something to do with international shipping arrangements. Sending a package over 1 pound weight to the US at one stage was attracting a $10 "search for terrorist material" tax, still might be.
        Of course, this doesn't explain the large difference in retail prices alone. It's just another factor to add to the list.

        I don't know where you go to the movies, but I only pay $15 for a Movie, Bag of Twisties and a Large Drink at full adult prices, on a Saturday night. To hell with Birch Carrol and Coyle.

        $2 extra for 3D glasses unless you kept the first pair and didn't throw them away.

      Don't New Zealand generally pay the same price or MORE for video games and video game accessories?

        It's cheaper to import games from New Zealand than it it to buy them here, generally speaking, once you take exchange rates into account. A game that costs NZ$100 converts to about AU$77 at the moment.

    This is more than just game prices. Its about tech hardware prices also.

    Why do we pay hundreds of dollars more for new tech like consoles, phones, tablets etc?

    I've posted this previously, but it fits here as well

    I know how local retail could justify the price of games and hardware or even improve sales figures. Try it with some customer service and you will be surprised how many loyal customers the business will retain.
    As it is atm I have no inclination to pay the premium for facebook browsing, disinterested and untrained (i.e. they do not know their products) sales assistants.

    Left it a bit late didn't you fellas? In case you haven't noticed, our dollar's been doing a terminal dive for the past 2 weeks. By the time this hearing's over with, our dollar will be so low that the publishers will be able to LEGITIMATELY use it as an excuse again.

    "He encouraged retailers and publishers to this as a real chance to educate consumers."

    Or just get their PR guys onto it. Not only will they be able to offer up absurd excuses, they'll also attempt to make us feel bad for even asking why we pay so much.

    On another note: when I buy games locally, I look on the back to see where it was made and it says "Made In Australia". I take it that means everything from the cover to the booklet to the disc itself was manufactured and printed here. So can someone explain this whole "it [higher prices] is because they have to pay import charges" argument to me again?

    Why can I pre-purchase Torchlight 2 for $20 now on Steam and $69.95 when EB start selling it?

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