Green Man Gaming Blames Australian Price Hikes On Publishers And 'Local Retail Feedback'

After publicly stating that Australian customers would never have to worry about regional price hikes, Green Man Gaming has recently raised prices on 2K published titles Borderlands 2 and XCOM from $49.99 to a new ANZ edition price of $71.99, causing a backlash from Australians using the service.

"Idiotic move by GMG," wrote one user, "they obviously think we are too stupid in this part of the world to notice a sudden and significant increase in prices."

"I have also been a strong advocate for GMG in the past so it's a shame that they have gone down this route, both for them and for us," said another.

Green Man Gaming had been popular among Australian PC gamers — mainly because the company was previously vocal about localised price gouging, and not going down that particular route. Part of the issue was that Green Man Gaming, a company that prided itself on transparency on pricing, remained silent to begin with, and only addressed the Australian pricing of Borderlands 2 and XCOM after numerous complaints.

"[W]e have had a number of enquiries about price increases on Borderlands 2 and XCOM Enemy Unknown in Australia and New Zealand," read Green Man's statement, released yesterday. "This was done at the request of the publisher based on local retailer feedback. We would rather not have had to do this but we really value the relationship with our publishing partner."

Considering what we know of pricing policies on other online stores, publishers tend to set prices on services like Green Man and Steam. And from speaking to representatives from publishers locally, much of this pricing is set overseas. The pricing is set this way because local retailers simply cannot afford to compete with digital prices.

It's a complicated situation, and it won't be resolved easily. Local retailers are being forced to pay high cost price for PC games and typically work with $10 margins on boxed copies of PC games — a low margin when you consider the overheads of retail, rent, wages, etc. Local publishers have also been quick to pass the buck, stating that lower cost prices can only result in the closure of local offices in Australia. Considering the role that local offices play in marketing, selling and distributing retail titles in this country, the local industry could potentially suffer from a reduction of prices across the board.

It's a tough one. And the Green Man Gaming situation is a perfect example of that. Ultimately, the consumer loses out and that can't be good for business in the long term — especially when you consider the fact the multiple other methods savvy consumers have to purchase games. The model is broken, and it needs fixing.

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Comments

    Retail game stores are going the way of Video Ezy and Civic Video. They're a service that served a purpose, but they're becoming obsolete.

      That'd be great and all if you live in somewhere thath as the NBN installed. For the rest of us though, retail stores are the only means we have of reliably getting our games. Shipping from overseas has it's own hassles.

        I think download limits are more of an issue than current network speeds. Recent games can be anywhere between 3GB and 20GB, which can eat up your quota fast, especially if you're sharing a limited plan with a household.

          Even if you're on a decent amount (200GB onwards), after downloading a game, there are patches and patches to download. I totally agree about download limits. Although speeds help too.

            If you're a fair way away from an interchange, it's next to impossible to get decent speeds, means you're waiting hours if not days for a game to download, and in the meantime you have to pause to just be able to browse the web. That said, even buying a game retail these days is a problem. I think it was Homefront, I bought the game retail so I could play it straight away, installed it, then found I still had to download 9gb of the game's data from bloody Steam. Was not amused.

              then you found out downloading the games patch took longer than completing the damn game itself...

              This is not an exaggeration by any means. at all.

    Meh, I'll keep buying games from g2play and CDKeysHere, doesn't bother me all that much.

      Yeah I bought the CD Key from Ozgameshop for $30 for BL2 PC, I had already spent $60 getting the ps3 version and then all my friends decided it would be a good idea to get the pc version instead xD

    Physical stores will always thrive on console games. I honestly don't see the issue to why online distribution has to have similar prices to retailers. If they can't compete with the prices, that's not the digital distributor's problem.

      But it probably doesn't fit the publisher's business plan. They are expecting their physical stores to make a certain amount of profit, and so instead of providing incentive to use a retail store, they think it's a better idea to provide decentive (is that a word?) to use more convenient methods. PSN is shocking for it. Fifa 13 was $109.99 on PSN when it was released!!

      The issue isn't to do with the digital distributors. The issue is that the retailers pressure the publishers to provide competitive pricing standards across the board (that is, prices sufficiently high that the retailers can sell at a profit), so the publishers are able to demand minimum pricing in exchange for a distribution supply contract. Failing to meet that minimum price can result in the termination of the contract, and lead to a loss for that distributor as they can no longer supply the demand for that game, so the customers go elsewhere. Recently this has been bypassed by certain groups through grey imports and international supply via localised agreements, but ultimately it is indeed the publisher who wields the biggest axe when it comes to setting the prices, not the retailers or distributors themselves, and they will set the price according to what the retailers can afford in order to maintain their relationship with them rather than bowing to public pressure and setting a flat international price. The only way this will be avoided is through titles completely bypassing the retailers and going straight to exclusive digital distribution, as this cuts the retailers demands out of the equation completely, or by avoiding the publisher through crowdfunding and so making it impossible for the retailers to exert pressure through supply contracts as there is no publisher demanding minimum total sales to recoup their expenses.

        retailers pressure the publishers to provide... prices sufficiently high..."
        Wait, you're claiming that retailers want publishers to charge them higher cost prices? So that they can somehow get bigger margins, despite competing against cheaper imports?

        I think you've got that completely backwards.

          I think you have misunderstood me. Because the item being sold is a software license rather than an actual product, the producers can dictate the minimum selling price to the distributors (digital and retail). Retailers can pressure producers to keep this price at a level that will allow them to pay the producers their royalty for the sale and still make a profit after paying wages and overhead. The producers get the same share regardless of what they charge or the type of distributor, be it digital or retail.

    brick & mortar stores are seriously clawing at their coffin lid right now.

    i have been buying my games and hardware online now for about 5 years simply because i dont get hounded and the prices are cheaper

    so they are acting like a stubborn child demanding the digital distribution platforms raise their prices??

    yeah nah

    From what I've seen over the past few years - cost price of video games *is* actually coming down. Particularly for console titles (but also I believe for PC). It's not a huge amount - but it used to be that you'd see the cost price for titles be significantly more than the retail price overseas. It seems to be far less often the case. Hopefully its an indication that we're moving in the right direction.

      PC games are around $10 cheaper everywhere in retail at the moment.

        Almost always have been though, or at least as long as I've been a gamer.

        Yeah, game prices right now are pretty much back to what they were in Xbox/PS2 days, 79 - 99 dollars. Havent seen a 119 dollar game in quite a while?

      I disagree - over the past few years, the AUD vs the USD has skyrocketed. Perhaps $90 was justifiable when our dollar was a fair bit less than the USD, but now we're above them, and we're STILL being charged $90+ for many games these days.

      Some prices have come down, but in general we're still seeing $99 ($109 if on console) for many games that come out which, considering how our dollar is going, is crap.

      More and more I'm just skipping retail stores altogether - I haven't managed to get my last few preorders - despite paying months in advance - because AU never seems to get enough stock. Yet online stores I order from, some overseas, I don't have any issues with.

        Right... which is why its all ridiculous... except that from what I've seen the cost price (and often the RRP) of games has actually come down by about $10. Yes it should have come down closer to $50 (due to parity with the US dollar), but its still a movement in the right direction. Look at the RRP on a lot of Wii U titles - most of them are $79 or $89 RRP (with some shovel-ware hitting $69). When the Wii came out, the COST price (inc GST) was around $89 for most games.
        We're still in an unfair position - but things are slowly improving (as to whether that continues is anyone's guess).

    If digital distributors do not follow Steam and Good Ol Games lead, they will crash & burn. If retail does not follow Ozgameshop & MightyApe, they to will crash & burn. I love going to my local retailers and seeing what they've got, but I don't get excited anymore - when second-hand copies cost more than sealed, brand new copies on Ozgameshop. How can anyone?

      Steam has some crazy prices for Australia though. Valve and some other publishers on Steam might be pricing right, but there's plenty who still don't get it. Then there's the region locking...

      I often go to local retail game stores just to browse games. The last physical game I bought from an Australian retailer was Final Fantasy XIII-2 at JB. And that was just an impulse purchase.

      When you see a game like Sanctum in EB for $50, and then on Steam for $2.50 or $5 or something that very same day, it's hard to understand how these companies stay in business. I import all my physical copies of games now (Ozgameshop =D) because, like you said, it's cheaper to get a brand new boxed copy than a second hand copy missing its manual.

      Why do Ozgameshop offer us free international shipping, but EB want to charge me stupid postage charges on an overpriced game when their warehouse is in my city?!

    Bought BL2 for Steam from G2Play just before Christmas. 22 Aus dollars. Would have been 70 (or worse) from an Oz storefront.
    I'm happy to pay mark up for retail. I'm not happy getting gouged the fuck out of so some suit can justify his exorbitant paycheck.
    There's no excuse for it. When they bring some transparency to the pricing of Au gaming I'll consider shopping retail.

    Last edited 28/12/12 12:02 pm

      Be more uninformed. Comparatively executive pay in Australia is far more conservative to that in the US. It's more likely that Australia's ridiculously high minimum wage and rents have more of an impact.

      Luckily we have alternatives, but it's becoming a more complicated situation. Next gen consoles will see a greater push towards digital content to extinguish the pre-owned market. Game (& Game UK) is gone; how long can EB and the others last?

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    Last edited 19/06/15 9:59 am

      I actually would have preferred they took the offending titles down altogether. Maybe then they would have saved themselves this anger from their user base. It might have finally made the publishers take a long hard look at themselves also.

    And both of these games are Steamworks titles so not a single fark was given by anyone who uses more than one online store... good job hurting one more retailer and not helping the local situation one bit there, 2K. The whole situation is long overdue for a major shakeup and if that means the temporary death of retail and local offices etc. then so be it. Something new and more sustainable will rise from the ashes, and I'll continue buying digital/overseas until it does even if it isn't cheaper.

    This sounds like complete crap. I remember seeing games like Oblivion and Mass Effect on XBL and PSN a few years ago (talking like 2009ish) still going for the full $100 price while they'd be $40 or $50 at GAME/EB. These games were from 2006 and 2007 too, so there was no reason for them to be such a high price.

    It really grinds my shit when retailers and publishers first completely dodge the topic of price gouging (anyone remember the series of articles Kotaku put out asking publishers why this was the case?), and then try and justify it a few years later. It's pathetic.

      Unfortunately you seem to be wildly misinformed on the issue. Do some real research instead of resorting to knee-jerk anger.

    Damn and I was hoping to pick up XCOM after the Christmas Break, Ozgameshop and Game-lane both still have it listed as "Out of Stock" too grrr

    This is why only government involvement, as per recent investigations into the industry, can really get this stuff sorted out. It's nothing to do with the retail shops or the online shops (whether local or overseas based).. it's the publishers. The problem really is that as they are the owners of those products, they can sell them for whatever they like.. they could, if they wanted (to lose sales), increase the price to $71.99 in America too.. that's their right as the owner of the product to do that..

    The other side of the coin is that this means that retail sales locally are going to fall.. even if people are not actively boycotting the publisher, they simply can't afford to buy that many games priced at those high amounts. So people will be forced into shopping online at overseas places that sell non-Australian copies of games that work in this country, or by simply pirating the games etc..

    It's a short term profit boost for the companies that can't last.. but they are really pushing it till it breaks.

    I'd really like to get some direct feedback from the publishers on these issues.. that's where the real story lays. Not with GMG or twittering mad consumers. That would be a real story.. a real article.. with all this talk about overpricing for many years, all we've heard is rumors or excuses.. never any concrete responses from the people who are pulling the strings.

      If I recall correctly, some publishers have already spoken about this. They came up with lame excuses like the 'weak' AU dollar, and the cost of shipping games to the country, even though all the PS3 games I have say, 'Manufactured in Australia' on the box. Except Ultimate Marvel v Capcom 3, which says,'Manufactured in Austria'.

        Yup.. exactly.. lame excuses.. they have the balls to pull these prices out of their asses but not the balls to come out and be truth about why they are doing it and the answer is: because they can.

    I get their lousy 'justification' for hiking the base game prices, but what's their excuse for the DLC which DOESN'T HAVE A RETAIL DISTRIBUTION in the first place? At least with GMG's various discounts it can still be had cheaper if you get in at the right time (in my case that 35% off voucher from the survey went nicely with the then $30 BL2 Season Pass, and right atm 50% off the $40 to still bring it down around $20)

    Until someone perfects their DRM, there will always be a need for physical copies of games.

    I just don't trust digital fully enough yet to go full digital for console games.

    PC? Different story. I don't buy TOO many games on Steam despite the fact that my PC games will disappear if Steam does, which is one of the reasons I've always been concerned about Steam.

    Sega may be gone, but my Dreamcast and it's 35 or so games can still be played.

    'tough one' my arse. Hypocrites.

    An interesting day when EB Games is cheaper than Green Man Gaming: http://www.playstrat.com/2012/12/green-man-gaming-more-expensive-than-eb.html

    They're admitting to a monopoly and price fixing lol.

    I understand that Australia is a comparatively high-cost country in which to operate, but seriously - do they not have marketing, distribution and local office liabilities factored into the base cost as it stands in the US, the UK, Europe - actually, the rest of the damn world?
    If the market here is too small or too thinly spread to be able to advertise or distribute games without bumping the price by 50 to 100%, perhaps that's an indicator that the publishers need to work on another model.
    Alternatively, this is a cynical cash grab on the part of the publishers based on the relative willingness of Australians to drop a dollar on electronic entertainment. Which is fine - that's how business works. But when you start shutting down legitimate channels for consumers to make alternative purchasing decisions, people are going to get angry.

    Physical retail on PC games in Australia is already on life support, why not pull the plug already?

    Even from a profit gouging perspective surely it is cheaper to wind down pc game operations in the region and go all digital at an international price then keep going with this broken model of one section of shelf in a games store that is 50% Sims 25% WoW 25% Misc?

    I would say the only reason they give two shits is that they are afraid that at the prices PC currently enjoys console gamers are likely to jump ship.

    " We would rather not have had to do this but we really value the relationship with our publishing partner."

    Why not just a big FUCK YOU PUBLISHER?
    YOU are part of the problem GMG!
    If every online store said NO to price gouging....
    Then the publisher end up pulling all their titles from Australia on all the major online stores.

    Then you know what would happen?
    The internet would fucking crush them, the AU government would have their hand forced and The publisher would back peddle.... or they risk a Major PR disaster.

    Just say no to price gouging and stick to your guns.
    Otherwise your just another online asshole store ripping off Australians.
    No... you cant blame the publisher... YOU made the choice to agree to it.
    YOU are responsible Green Man Gaming.

      No, we (customers) are responsible. Publishers will continue to gouge as long as there are enough berks paying what they ask. The only reason the local market has seen any shift at all is in response to people voting with their cash and buying overseas and online, and the only way this problem will ever be ended is we refuse to buy en masse. No digital retailer will risk a publisher pulling their entire catalogue for one tiny section of their customer base and it's ludicrous to think they should.

        Well theoretically, numbers are the only way these companies take notice, yes. Unfortunately, there's always a major risk that these figures will be used to blame piracy or deem the Australian market a lost cause.

        I think the government really needs to step in and start forcing some sort of parity.

          If you've ever check game releases in AU compared to EU, US and JP its pretty safe to say they practically deem AU as a "lost cause" market anyway....

          Barely any real local releases most of them are even later or on par w/ EU if we're lucky. Unless their *big name* games/franchises. So what do they do? give us a pitiful drip feed of releases w/ "australia tax" to recoop selling at a "loss" region....

          @moofactory: Nice theory... let me tell you the "real world" version. If you really think cutting ties w/ a local pub is "easy" and "stick to your guns" is worth it in the business world especially on a small market like AU then you're going to find your business closing shop really fast really quickly.

          Sure GMG can stick to their principles and if enough" online shops do it there might be eventual progress... except to "stick to your guns" means being able to financially support your business when your publisher/support backs out. In a small business scale area like AU do you *really* think any retailer can afford that unless it was either EB or JB? Principles are all fine and well but it doesn't feed the family. Unless the local market gets some sort of support legislation wise to stop the gouging then we're stuck w/ this sham of a system. Hooray for Free Trade! >.>

    Unfortunate situation with GMG in the middle.

    Proxy?

    So this....
    This was done at the request of the publisher based on local retailer feedback. We would rather not have had to do this but we really value the relationship with our publishing partner.

    And then this from the ACCC...
    Agreements between competing businesses to fix prices are illegal under the Competition and Consumer Act 2010.

    How is it that no one gets pinged for this?

      My immediate thought too. This seems to be a pretty clean cut case of price-fixing. I'm sure the ACCC will take a pretty dim view of this.

      For those who are concerned, you can make a complaint about potential breaches of the Competition and Consumer Act here:
      http://www.accc.gov.au/content/index.phtml/itemId/54217

      And some more information about price fixing according to the ACCC:
      http://www.accc.gov.au/content/index.phtml/itemId/322980

        I've sent this through to them, I'd encourage others to do so as well.

      It's not an agreement between competing businesses. The minimum price is set by the publisher, and the distributor can either comply or have their contract terminated, or even worse from their point of view, miss out on future supply contracts. Because it's the publisher setting the price and not the distributors/retailers, it is not technically a violation the ACCC can ping them on. Retailers and distributors can then have sales in which they offer a reduction of the base price, but the base price must remain above a certain level to maintain the supply contract. Some stores will be offered better prices in exchange for bulk orders as well, though, so can offer lower point-of-sale prices (BigW, JB-HiFi, etc).

        It's an agreement for all sellers to sell at the same price regardless of wether its facilitated through a third party. But ok, if its not and its as you say where a publisher is setting a minimum price then is it not resale price maintenance? Which is also illegal.
        http://www.accc.gov.au/content/index.phtml/itemId/322982

          I'm not 100% sure, but I suspect it works differently in the case of software, because what the "reseller" is technically selling is a license to use the software, not the software itself. Therefore, the retailer is viewed as a distributor rather than a reseller. An interesting thing to look into, perhaps.

        Nope, that's very illegal. Retailers can sell a product they own for any price they want to. If the supplier is coercing them in to selling it for a different price they're breaking the law.

          As I stated above, I believe that because the retailer is technically a software distributor rather than a reseller, different rules apply

            The "retailer" isn't involved here. This is against 2K Australia. They are coercing companies to artificially inflate prices for Australian consumers.

    Aside from the convenience of not having to leave your home, I don't see any up side to digital. So many jobs will be lost if retail stores completely buckle. Jb, Eb, rental stores, dept stores. We underestimate just how much money is involved in the gaming industry. Particularly regarding psn and xbl, there will be zero competition, pricing is fixed and you can't trade. How is this good?

      How is it good to work to have to work up to twice as long at work, making someone else profit - just so you can play a game that the rest of the world is paying far less for?

      It's a joke. I wanted to buy Mario Galaxy 2, recently and it's still like 80$ in JB. 2 years on and $80? Haha. Rigghhht.

      I would rather a physical copy, myself - but when the buying power of one man wanting a single copy is $30 cheaper (from the UK) than buying on a retail store shelf CLEARLY, there is something wrong with the industry. Count the number of industries that get away with that type of bullshit - where one man wanting one of something can beat the "might" of mass importation.

      Fuck the retail stores - I've got a limited amount of time on this planet and fuck them if they think that I'm going spend any more time than necessary at work, to subsidise their largely peripheral business. They aren't contributing ANYTHING to PC gaming except getting physical copies to people who don't have decent internet access - and there is already a mechanism for that and it is the postman. If I really do want a physical copy of a game, I'll import. Otherwise, it doesn't matter, I go with digital distribution because contrary to all the conspiracy theories and fears of the insecure about DRM and content disappearing and no longer being available, there have been very few instances of these fears panning out.

      I mildly respect that some aspects of this move to digital will harm jobs in this country - but nobody said that EB couldn't open their own digital store and sell for the fair price. Sadly, this is all symptomatic of poorly run businesses and their final attempts to suck an industry dry.

    Amazon and russian stores are getting my money at the moment. I can only hope that from all of this recent publicity that GMG get a lot less ANZ buyers. It's definitely a double edged sword, if GMG had their own ANZ offices, they'd get pinged by ACCC for price collusion, but since there not, they can just get away with it. I'd rather see them just not offer any 2K games at all to ANZ buyers, at least then, they'd be doing the right thing by their customers, rather than bending over and letting the publishers tell them what to do.

    not a big suprise. 2k games pulled this exact same shit with steam 2 weeks after the original borderlands was released. Its 2K games being EA lite

      Nail on head

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