Australia’s Productivity Commission Tackles Video Game Prices

August 8, 2011 -

Australia's Productivity Commission, an independent advisory board that focuses on the "economic, social and environmental issues affecting the welfare of Australians," is now setting its sights on video game prices in the country. A new report entitled "Economic Structure and Performance of the Australian Retail Industry" details the sticker shock Australians face when it comes to buying video games. The report details the practice by publishers of artificially increasing the price of games. The Productivity Commission roundly condemns this practice in its report.

The Commission says that it is aware of the "longstanding practice" by international suppliers to set different regional prices. This effectively treats consumers in one region as willing to pay higher prices than those in other countries. Australian consumers are quite aware of this practice because they often see that consumers in other regions are paying significantly less than they are.

Some international suppliers have attempted to defend the practice by saying that it is "due to the cost of supplying a remote and relatively small market like Australia" which has its own unique requirements. These arguments are especially ridiculous in the case of digital downloads such as music, software and videos, where the costs of delivery to the customer are negligible and uniform to what everyone else in the world is paying.

You can read the full report here and an in-depth analysis of it at Kotaku Australia.


Comments

Re: Australia’s Productivity Commission Tackles Video Game ...

It's also due to the fact that the exchange rate is a very poor indicator of the worth of a currency. Its exchange rate worth is not its purchasing power (i.e. real) worth. To get the real worth of a currency we really have to look at what you can buy for that currency (excluding other currencies), but for various reasons a good estimate is given by PPP (purchasing power parity) adjustment.

There's a massive difference between Australia's nominal GDP (which is subject to aberrations of exchange rate) and Australia's PPP-adjusted GDP. In 2010, Australia's nominal GDP per capita was around $56,000 (US), while its PPP-adjusted GDP per capita was only around $40,000.

What this basically means is that in 2010, one Australian dollar was in real terms only worth around 70% of what the exchange rate with the USA made it look like it was worth. As the AUD continues to climb against the USD thanks to Australia's strong economy, the gulf between nominal (exchange rate) value and real (purchasing power) value only grows.

 
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MaskedPixelanteNumber 3: Night Dive was brought to the attention of the public by a massive game recovery, and yet most of their released catalogue consists of games that other people did the hard work of getting re-released.04/17/2014 - 8:46pm
MaskedPixelanteNumber 2: If Humongous Entertainment wanted their stuff on Steam, why didn't they talk to their parent company, which does have a number of games published on Steam?04/17/2014 - 8:45pm
MaskedPixelanteNumber 1: When Night Dive spent the better part of a year teasing the return of true classics, having their big content dump be edutainment is kind of a kick in the stomach.04/17/2014 - 8:44pm
Matthew Wilsonhttp://www.giantbomb.com/articles/jeff-gerstmann-heads-to-new-york-takes-questions/1100-4900/ He talks about the future games press and the games industry. It is worth your time even though it is a bit long, and stay for the QA. There are some good QA04/17/2014 - 5:28pm
IanCErm so they shouldn't sell edutainment at all? Why?04/17/2014 - 4:42pm
MaskedPixelanteNot that linkable, go onto Steam and there's stuff like Pajama Sam on the front-page, courtesy of Night Dive.04/17/2014 - 4:13pm
Andrew EisenOkay, again, please, please, PLEASE get in a habit of linking to whatever you're talking about.04/17/2014 - 4:05pm
MaskedPixelanteAnother round of Night Dive teasing and promising turns out to be stupid edutainment games. Thanks for wasting all our time, guys. See you never.04/17/2014 - 3:44pm
Matthew WilsonAgain the consequences were not only foreseeable, but very likely. anyone who understood supply demand curvs knew that was going to happen. SF has been a econ/trade hub for the last hundred years.04/17/2014 - 2:45pm
Andrew EisenMixedPixelante - Would you like to expand on that?04/17/2014 - 2:43pm
MaskedPixelanteWell, I am officially done with Night Dive Studios. Unless they can bring something worthwhile back, I'm never buying another game from them.04/17/2014 - 2:29pm
PHX Corphttp://www.msnbc.com/ronan-farrow/watch/video-games-continue-to-break-the-mold-229561923638 Ronan Farrow Daily on Video games breaking the mold04/17/2014 - 2:13pm
NeenekoAh yes, because by building something nice they were just asking for people to come push them out. Consequences are protested all the time when other people are implementing them.04/17/2014 - 2:06pm
Matthew Wilsonok than they should not protest when the consequences of that choice occur.04/17/2014 - 1:06pm
NeenekoIf people want tall buildings, plenty of other cities with them. Part of freedom and markets is communities deciding what they do and do not want built in their collective space.04/17/2014 - 12:55pm
Sora-ChanI realize that they have ways getting around it, but one reason might be due to earthquakes.04/17/2014 - 4:42am
Matthew WilsonSF is a tech/ economic/ trade center it should be mostly tail building. this whole problem is because of the lack of tail buildings. How would having tail apartment buildings destroy SF? having tail buildings has not runed other cities around the US/world04/16/2014 - 10:51pm
Matthew WilsonAgain the issue is you can not build upwards anywhere in SF at the moment, and no you would not. You would bring prices to where they should have been before the market distortion. those prices are not economic or socially healthy.04/16/2014 - 10:46pm
ZippyDSMleeYou still wind up pushing people out of the non high rise aeras but tis least damage you can do all things considered.04/16/2014 - 10:26pm
ZippyDSMleeANd by mindlessly building upward you make it like every place else hurting property prices,ect,ect. You'll have to slowly segment the region into aeras where you will never build upward then alow some aeras to build upward.04/16/2014 - 10:25pm
 

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