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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Mattsworknamewarned about the scum there assoicating with. Looking at you GAWKER media07/28/2015 - 7:37pm
MattsworknameI think the only reason it was the first action was alot of people felt it was the only option that might have an actual impact. and to be honest, i don't see how they were exactly wrong. Plus, as recent events showed, soem times adverisers need to be07/28/2015 - 7:37pm
MattsworknameTo be honest, I was always kinda on edge about that, while I did not like that those news outlets had acted in the way theey did, i didn't like that we thought boycotting and advertiser attacks were the only recourse07/28/2015 - 7:36pm
MechaTama31And after AE questioned that same analogy, I described it as extreme hyperbole.07/28/2015 - 7:36pm
E. Zachary KnightMecha, The "bullying and threatening" thing is from an earlier shout by Matt. I asked you tht question because you compared the petition to someone threatening to shoot your child.07/28/2015 - 7:35pm
Andrew EisenBy the way, if anyone can see into alternate timelines, I've got $20 that says Target would have ignored the petition had it been presented at the game's launch instead of over a year later.07/28/2015 - 7:34pm
MechaTama31Write a "Gamers are Alive" article. Make a video highlighting positive things about games. Counter your opponent, don't try to silence them.07/28/2015 - 7:33pm
MechaTama31EZK: Who exactly are you quoting with "bullying and threatening"? But yes, I think attacking someone's livelihood because you disagree with their opinion is underhanded and damaging to discourse.07/28/2015 - 7:30pm
E. Zachary KnightOh no. A successful online petition could embolden people to do... what exactly? Do another online petition?07/28/2015 - 7:30pm
Andrew EisenToo bad the counter petition wasn't as popular. But again, yeah, it sucks. For the reasons I've stated over and over now.07/28/2015 - 7:29pm
MechaTama31otherwise want to.07/28/2015 - 7:27pm
MechaTama31AE: I mean like right and wrong, not like true and false. And even the perception that the petition worked could be damaging. It could embolden these types of people in the future, and make it less likely for a retailer to puch back even if they otherwi07/28/2015 - 7:27pm
Andrew EisenBut yes, it is a damn shame that Target decided to kowtow in this case, best business decision or not.07/28/2015 - 7:27pm
Andrew EisenNo one's free expression was impinged. Anyone is welcome to petition whatever they want. Anyone is free to counter petition (and did in this case). Target was free to make it's own decision on whether to continue to stock GTA V or not.07/28/2015 - 7:26pm
E. Zachary KnightMatt, Mecha, So, if a petition asking a store to not sell a game is "bullying and threatening" is a petition asking Intel to pull ads from Gamasutra "bullying and threatening"?07/28/2015 - 7:25pm
MattsworknameAndrew: The fact that it occured, not the reasons for it, is the bigger issue. That a small group like this, under any circumstances, could have that kind of impact, is a serious concern to anyone who values free expression07/28/2015 - 7:23pm
Andrew EisenMecha - As I already said, retailers always have to make that choice. This was just a factor influencing it.07/28/2015 - 7:21pm
Andrew EisenMecha - Yes, the petition was full of factual errors (something I've said repeatedly). And yes, I too don't agree with petitions that aim to remove something just so no one else can enjoy it.07/28/2015 - 7:21pm
MechaTama31AE: extreme hyperbole to illustrate my point, that it's not so much the choice they made, but the fact that they had to make the choice.07/28/2015 - 7:20pm
Andrew EisenMatt - I'm sure it was a factor but most media I saw that offered an opinion on the matter thought the petition was ill-timed bunk.07/28/2015 - 7:19pm
 

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