Australian government report tears apart "unjustifiable" games pricing

A report, published by the Australian government, has examined the pricing disparity of IT products in the region compared to other nations, coming to the conclusion that the overly-inflated cost of IT products, including games, are "unjustifiable."

The paper, from the House Standing Committee on Infrastructure and Communications, is entitled "At what cost? IT pricing and the Australia tax." It investigates a long-held Australian belief that large corporations are unfairly hiking equipment and content prices to the market, even when that content is delivered digitally.

"Particularly when it comes to digitally delivered content," says the report, "the Committee concluded that many IT products are more expensive in Australia because of regional pricing strategies implemented by major vendors and copyright holders. Consumers often refer to these pricing strategies as the Australia tax'.

"While the Committee recognises that businesses must remain free to set their own prices in a market economy, it has nonetheless made a range of recommendations that are intended to sharpen competition in Australian IT markets. The Committee hopes that these measures will increase downward pressure on IT prices and improve the access of Australian businesses and consumers to cheaper IT products."

Specifically naming games as one of the products under scrutiny, the paper looks at the effects of high pricing both on the consumers and the producers of games. The differences in cost are extreme.

"Games: submissions compared the prices of more than 70 products," the report notes. "The average price difference was 84 per cent, while the median difference was 61 per cent."

Speaking to Mr Nic Watt, Creative Director of local studio Nnooo, the report's authors find that Australians are expected to pay around 45 per cent more for a Maya 3D licence from Autodesk than users in other countries.

"As a games developer for PlayStation (Sony), Wii U (Nintendo) and Nintendo 3DS we have to use one of these packages to be able to create and export our 3D artwork into our games," said Watt in reference to products from Adobe and Autodesk.

Further investigation revealed that, not only are boxed products much more expensive, with one major exception, but digital games actually show an even greater disparity.

"Choice compared the prices for a number of computer games, again finding substantial price differentials. The submission compared the price of 20 recent and new-release games sold on EB Games' Australian website against the same company's US website. Only one game - The Elder Scrolls V: Skyrim - was at parity with the US, while the majority of games were between 40 per cent to 90 per cent more expensive on the Australian website.

"Digitally distributed games showed even larger price differences. The Choice submission highlighted price differentials for games sold through 'Steam', a popular online-only games platform, and showed consistently higher prices in Australia compared to the US for substantially identical digitally delivered content. The worst price differentials on Steam can be 200 to 300 per cent more expensive in Australia. Choice highlighted the ten products with the biggest price differences: The average price difference for these 10 games is 232 per cent, even though, like the iTunes products, they can be delivered with minimal rental, labour and distribution costs."

Whilst Steam, Origin, PSN and XBL were highlighted as being particularly gouging of consumers in the region, it was noted that, on Steam at least, prices were set by the publisher and not Valve itself. In fact, those games published by Valve on Steam tended to show parity with global pricing.

Incredibly, in some cases, it's actually cheaper for an Australian gamer to buy a boxed copy of a game from the UK and have it shipped to the other side of the world than it is to buy it online. The report notes:

"In some cases price disparities in relation to digitally delivered games are so large that it can be substantially cheaper for Australian consumers to purchase a physical copy of new release games from a UK-based online store and have it shipped 15,000km to Australia. Mr Scott Nelson, for example, recounts finding a then new-release game, Mass Effect 3, on sale at Electronic Arts' 'Origin' digital store for A$79.99, while a physical copy could be purchased and shipped to Australia from the UK-based ozgameshop.com for A$38.99."

Interestingly, one of the findings of the report seems to recommend that consumers are entitled to ignore and circumvent mechanisms which enforce geographical boundaries on distribution, which would presumably include staggered global releases.

"The Committee recommends that the Australian Government amend Copyright Act's section 10(1) anti-circumvention provisions to clarify and secure consumers' rights to circumvent technological protection measures that control geographic market segmentation."