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Australians Pay Sky High Prices For Digital Games

| 29 Jul 2013 13:02
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IT companies seem to have very little interest in addressing consumer concerns.

So if you were to purchase, say, Dishonored digitally, and you live in Sydney, Australia, how much would you expect to pay? Maybe Steam has it for the US price, but if it doesn't, then what? Well, an 84% mark-up is what, as Australia is far and away the most expensive place on the planet for digital media. Mark-ups average a 50% premium for pretty much everything, from books, to music, to software, but games are among the most expensive products to buy digitally. "In some cases price disparities in relation to digitally delivered games are so large," reports the House of Representatives Committee inquiring into IT pricing,"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." Or, y'know, pirate; not that anyone would ever do such a thing, of course.

So why should this be so? There's several different factors involved. Local costs of doing business, among other area-specific factors like statutory regulation, are cited by the Australian Information Industry Association as being of some importance. However the big issue is price discrimination by the suppliers, which high prices are then passed on to the public. "It is clear," says the Committee, "that international price discrimination is being practiced against some Australian retailers, to the detriment of Australian consumers." Distributors are trying to create what's described as "walled gardens", in which the ecosystem is locked up and controlled by a single retailer or supplier. It doesn't help that Australia's a small market for IT products - lots of people want them, there just aren't lots of people in Australia comparative to elsewhere - which means Australia lacks the leverage to get a better price deal. But games? Often those are played on US servers, and downloaded from a US portal. "We are buying a product from this company in exactly the same manner as a US citizen," says one consumer to the Committee, "yet we Australian consumers can pay up to double the price." No representatives from the gaming industry gave any testimony to the Committee.

The Committee wasn't very happy with the responses given it by the IT industry. Its submissions were "of limited benefit to the inquiry and in the Committee's view did very little to address consumers' concerns." Representatives from Apple, Adobe and Microsoft had to be issued summonses to appear and give evidence; polite invitations had been ignored. Meanwhile those industry groups that did testify - the Australian Home Entertainment Distributors Association, for one - cite piracy as being a major factor. "It is important for the Committee to recognize," says the AHEDA, "that Australia has some of the highest rates of online piracy infringements in the world." But the artificial barriers to content created by rights holders, as the Communications Alliance points out, is one of the main motivators for piracy; make content legal and affordable, and the problem solves itself. So long as geoblocking - using technology to enforce price discrimination against a particular region - is an issue in Australia, there will be piracy.

Naturally the suppliers have a different take on geoblocking. "You would need to take into account the impact that [relaxing geoblocking] would have," says Adobe, "on organizations globally being willing to invest in the country and run a local operation employing staff and building an ecosystem that delivers inputs and adds value to the economy."

Source: House of Representatives Committee

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