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The "You live where?" Game Tax

Posted 12th November 2010 at 11:11 AM by Rage

The hype surrounding the recent release of Call of Duty: Black Ops has definitely paid off for Treyarch and Activision with the sales figures eclipsing last year's launch of Modern Warfare 2. The first day of sales totaled 5.6 million copies with a total $360 million. And I must admit, the hype has had me drawn in as well. Although I'm yet to part with my hard earned cash until the initial bugs have been ironed out, I have been on the look out for the best price available.

As a recent "subscriber" to the "STEAM way", I've looked daily at the prices on their website. Not really believing they will drop the price for COD, I mean, let's face it, who would when people are still willing to pay it, but just looking at the prices and specials of all the games. Recent titles I've bought are both Left 4 Dead and Left 4 Dead 2 and Team Fortress 2. For those 3 titles, I parted with a grand total of $27.77US, which is now even less in our almighty Aussie dollar. But the asking price for COD:BO? Well, that will be $89.99.

Am I surprised by that? Not at all. Would I expect it for less on only it's 3rd day after release? Not by any means. In fact, I think $89.99US is not too bad a price for a new release game. I mean, that's what I've come to expect, right?

Well, this brings me to my issue. STEAM are currently selling COD:BO for $89.99US to me, because I'm here in Australia, but if I had a US IP address, I could get it for $59.99US. Now convert that again to our almighty Aussie dollar, and it is even less again (albeit, not by much). So I have a bit of a question in my mind here. If STEAM provide me with a digital copy of the game, which means NO SHIPPING, what am I paying the extra $30 for? Or to put it into perspective, MORE THAN the total cost of my most recent THREE game purchases? Or to put it another way, 50% more than if I was American?

As a programmer, I do have to purchase software on occasion, but as far as I can tell, I don't get routed through a filter that puts me into a parallel website with exorbitant "Australian" prices. I pay the same as everyone else in the world. When I recently bought the Atlassian pack, I paid the same as everyone else. Am I being discriminated against because I live in Australia?

Are STEAM not simply an online store? If this is the case, then surely they are only paying tax to the country they reside in, that being America. Surely our awesome Australian government doesn't apply some other secret "super" tax to the gaming community?

This is not the first time games have been sold on STEAM at higher prices to the "non American" market either. Bioshock 2 was $49.99US for American gamers and $79.99US for us Australians. So it would appear that things are not changing anytime soon.

But maybe I'm being a bit harsh on STEAM. Perhaps it is the publishers that are requiring STEAM to put this markup on the Australian gamers. I mean, if I go to Ebay to buy Call of Duty: Black Ops, I still have to pay ..... oh wait, no, I can get it there for $65AU, delivered to my door and that comes with the DVD and instruction manual and packaging. Well, I'm at a loss now.

So, my question remains; why am I being taxed an extra 50% on software, on a game, just because I live in Australia?

End Rant.
Ty (aka. Rage)
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  1. Old Comment
    maddog2204's Avatar
    I think we all would love to know the answer to this ridiculous price variance between countries. Thanks for sharing Rage.
    Posted 12th November 2010 at 05:01 PM by maddog2204 maddog2204 is offline
  2. Old Comment
    Schizo's Avatar
    *putting on my MBA hat*

    My initial reaction would be that it has to do with recouping the costs associated with barriers of entry into a market in a foreign country. I'm not sure if there are any tariffs or taxes levied on intellectual property in Australia that is imported, but that could be a source of the higher costs. Even if the company is selling the product digitally, they still would need to be authorized to do business in that country in some fashion.

    Another possibility may have to do with the variance in currency values. Prices on games tend to be quite static for new releases, and just because the currency value has changed, publishers aren't too terribly keen to revise their pricing (especially if it works out in favor for them - cha-ching!). However, if they started losing money at that price point, you better believe your prices would be going up.

    Of course, you could also be getting the short end of the stick whereby they're simply jacking the prices up on you...simply because they can get away with it.
    Posted 13th November 2010 at 01:49 AM by Schizo Schizo is offline

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