Friday, December 19th 2008
Valve Inflicts European Gamers with $1 = €1 Equation
At the time of preparing this report, US $1.42 makes a Euro. Here's what Valve seems to be pricing its games and those of its affiliates on the Steam platform as: $1 = €1, ignoring exchange rates, meaning that if a product costs say $20 on Steam, you will be charged €20 (approximately $27.86), if you are buying from the EU. Several game titles have been priced in this fashion. Call of Duty 4, priced at US $49.99 ($59.4 after applicable taxes) is tagged at €49,99 ($70 before applicable taxes).
In reaction to this, disgruntled European gamers have started protesting this move by Valve on online forums, an example of which can be found on Valve's own Steam Users' Forums. Also found on the same board is a user group named 1€ ≠ 1$. Certain groups have even started reporting this to the European Commission Consumer Cell. The gamers allege that they have been given a largely unfair pricing scheme with products on the Steam platform, that violates trade laws. The Steam platform serves gamers from around the world with a common platform to purchase games, and coordinates multiplayer gaming and updates. An unhappy consumer base from one of the largest markets in the world could certainly impact on its revenues.
Source:
Tweakers.net
In reaction to this, disgruntled European gamers have started protesting this move by Valve on online forums, an example of which can be found on Valve's own Steam Users' Forums. Also found on the same board is a user group named 1€ ≠ 1$. Certain groups have even started reporting this to the European Commission Consumer Cell. The gamers allege that they have been given a largely unfair pricing scheme with products on the Steam platform, that violates trade laws. The Steam platform serves gamers from around the world with a common platform to purchase games, and coordinates multiplayer gaming and updates. An unhappy consumer base from one of the largest markets in the world could certainly impact on its revenues.
196 Comments on Valve Inflicts European Gamers with $1 = €1 Equation
FYI here in the States some games are CHEAPER in the store than on Steam due to local state taxes and such. Also you leave out the fact that VAT taxes are goverened by the local regions goverment/state/country. And to sell a piece of software with or without taxes are defined by local laws. These are the "issues" Mike was talking about. Until then you get a 1-1 ratio. But rest assured you WILL pay the same as what you pay in the store. Steam has never been cheaper than the store except on weekend deals.
Again sorry the Euro wont go as far as it used to but them are the breaks. Write your local King, Prime Minister or Emperor or who ever dictates your laws. Just dont expect Valve to absorb any governments greed.
This is ALL about paying a reasonable price for what you get, according to what it costs. If delivering a game through Steam costs $50 in the US, it costs $50+VAT in EU. Period.
I don't see what the problem is here. They are following the same business model as everyone else now. You don't like it? Don't buy it. Simple as that.
People in the US have to deal with the fact that it's not the Euro that has been getting stronger in the world, it's the dollar that has been falling (thank your government for that). If we can buy more things in dollars is not different than with Taiwan for example. If something costs $50 to make and have a profit, it is that what you should charge and not more. Of course, I supose you have the "right" to charge whatever you want (is not moral though), but talk straight when doing so and not in a shaddy manner with lots of false and unbelievable excuses...
And your logic still fails because this is still the software market. Every other facet of your software market follows this same trend, whether it be a digital or physical medium. The means of package or delivery means nothing what so ever.
In US out of the $50: $30 is for the publisher, developer and associates. The other $20 is for the delivery, storage (physical which is much more expensive than digital BTW) and seller salaries.
In EU out of 50€ in retail: 7€-8€ is VAT, the same $30 or 22€ is for the publisher/developer and 20€ is to pay the delivery, storage and seller salaries.
The publisher gets the same, it's the rest what changes. Steam does not have to pay all that, servers are nowhere near as expensive as the complete retail channel, tech support is the same for both methods, companies that sell in retail still have servers too... So if Valve charged a 10% more in the EU than in US to pay some additional expenditures they could have (which they don't BTW), that would be OK, but no, they are charging 75% more, for the exact same thing.
But still, you dont understand. None of that matters at all, period. Their overheads are of no concern to you. All that matters is the current state of the market they are in. And guess what, their prices now match the current state of the market. That's all that matters.
Now, does it suck that you have to pay more? Well yeah, it does. But does that make it in any way wrong or illegal? No, not at all.
PD: If you think that the cost of running the servers costs nowhere near the same as the complete retail channels, I think you have to return to school and remember/learn better how the chain works. Sorry but that's the truth. For what the store gets out of the product, the company that delivers it gets (or needs) 1/10th, because they deliver 10x more products (i.e they deliver to 10 stores). In the same manner the wholesaler gets (or needs) 1/10th of what the deliverer, because he sells 10 times more. And finally the publisher/developer can get by with 1/10th of what the wholesaler needs. So in order to survive the publisher just needs 1/1000th of the retail price. Steam gets rid of the last 3 links of the chain and implants a server system that NEVER is close to being 1000 times more expensive than the servers that companies that sell in retail have.
Point is, what they are doing is perfectly legal and fine. Doesn't matter if you like it or not. They'll pay the price in the end if too many people don't like it. That's their prerogative.
And for the record, I worked at a major retail chain's main office. I know how it works, and I never said that Steam has to pay as much in overhead. I was just pointing out that you are underestimating their server costs.
One thing is what it's legal and another thing is what we should accept or not. We are complaining and we are in our right to do so. What I don't see the right for is to discuss our feelings about this. They could eventually decide to sell the games for $60 and I guess I wouldn't see you (all) complaining about that. I guess we are of a different paste.
PD. I think it was clear to this point that I dont have as much problem with the fact they are upping the prices, as I do with the fact that they are using excuses to do so. If you think you have the right to charge more, have the balls of admitting it and accept the consecuences.
I just think too big of a deal is being made out of this. I mean, you guys are pretty much already paying these prices for a lot of the games on the market. Why is it such a big deal that Steam is charging the same as everybody else now?
And I suppose that them glorifying costs on their end is a bit shady, but what major corporation doesn't do this? Why the hell are any games $50-60? I think all games are overpriced. I just speak with my wallet. I rarely ever buy a game on release. I always wait for the price to come down to the $35 or less range (or look for combo deals, specials, etc.)
The thing is, legally they can and have done what they did, but it is definately not fair. If it was fair, they would either charge USD for ALL customers (with additional taxes and w/e per country in USD) OR charge every country a price in the particular countries currency. Of course, they have done it the "dodgy" way. For countries where the USD dollar is weaker than local currecny, they changed it (ie Europe) and for countries where it is weaker than USD(ie, Australia), they have left it in USD. That is just wrong.
EDIT: Anyway it's funny, because it's Valve who is taking advantage of the weak dollar here, and I can guaratee you that I never was able to take advantage of the "strong" Euro. I won't tell you how much is my salary, I will just tell you that it's not 2x that of the average one here in Spain. The average yearly salary here is 20.000 euros and is higher than 50% of the countries in the EU right now with the newcomers. Some countries have less than 10.000 euros of average salary, so I wouldn't call that taking advantage of it. Just because the euro is strong, that doesn't mean that the average Joe in the EU can take advantage of that in any case. On the contrary, the euro favours companies to do the $1 = 1€ thing, so we are in a clear and UNFAIR disadvantage. Not me myself, I can't complain about MY situation, but I am sensitive to others, unlike (and this is something more and more apparent in this thread) most of our US "mates" making an apppearance here... Sad. Very sad when they are constantly taking advantage of the strong dollar in comparison to the numerous countries they exploit.
Also you have yet to admit VAT taxes are goverened by the local regions goverment/state/country. And to sell a piece of software with or without taxes are defined by local laws. So in the end you have NO IDEA what it costs Valve to deliver you a game via digital distribution in your local area. In the end all this crying is based off of European greed. Not Valves.
Americans pay the full price and what we want is to pay the full price for the Steam games, and that is $50+VAT on our countries, NOT 50 €.
What happens here is that YOU don't want to see your precious dollar being exploited in the same way that the US EXPLOITS most of the weak countries and currencies. Sorry but that's something you will have to deal with.
How on earth is it giving Europeans a discount? If they just charged everyone in USD, with the additional fees they are paying for certain contries added on in USD, it would be fair. They are making the same profits for all countries that way.
By changing the currency, they are charging a European $70USD and an american $50USD. 15% VAT tax on 50 usd is $7.50, not $20.00.
However seems like you have a loathing for the U.S. and it makes me wonder if this whole "Valve" tangent your on is about them at all. Your little comment "the US EXPLOITS most of the weak countries" sounds like your biased against anything American. Im sure your country NEVER EVER takes advantage of cheap labor. :laugh::roll:
Also I'm willing to bet America donates more money to developing countries than yours does. If anyone is "taking advantage" of cheap labor its your home town. Not ours. As Mike stated they are working on making some pricing adjustments. I wouldn't buy anything until then. Like they said
EDIT: Pff not only that, US is the country that less donates in the world, between the developed ones...
IT DOESN'T MATTER for what we are talking about anyway, but ALL your discussion has been based on that we want to take advantage of the weak dollar. I could stand that comment from pretty much any currency except the dollar and the country it belongs to. I won't deny my aversion for the recent US behavior in the world, for it's government (Bush) and the sheep legion that voted him, TWICE!! It's exactly mantaining that dominance of the dollar which made the US government decide to attack Iraq, and that's both unforgetable and unforgiveable. And I have all the reason to think this way, BUT that is not motivating my comments about Valve, even though I can admit they may be conditioning my replies to YOUR comments.
Mike's comments are just a BAD excuse made AFTER they were caught. As I said the currency BETA was established prior to them doing $1 = 1 € and worked flawlessly. VAT was not included in the price shown in the games list, but was applied later at the time of paying. Everything OK. Why the change? That's already answered.