Why Doust Thou Charge So Much, Steam?

I’m not usually one to complain about the prices of games since I’m usually one of the chumps who’s buying the collector’s edition, usually at a rather hefty premium. I don’t mind paying extra though as that’s just how I roll and those extra geeky goodies are part of the experience of getting a new game. Still sometimes games forego a collector’s edition (like nearly every indie title) so I’ll usually just grab the game from Steam since I can get the download for free thanks to Internode hosting a steam content server. However there’s been a rather worrying trend for games on Steam to be priced way above what they are elsewhere, enough to stop me in my tracks when purchasing some games.

Long time readers will remember that in my Call of Duty: Black Ops review I stated openly that I simply refused to play many Call of Duty games on release day because the price was just bonkers. It’s made even worse by said games being released at sane prices only to be changed shortly afterwards leaving customers who didn’t get in early faced with coughing up the cash or going without. For me I went without for a long time only grabbing a copy once it was below my pain threshold for Steam games. Recently however a friend of mine showed me something that’s changed the way I look at games on Steam, but it still leaves the question of price discrepancy unanswered.

The service I’m referring to is a website called G2Play an online store that mostly sells CD/Steam keys and digital only downloads. I had known about sites like this in the past (Play Asia being another friend favourite) but my trust in them was low since I’d never used them before. However the prices there are simply astonishing with most games being available at very heavy discounts. Figuring that all I had to lose was $37 and possibly a couple hours of my time I ordered a copy of Warhammer 40000: Space Marine. Alarm bells went off when they asked for a copy of my photo ID but I decided that since my friend had used them successfully they couldn’t be all bad and plus it’s nigh on impossible to do much with a bad cell phone picture of my ID. Less than an hour later I had a code and, surprise surprise, it worked like a charm.

I’ve since bought a few more games, each one working flawlessly.

It seems then that the price discrepancy isn’t some hard and fast rule that Steam is keen on enforcing, otherwise they would just deny any codes purchased in this fashion. Even stranger is the fact that these prices are below what’s available in the Steam store in their respective regions, signalling that there’s another avenue to legitimately purchasing games at below the retail price. Whilst this is true for almost any product (usually direct from the supplier/manufacturer) wholly digital products really don’t have those kinds of relationships since the marginal cost is practically 0 for each new unit. Price discrepancies above a small percentage (to account for currency conversions and import taxes) for such products in the global market are then seem to be nothing more than price gouging.

In doing some research for this post I tried to find some official word on why there were such wide price gaps between countries on Steam when ostensibly we’re all being sold the same product. To cut a long story short there isn’t anything official, at least where Steam is concerned. Kotaku Australia writer Mark Serrels did some solid research into why games were so expensive in Australia but failed to come up with a single reason, citing multiple different pressures that could be responsible for the discrepancy. Some of them apply to wholly digital items but the last quip of the Internet bringing down prices doesn’t seem to have eventuated, in fact it’s been quite the opposite. Prices, especially on big titles, have remained quite steady especially for retail box releases.

It really baffles me because Steam was the pioneer of pricing games to sell like hot cakes and that helped catapult them to being the top digital distribution platform. It’s true that us Australians have put up with higher game prices for as long as games have been for sale but the traditional barriers to distributing your games really don’t exist any more, especially for digital downloads. Perhaps as more become aware of services like G2Play Steam pricing will become more sane, but I’m not holding my breath.

5 Comments

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  1. Nice post, though I disagree about your last line. Competition should drive down steam’s prices. Indeed they tend to price most games $10-15 cheaper than the retail store alternatives here, suggesting a clear response (and i’ve heard it’s similar in the US).

    As that competition increasingly appears online, (not just from similar third party sellers, but also directly from publishers) then Steam will have to drop its prices. Then again, maybe they won’t and 5 years from now we will all end up on another platform.

    Either way, the end to the Antipodies tax is rapidly coming to an end thanks to the internet.

  2. Good point, although I’ve found the competing platforms (Impulse, Origin) to be somewhat lacking in both price competitiveness and selection of titles. As for competition with retail most AAA titles are usually the same price (Space Marine is $89.95 on Steam, $88 at EB Games) but lesser titles are usually cheaper.

    The main problem there however is platform lock-in. Pretty much all my games are on Steam and with no way to transfer them to another the cost of transferring platforms can be quite high. Sure you can run both clients but history has shown that users don’t like doing that, unless there’s some form of integration between them (which there isn’t, currently).

    Antipodies tax? Not sure I understand you there…

  3. Yeah, it’s a tough one. I love the idea of just one platform for getting my games, but it does reduce competition. I’m not sure if steam could be opened up for multiple sellers.

    While it is easily do-able, but how would they compete other than on pure price alone. – It’s a problem digital markets are dealing with. Everyone wants a one-stop shop for their apps and programs, but giving steam and itunes monopoly control. Would be interested to hear your thoughts on how to get around it (without having 50+ competing programs to sell). We need an online mall of some sort.

    Antipdies tax is just my name for the mark-up that Australia has long faced for products compared to the US/UK. Companies do it because they can get away with it. The internet is radically changing that, as we can now much more easily compare prices and shop around.

  4. The reason prices are so cheap in G2PPlay is because theya re Russian CD keys. You have to understand that most russian just get pirated copies. In order to make any money the retailers and etailers of Russia have extremely low prices.

  5. Some of them are Russian but a good percentage of them are US or international keys as well. Dead Island for instance had 2 versions available with one of them being Russian (and staggeringly cheaper, for the reasons you mentioned) and the other US/International (still cheaper than the Australian store).

    You’re bang on about why the prices are so cheap in certain regions. Microsoft has been heavily discounting its Windows products in places like China in order to drive adoption of legitimate copies rather than pirated ones.

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