Being an Australian Gamer Has a High Price
Australia is an expensive country to live in, there is not doubt and this sadly applies to our beloved gaming industry as well. It has been well documented that Australian consumers will pay between AUD$80-$110 for new release titles that may average around US$50- $60 in North America, yet according to industry sources, Australian publishers and retailers would face extinction if the new release titles were to drop below the average AUD$80 mark. PC gamers are also particularly affected as it was found in 2012 by an Australian consumer group that Australians are paying on average 41 percent more for computer hardware than US consumers. So why on earth do Australian gamers get the short end of the stick when it comes to prices?
So who or what is to blame?
As anyone who as ever taken an economics class will know; competition among business generally drives prices down, and Australia has not nearly as many video game retailers as the US and European market. So with the minimal competition among Australian physical video game retailers, it is safe to assume that they have a lot less pressure to keep prices low for their customers. This has improved somewhat with recent cases of large retailers such as Big W purchasing bulk amounts of video games to sell has been good for game prices in general, forcing specialized video game stores like EB games to lower their prices in order to compete.
Could regulation costs be the culprit? Many Australian gamers have experienced the woes of tough video game regulations ; we watch our international friends delve into new games while waiting painfully for the Australian government to give a rating so we can finally get our hands on them. Australian classification regimes are stricter than global standards and any game physically published in Australia must undergo a costly process that can take months. This can affect production costs, for example Telltale Games almost considered not releasing their successful Walking Dead series to Australia in fear of the fact that gaining a rating for the zombie slaying mature themed game being a highly expensive and long process. Many game publishers refuse to start the process of releasing the game in the Australian market until they have cracked into the US market, fearing that the price of classification will be a waste if the game is not successful. This often means games are released much later in Australia. Games such as State of Decay, Fallout 3 and Outlast 2 have been banned and forced to modify things such as drug use to be released in Australia. Additionally, if a game has a much higher age rating in Australia than it does in other markets (i.e MA15+ in Australia and PG in US) then the price will be increased to make up for the smaller potential customer market.
Shipping and distribution?
Many game publishers claim that Australia has much higher shipping and distributing costs to move stock around due to our small population being spread out over a large area. This being compared to places such as North America, and Europe, in which the number of people per square kilometer is higher.
According to publishers there is no “greed” on the part of developers and retailers when it comes to the higher prices, but the higher costs are required for the industry to survive in Australia. It is common for publishers in Australia to spend AUD$30-$40 dollars on producing a single copy of a game, then sell it to retailers for around AUD$50-$70. Retailers then sell to consumers at a much higher price of AUD$89-$105. Lowering the price for consumers would cause publishers and retailers to stop turning a profit.
But what about games sold online?
This reasoning for high prices within the physical video game market may seem inconsistent to the logic of digital game pricing on platforms like Steam, but many suspect that Australia’s higher digital prices are a cause of physical retailers. Game publishers have to maintain a good relationship with physical retailers, and not blow them out of the market with their much lower prices (who would buy an $80 disc when you could get it digitally for $40?).
Australia may be isolated from the world, our government is stricter on ratings, and our retail competition may be lower but does it really warrant the higher prices or do game manufacturers/ distributors simply see a big fat 20% extra profit sticker over our little island? A combination of all reasons above may be the culprit, but a large outstanding factor may simply be that Australian gamers are prepared to pay a higher price compared to their overseas counterparts.