PHJF wrote on Jul 7, 2020, 07:56:
NKD wrote on Jul 6, 2020, 22:27:
Regional prices are designed to make games affordable for poorer economies where a full price game would not see many sales, and where they have to compete with bootleg copies being sold openly. People in wealthy countries using a VPN to get a cheaper price from poor countries is just another way for wealthy people to ruin a good thing for poor people to benefit themselves. If you're okay with that, fine, but at least recognize it.
Piracy is arguably the lesser of two evils. Sure, it's one less full price domestic sale either way, but at least you're not shitting on some other gamer on the other side of the world just to save a buck.
... or regional pricing is designed to maximize the amount of money a company can wring out of each individual market. Do you live under a rock? Do you honestly think this is generosity on the part of publishers?
Can't it be both?
We know the cost of developing a video game. Hundreds of millions of dollars. We see the thousands of names in the credits these days.
And that's one game. Most of these developers, and absolutely publishers, have multiple games being developed at the same time. Some flop. Flop hard. They may be beloved here, but they flop. In order for that developer to stick around, the games that don't flop need to cover the ones that do.
So there's really a set amount of money they have to earn, and they have to make it from their primary regions.
In other regions, people cannot afford those prices. The average monthly income in the Ukraine is under $400. That's less than 10% of the same in the US.
In order to price the game in a way that they actually make money to keep selling games, studios need to make a certain amount of money in wealthy countries (incidentally, this is also where most of their employees are, and therefore the wages they're paying.) But places like the Ukraine can't afford that. This brings a conundrum with 3 solutions:
1) Sell the game at the western price point. This tack will bring the studio the most revenue. But in countries with more poverty, few people will be able to afford the game, despite demand not falling for the game, so more people will pirate. This will normalize piracy in that region, even as it develops, and it will increase piracy across the globe because the game is more widely available through piracy channels
2) Sell the game at the other price point. This will drastically reduce revenue. Now, people in the Ukraine that want the game can afford it, but the game is so cheap in Western countries that the studio and publisher can't recoup the costs
3) Have a pricing scale based upon what the region can afford. This is the best of all worlds. Prices are adjusted to cost of living, and therefore the western markets are still helping the product be profitable, but the poorer nations can still legally acquire the game
Everything generally adjusts in this way, particularly when the per-unit cost is low. But even things such as cereal, gallons of milk, and loaves of bread are 33%-75% cheaper in Kiev than in Cincinnati.