6 ms·

I don't think that's a bad practice. I'm Russian and Steam games are (were) 1.5x-2x times cheaper for Russia compared to Europe and Americas, even before region

I don't think that's a bad practice. I'm Russian and Steam games are (were) 1.5x-2x times cheaper for Russia compared to Europe and Americas, even before regional passes. I don't know whether that was responsiblity of devs or storefront, but it seemed quite a fair and profitable practice, because the price point you are willing to pay for a game (or an app) is different for people from different economical and cultural backgrounds. You aren't getting a game for 80$ if your monthly salary is 300

deleted 4y ago
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alexandre_m 4y ago
The economics of all of that seem sketchy to me. It sounds like the main North American market is subsidizing the apps being produced and sold worldwide. Does the same logic apply for other virtual good such as digital music elsewhere?
- MonkeyMalarky 4y ago
  I think it applied to DVDs in the past and was impetus behind region locking media. Also another way to look at it is less subsidizing and more maximizing profit by not leaving money on the table in foreign countries.
- deleted 4y ago
  [deleted]
- parker_mountain 4y ago
  > the main North American market is subsidizing the apps being produced and sold worldwide I think you'll find that this has been the practice for many decades. A stark example is medicine pricing.
  - zinekeller 4y ago
    It's not really. The US medical system has this tendency to inflate pricing in a cat-and-mouse system where drug companies and insurance companies try to duke out what is the "correct" price of a drug. Setting it too high and the insurers won't cover it, too low and the pharmaceutical companies are "losing" profits to insurers. It's a terrible feedback loop that hampers those who can't afford insurance because the premiums are too high because pharmaceutical companies know that in most cases insurers will pay.
    - willnonya 4y ago
      I think youre missing several inputs into your feedback loop. The original statement about the US system bearing the brunt of development stands. It's also true that insurers influence the market. Both are true. There are also government inputs into the market, political inputs a d supply chain elements that all feed into this. The one stakeholder will little real input in the end consumer who gets stuck paying whatever the others have decided they'll allow...
      - kevin_thibedeau 4y ago
        That doesn't explain the behavior of off-patent drugs being jacked up in price on a whim or near identical variants being made to extend patent protection and maintain the predatory pricing of the name brand. Their development costs are already recouped during the initial patent phase. Tweaking things a little doesn't cost them nearly as much.
        dantheman 4y ago
        Yeah that's caused by the fda
- jonasdegendt 4y ago
  Entire reseller websites (e.g. g2a) of games and software alike have popped up trying to profit from this arbitrage opportunity. You buy games in Russia and an American scoops up the license key for a little more, it’s all automated too nowadays. On the same note, why are Levi’s jeans $100 bucks in Europe, but $40 in the USA? They’re probably coming out of the same Asian factory. Not an economist but different value propositions I guess.
  - ipaddr 4y ago
    EU and the USA doesn't have free trade in the pants category
    - jonasdegendt 4y ago
      Neither does Vietnam (one of the places Levi’s are produced nowadays) and the US, the pants are imported and duties are levied regardless of whether the pants are sold in Europe or the US. I’m sure sales tax is less in pretty much every US state compared to European countries, but it still doesn’t explain a $60 difference in price. It’s largely different price points based on different locales in accordance with what consumers are willing to shell out for the product.
- Mistletoe 4y ago
  It applies to video games and software for sure. I think this is why it is almost always cheaper to buy a code online for something like a Microsoft product.
- slg 4y ago
  It isn't really subsidizing because the goods are virtual which means the marginal costs are minimal. There of course could be infrastructure costs to get up and running in a new country. However once that is done, almost all the marginal revenue developers get out of these additional markets is profit because there is practically no cost to selling an extra copy even if it is at an extremely steep discount.
- kaba0 4y ago
  Well, the economy of that is sketchy in that multinational corporations pay sometimes an order of magnitude less for the exact same job simply due to you living in a different country.
- foota 4y ago
  It's really the opposite, it's a form of price discrimination. There's a theory of surplus in economics, which is the extra benefit that someone gets from a transaction above what they would have been willing to pay. If I buy a game that I would have paid $100 for for $50, then I have a "$50" consumer surplus. One the other end, if the producer was willing to let that game sell as low as $40, then they have a producer surplus. Profit seeking producers want to capture as much as the surplus as they can, and they do this through price discrimination. You see this in product as two things that are essentially the same but with different marketing etc., Price discrimination based on geography is quite effective though as well. People with lower incomes aren't as willing to pay high prices for games. Countries can be effectively segmented based on geography (whether virtually or not), and through this producers can charge a higher price to countries with high incomes (taking away the consumer surplus they would have had vs a lower global optimal price), and still get some value out of consumers in lower income countries. So it's not that NA is subsidizing the market, so much as it is the company trying to squeeze the most of everyone. Now, you could call it subsidizing in that there are probably products that wouldn't be brought to market without the NA market to pay for them, but that's not really "subsidizing".
  - not_a_shill 4y ago
    >Now, you could call it subsidizing in that there are probably products that wouldn't be brought to market without the NA market to pay for them, but that's not really "subsidizing". That's every product ever made for profit by a developer in a 1st world country. It's still essentially subsidizing even if you don't like the optics of the word.
    - mr_toad 4y ago
      Subsidising would imply that they’re selling in other markets for a loss. They’re not, there’s no subsidy.
    - greiskul 4y ago
      From popular internet knowledge, games are more expensive in Australia then NA (Including digital distribution). Would you say that Australia is subsidizing games for Americans?
- pvarangot 4y ago
  It could also be said that the cost of compliance and the cost coming from the litigiousness of American consumers shouldn't be subsidized by countries where selling an app is monumentally easiest and cheaper.
- teawrecks 4y ago
  Something else to consider is motivating piracy. If they sell a piece of software for a flat price in all geos, the ones who can't afford it will invest more time in pirating the software. As a side effect, piracy is normalized in those communities as a necessary way of life in the digital world. Naturally, their tools and methods will leak out to other communities and make piracy easier in places that CAN afford them. Devs would rather sell to those communities at a "loss" than ostracize them and deal with the fallout. Check out this brief description of how software proliferated in Poland during the early years of computers (3:09-8:27): https://youtu.be/ffngZOB1U2A https://youtu.be/ffngZOB1U2A
- charcircuit 4y ago
  >It sounds like the main North American market is subsidizing the apps being produced and sold worldwide. Yep. Even ad supported apps are subsidized by NA users.
lzaaz 4y ago
This is fair. OTOH, you have the single European market (the EU forces games, apps, hardware, etc to be sold at the same price everywhere in the EU in practical terms), which has shafted poor countries-it's disgraceful that a Swedish costumer pays the same price for an iPhone than a Portuguese costumer while making several times as much money every month.
- RamblingCTO 4y ago
  How can you fit that much misinformation into one comment? EU != Europe. Russia is not in the EU. Nor is it completely russian. Only a select number of countries in Europe is part of the EU. And there is no such thing as consistent, EU-enforced pricing. Get out of here ...
  - x3qt 4y ago
    Btw most of the Russia is not Europe even in geographical sense.
- decadancer 4y ago
  That's kinda messed up. ALL hardware?
  - sofixa 4y ago
    No, they're mistaken, there is no such thing.
  - argsnd 4y ago
    It’s not true. That guy doesn’t really know what he’s talking about.
- sofixa 4y ago
  > OTOH, you have the single European market (the EU forces games, apps, hardware, etc to be sold at the same price everywhere in the EU in practical terms), That's not true, where are you imagining this from? Hardware certainly doesn't cost the same, at the very least there are different VAT levels, but also pricing is adapted to the local market (literally just checked, i can get an Asus ROG Zephyrus G14 for 300€ less in Bulgaria compared to France). Software I'm unsure how to check, but Netflix costs varies by county.
klodolph 4y ago
From what I understand, the Russian market has a lot of tech-savvy users but disposable income is lower. If you didn’t price your app for the Russian market, it was more likely to get pirated or cloned. Similar caveats in certain parts of eastern Europe. At least, that was the justification I’ve heard. Different story in places like Africa, where you often make a completely different app to contend with things like data caps and slow networks (e.g. Facebook Lite).

deleted 4y ago

[deleted]

alexandre_m 4y ago

The economics of all of that seem sketchy to me. It sounds like the main North American market is subsidizing the apps being produced and sold worldwide. Does the same logic apply for other virtual good such as digital music elsewhere?

MonkeyMalarky 4y ago
I think it applied to DVDs in the past and was impetus behind region locking media. Also another way to look at it is less subsidizing and more maximizing profit by not leaving money on the table in foreign countries.
deleted 4y ago
[deleted]
parker_mountain 4y ago
> the main North American market is subsidizing the apps being produced and sold worldwide I think you'll find that this has been the practice for many decades. A stark example is medicine pricing.
- zinekeller 4y ago
  It's not really. The US medical system has this tendency to inflate pricing in a cat-and-mouse system where drug companies and insurance companies try to duke out what is the "correct" price of a drug. Setting it too high and the insurers won't cover it, too low and the pharmaceutical companies are "losing" profits to insurers. It's a terrible feedback loop that hampers those who can't afford insurance because the premiums are too high because pharmaceutical companies know that in most cases insurers will pay.
  - willnonya 4y ago
    I think youre missing several inputs into your feedback loop. The original statement about the US system bearing the brunt of development stands. It's also true that insurers influence the market. Both are true. There are also government inputs into the market, political inputs a d supply chain elements that all feed into this. The one stakeholder will little real input in the end consumer who gets stuck paying whatever the others have decided they'll allow...
    - kevin_thibedeau 4y ago
      That doesn't explain the behavior of off-patent drugs being jacked up in price on a whim or near identical variants being made to extend patent protection and maintain the predatory pricing of the name brand. Their development costs are already recouped during the initial patent phase. Tweaking things a little doesn't cost them nearly as much.
      - dantheman 4y ago
        Yeah that's caused by the fda
jonasdegendt 4y ago
Entire reseller websites (e.g. g2a) of games and software alike have popped up trying to profit from this arbitrage opportunity. You buy games in Russia and an American scoops up the license key for a little more, it’s all automated too nowadays. On the same note, why are Levi’s jeans $100 bucks in Europe, but $40 in the USA? They’re probably coming out of the same Asian factory. Not an economist but different value propositions I guess.
- ipaddr 4y ago
  EU and the USA doesn't have free trade in the pants category
  - jonasdegendt 4y ago
    Neither does Vietnam (one of the places Levi’s are produced nowadays) and the US, the pants are imported and duties are levied regardless of whether the pants are sold in Europe or the US. I’m sure sales tax is less in pretty much every US state compared to European countries, but it still doesn’t explain a $60 difference in price. It’s largely different price points based on different locales in accordance with what consumers are willing to shell out for the product.
Mistletoe 4y ago
It applies to video games and software for sure. I think this is why it is almost always cheaper to buy a code online for something like a Microsoft product.
slg 4y ago
It isn't really subsidizing because the goods are virtual which means the marginal costs are minimal. There of course could be infrastructure costs to get up and running in a new country. However once that is done, almost all the marginal revenue developers get out of these additional markets is profit because there is practically no cost to selling an extra copy even if it is at an extremely steep discount.
kaba0 4y ago
Well, the economy of that is sketchy in that multinational corporations pay sometimes an order of magnitude less for the exact same job simply due to you living in a different country.
foota 4y ago
It's really the opposite, it's a form of price discrimination. There's a theory of surplus in economics, which is the extra benefit that someone gets from a transaction above what they would have been willing to pay. If I buy a game that I would have paid $100 for for $50, then I have a "$50" consumer surplus. One the other end, if the producer was willing to let that game sell as low as $40, then they have a producer surplus. Profit seeking producers want to capture as much as the surplus as they can, and they do this through price discrimination. You see this in product as two things that are essentially the same but with different marketing etc., Price discrimination based on geography is quite effective though as well. People with lower incomes aren't as willing to pay high prices for games. Countries can be effectively segmented based on geography (whether virtually or not), and through this producers can charge a higher price to countries with high incomes (taking away the consumer surplus they would have had vs a lower global optimal price), and still get some value out of consumers in lower income countries. So it's not that NA is subsidizing the market, so much as it is the company trying to squeeze the most of everyone. Now, you could call it subsidizing in that there are probably products that wouldn't be brought to market without the NA market to pay for them, but that's not really "subsidizing".
- not_a_shill 4y ago
  >Now, you could call it subsidizing in that there are probably products that wouldn't be brought to market without the NA market to pay for them, but that's not really "subsidizing". That's every product ever made for profit by a developer in a 1st world country. It's still essentially subsidizing even if you don't like the optics of the word.
  - mr_toad 4y ago
    Subsidising would imply that they’re selling in other markets for a loss. They’re not, there’s no subsidy.
  - greiskul 4y ago
    From popular internet knowledge, games are more expensive in Australia then NA (Including digital distribution). Would you say that Australia is subsidizing games for Americans?
pvarangot 4y ago
It could also be said that the cost of compliance and the cost coming from the litigiousness of American consumers shouldn't be subsidized by countries where selling an app is monumentally easiest and cheaper.
teawrecks 4y ago
Something else to consider is motivating piracy. If they sell a piece of software for a flat price in all geos, the ones who can't afford it will invest more time in pirating the software. As a side effect, piracy is normalized in those communities as a necessary way of life in the digital world. Naturally, their tools and methods will leak out to other communities and make piracy easier in places that CAN afford them. Devs would rather sell to those communities at a "loss" than ostracize them and deal with the fallout. Check out this brief description of how software proliferated in Poland during the early years of computers (3:09-8:27): https://youtu.be/ffngZOB1U2A https://youtu.be/ffngZOB1U2A
charcircuit 4y ago
>It sounds like the main North American market is subsidizing the apps being produced and sold worldwide. Yep. Even ad supported apps are subsidized by NA users.

lzaaz 4y ago

This is fair. OTOH, you have the single European market (the EU forces games, apps, hardware, etc to be sold at the same price everywhere in the EU in practical terms), which has shafted poor countries-it's disgraceful that a Swedish costumer pays the same price for an iPhone than a Portuguese costumer while making several times as much money every month.

RamblingCTO 4y ago
How can you fit that much misinformation into one comment? EU != Europe. Russia is not in the EU. Nor is it completely russian. Only a select number of countries in Europe is part of the EU. And there is no such thing as consistent, EU-enforced pricing. Get out of here ...
- x3qt 4y ago
  Btw most of the Russia is not Europe even in geographical sense.
decadancer 4y ago
That's kinda messed up. ALL hardware?
- sofixa 4y ago
  No, they're mistaken, there is no such thing.
- argsnd 4y ago
  It’s not true. That guy doesn’t really know what he’s talking about.
sofixa 4y ago
> OTOH, you have the single European market (the EU forces games, apps, hardware, etc to be sold at the same price everywhere in the EU in practical terms), That's not true, where are you imagining this from? Hardware certainly doesn't cost the same, at the very least there are different VAT levels, but also pricing is adapted to the local market (literally just checked, i can get an Asus ROG Zephyrus G14 for 300€ less in Bulgaria compared to France). Software I'm unsure how to check, but Netflix costs varies by county.

klodolph 4y ago

From what I understand, the Russian market has a lot of tech-savvy users but disposable income is lower. If you didn’t price your app for the Russian market, it was more likely to get pirated or cloned. Similar caveats in certain parts of eastern Europe. At least, that was the justification I’ve heard. Different story in places like Africa, where you often make a completely different app to contend with things like data caps and slow networks (e.g. Facebook Lite).