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EC sends Statements of Objections to Valve and five publishers on “geo-blocking”
- londons_explore 8y agoGood good. Time for geoblocking to go away
- Mirioron 8y agoBut now think about the consequences of this: everybody in the EU has to pay the same price for the games. There's an income difference of 5-10 times between different EU countries. The poorest ones will have to now pay the same price as the richest ones. A game costing >€60 when you have less than €300 disposable income per month is crazy expensive.
- nitrogen 8y agoMaybe publishers can issue coupons that only work in a specific currency for non-euro countries?
- deleted 8y ago[deleted]
- thefounder 8y agoThat would be geoblocking.
- michaelmrose 8y agoSuch coupons could in theory be usable anywhere even they could just be single use codes and only mailed to addresses in a given country. Also blocking would be not allowing someone to buy from your store or not use their purchase in a portable fashion not giving different users a different individualized price break. Example many retailers send out individualized coupons to customers already, presumably some customers who appear more likely to respond to such coupons by spending more are more likely to be given coupons.
- gruez 8y agoSure but residents in the poorer country can still exploit this by purchasing games on behalf of residents in the richer country, for a fee. Not everyone games so it's not like they're losing out on anything.
- pergadad 8y agoAs of today geoblocking doesn't seem to be used for pricing, but mainly to allow locally exclusive sales channels.
- concerned_user 8y agoMaybe not in EU but is used for CIS countries and other regions, and it is not just currency conversion. I heard people buy those cheaper games and activate using VPN which will be dealt with sooner or later I suppose. If you really really stretch it, can go as far as tax evasion I suppose as you virtually "import" a good into EU and don't pay VAT which you are supposed to pay here but no in other regions.
- izacus 8y agoBuying in the cheaper store is the desired rational behaviour of a customer in free market capitalism. Why do you want to block that? Who does it benefit?
- michaelmrose 8y agoBecause if most people do it they wont offer it for the lower price anymore they will just sent one profit maximizing price. If its something few people do then those few can profit maximally from being savvy by paying poor nation prices on games while enjoying the benefits of being citizens of rich nation.
- concerned_user 8y agoWell you can't just "not do it anymore" in those countries, might as well close shop there. Imagine prices of games would increase 3 times, i.e. one 60$ AAA game would cost 180$. It would be the equivalent raising prices to us/eu level in those countries. There will be a fraction of people able to buy it and you will get gray/black market with dvds or flash drives where you would get a bootleg copy or just piracy.
- antpls 8y agoWell, maybe this will lead to prices based on cost of development rather than "provided utility". If they are able to sell to a lower price to a given country, why would they not sell at that price to everyone else ?
- BoorishBears 8y agoIf this is how we forced everyone to price everything, how many people on Hacker News would suddenly be making minimum wage? Tech is literally the land of provided utility, it doesn’t cost much of anything to shift some bits around.
- noidea_ 8y agoIt's unlikely that tiny, relatively unimportant video game markets are going to change the tenants of capitalism. > If they are able to sell to a lower price to a given country, why would they not sell at that price to everyone else ? Because they'd make less money
- makomk 8y agoRemember that the marginal cost of one more digital copy of a game is really low; most of the cost is in the fixed development costs, which means that what matters is their total sales income. So the whole reason they can sell at a lower price to some countries is precisely because they're selling at a higher price elsewhere and making back their development costs that way. If they can't do that, they're almost certainly going to have to sell at the higher price everywhere.
- michaelmrose 8y agoSay you have 5 workers making 10 units of value each year. The cost of a product is 1 unit of value but you spent 100 units getting set up to sell said product, designing it and so forth. In theory if you want default on all your bills and go live in the woods you can afford to always sell your product at 1 or 2 units until you go out of business but in reality you are out 150 units before you start. So in insert rich market you sell 30 units at 5 units each in not so rich market you sell 20 units at 4 units each in poor market you sell 20 units at 2 units each. You come out with 200 units or 50 units profit! So if you can sell for 2 units in the cheapest market why can't you sell it to everyone at that price? Because it wouldn't pay for the sunk cost of developing the product in the first place. Nothing is priced based on the cost to create its just the lowest possible floor for the price in the absence of other costs. Software has a floor so close to zero it might as well be zero but a high cost to create the initial copy.
- googlethrow 8y agoIsn't this against the spirit of globalization and free/open markets? Or is that just meant for companies to benefit from cheap labor but not for consumers to be able to shop around? (These are general questions, I don't necessarily mean that you are pro-globalization.)
- chris_wot 8y agoRubbish. You can sell it for different prices, you just can't block someone from buying it based on where they live.
- fxbl0i 8y agoThat makes it impractical and useless to sell for different prices; if a digital good costs 50€ in Germany and 20€ in Italy, both Germans and Italians will buy it in Italy. Companies are therefore forced to sell it for 50€ to everybody. That hurts Italian customers.
- chris_wot 8y agoSure, if the digital services have a monopoly then this will occur. The thing, then, is to ensure you cannot setup monopolies like this.
- nabla9 8y agoThe right price is optimization problem that depends on income distribution in the whole region (same price for the whole region increases purchasing power for low income population in high income countries as well). example: If there are five potential customers and the maximum sums they are willing to pay are: 60€, 50€, 30€, 30€, 25€, what is the single price that maximizes revenue and profit for games? price revenue 60€ 60€ 50€ 100€ 30€ 120€ 25€ 125€ <-
- michaelmrose 8y agoFor practical purposes You capture the most at launch and progressively discount over time capturing the most revenue by forcing those who want the game closer to launch to pay more. In theory you lose some buyers who prefer to have a competitors product right now but 60 50 30 30 is still better than 25 x 5.
- izacus 8y agoWhy would everyone have to pay the same price for games? Where does this logic come from? Just because you can buy a car in Iowa and drive it to California, it doesn't mean people in Iowa have pay the exact same price for it than in Cali. Same goes here - EU doesn't force you to price thing the same across all countries. But you are just not allowed to ban people from buying a thing in one EU country and take it to another - this is the CORE tenement of EU's single market and without this limitation, the EU single market cannot exist. Banning customers from being able to shop around for lower price of a good they want is also an egregious voilation of core benefit of free market capitalism.
- michaelmrose 8y agoImagine that based on local income a digital product that has virtually no marginal cost is $25 in one market and $50 in another for whatever currency you please. If someone in market B can by clicking over to a different storefront for market A then logically the vendor will no longer offer the good at the lessor rate in market A. They will have to figure out what price maximizes revenue in both and it will surely disadvantage buyers in market A because the vendor gains as much for one market B buyer as two market A buyers. If 40% of your buyers are from poor land then losing every one of them is as costly as dropping richland users prices by 1/3. What if the vendor offered coupons available only locally to make it more feasible to differentiate prices while keeping stuff portable?
- rcxdude 8y agoBecause this isn't what happens. Price discrimination, if done perfectly, minimises the value the consumer can get and maximises the value the seller can extract from them. Overall it is a negative for consumers.
- londons_explore 8y agoVendors of digital goods could use other ways to price it. For example, the product costs $50, but show us your tax returns and we'll discount to $25. 'Student discount' is the same sort of thing, and common across Europe.
- 8y ago
- sammorrowdrums 8y agoWe see these consequences all the time. Many items sold in sold in Bay Area are also sold for same price in Detroit for example. I'm not sure that trying to fudge it by restricting sales is the best way to fix.
- i4blux 8y agoIt's absolutely retarded how the EU pretends the average salary in all countries is the same. This "unique market" thing is, as always, used to screw the poor countries of the EU. But I suppose that as long as it works fine for Germany and France, who cares about the rest, right?
- webreac 8y agoNot at all. Many factories are build in the poorest countries because of the cheap labor and quickly, they become less poor. This has prove to work well and the differences are reducing. Maybe not fast enough.
- deleted 8y ago[deleted]
- fxbl0i 8y agoSo what you're saying is that the single market is also used to siphon jobs out of all but the poorest countries so companies can get away with paying peanuts. And that's supposed to be good?
- Tsubasachan 8y agoConsider this: a salary of €500 in Romania would net you the same purchasing power as someone who earns €1500 in Denmark. How would that work in a capitalist economy?
- webreac 8y agoI was in complete disbelief of your 5-10 ratio, but according to https://www.reinisfischer.com/average-salary-european-union-2018 https://www.reinisfischer.com/average-salary-european-union-..., you are right: €3,270 in Denmark vs €457 in Bulgaria. It is a ratio of 7.
- simion314 8y agoI don't think Steam ever had lower prices for some EU countries, I am from Romania and the prices on Steam were always high. I could not find any source to confirm this but I think that all EU countries have same prices and it is not a recent thing.
- Mirioron 8y agoIt's actually worse than that if you look at median equivalised net income: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_di04&lang=en http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_... Remember that Norway and Switzerland are part of the EEA, so geoblocking affects them too. Although I am somewhat skeptical of those lower numbers, but the difference is there.
- NullPrefix 8y ago> €300 disposable income per month Hear hear, mister big shot.
- Tsubasachan 8y agoLife isn't fair and neither is capitalism. Living in a poor country has consequences.
- thefounder 8y agoNext they should target the media companies. These are the most annoying
- dx87 8y agoSomeone posted Valve's response to this on /r/steam. Basically, they don't agree with it, but stopped doing it years ago since they knew the EU was going to give them problems with it. They also said that it only applied to physical copies of games that included a code to redeem on steam, so they weren't making any money off of this, and it was only done at the request of some publishers.
- _Codemonkeyism 8y agoX made me do it.
- l0b0 8y ago"The information you are looking for has moved. You should find some or all of it at http://europa.eu/european-union/index_en." http://europa.eu/european-union/index_en." Looks like it's been taken down, because https://europa.eu/search/?queryText=geo-blocking&query_source=EUNION&filterSource=EUNION&more_options_date=*&more_options_date_from=&more_options_date_to=&more_options_language=en&more_options_f_formats=*&swlang=en https://europa.eu/search/?queryText=geo-blocking&query_sourc... doesn't return any results.
- thg 8y agoNo problems here.. In any case, here's a mirror: http://archive.is/EJrls http://archive.is/EJrls
- Proven 8y agoMorons. > In a true Digital Single Market, European consumers should have the right to buy and play video games of their choice regardless of where they live in the EU. They still have the right. The seller ought to have the right to not sell it to them if they so choose. Worst case for Valve is to set one price - which would be close to their current price in their largest EU market - and simply price out most East Europeans. The morons from Brussels know what's best, trust them!