Valve, Capcom, Bethesda, Fined $9.4 Million by EU for 'Geo-Blocking

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Ya this doesn't end the way the EU would think... or consumers would expect.

All prices will be unified to the highest price paid in the EU. The poor countries will be come pirates and Valve and the big AAAs really don't care, it will be cheaper then having all EU customers pay the Polish price.
 
Doesn't seem like a good decision. Prices should be tailored for the market, otherwise the publishers will just raise the price everywhere, screwing everyone.
 
I would agree with the EU's standpoint on certain products, such as medicines. Those can be a lifesaving commodity, that companies can price higher in some places. Kind of the reverse for what these software distributers are doing.

Lifesaving commodity will come from someone's primary budget or insurance.

Consumable entertainment is something wholly different. This will come from the leftover funds after someone has paid for everything they must first spend money on for survival. So rent, clothes, food, transportation, education, healthcare. These come first. After that is paid for, what is left can be very different from one country to the next. I think these software companies should be able to price things lower in what might be called a "poorer" country. This 1) at least results in a sale for something that is digital and easily copied/distributed. Lower price can still mean a profit for this type of goods. and 2) improves quality of life and the standard of living for people in those "poorer" countries.

EU, you got it wrong on this one.
 
GoodBoy said:
I would agree with the EU's standpoint on certain products, such as medicines. Those can be a lifesaving commodity, that companies can price higher in some places. Kind of the reverse for what these software distributers are doing.

Lifesaving commodity will come from someone's primary budget or insurance.

Consumable entertainment is something wholly different. This will come from the leftover funds after someone has paid for everything they must first spend money on for survival. So rent, clothes, food, transportation, education, healthcare. These come first. After that is paid for, what is left can be very different from one country to the next. I think these software companies should be able to price things lower in what might be called a "poorer" country. This 1) at least results in a sale for something that is digital and easily copied/distributed. Lower price can still mean a profit for this type of goods. and 2) improves quality of life and the standard of living for people in those "poorer" countries.

EU, you got it wrong on this one.
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I don't agree with this since it sounds like an excuse to charge more. In this digital age where you can sell your product in the country where you're not living in, then I think you have less reason to charge more for said product. Things like rent, food, transportation, education, and etc... sure. But digital goods are digital and don't need transportation or anyone working in said country to distribute it. Make all prices equal or don't sell your goods at all.
 
GoodBoy said:
I would agree with the EU's standpoint on certain products, such as medicines. Those can be a lifesaving commodity, that companies can price higher in some places. Kind of the reverse for what these software distributers are doing.

Lifesaving commodity will come from someone's primary budget or insurance.

Consumable entertainment is something wholly different. This will come from the leftover funds after someone has paid for everything they must first spend money on for survival. So rent, clothes, food, transportation, education, healthcare. These come first. After that is paid for, what is left can be very different from one country to the next. I think these software companies should be able to price things lower in what might be called a "poorer" country. This 1) at least results in a sale for something that is digital and easily copied/distributed. Lower price can still mean a profit for this type of goods. and 2) improves quality of life and the standard of living for people in those "poorer" countries.

EU, you got it wrong on this one.
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It still doesn't work for medicine. They would just increase the price for everyone just the same. I am sure in the EU geo pricing doesn't even exist when it comes to healthcare. That is it own thing full of regulations.
 
DukenukemX said:
I don't agree with this since it sounds like an excuse to charge more. In this digital age where you can sell your product in the country where you're not living in, then I think you have less reason to charge more for said product. Things like rent, food, transportation, education, and etc... sure. But digital goods are digital and don't need transportation or anyone working in said country to distribute it. Make all prices equal or don't sell your goods at all.
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That's not how it works in reality though.

Say you have 50 customers that can pay $50 and 50 customers that can only pay $5.
#1 If you sell at $5 you'll make $500.
#2 If you sell at $50 you'll make $2500.
#3 If you sold at varying prices you would make $2750.

It's obviously more complicated than that, but simplified down that is what it comes out to, the poor people will just get screwed.
The only possible benefit is for the richest people. With the same example say you have 10 people that can pay $100. That's only $1000 total so it would still make sense to set it to $50.
 
I can see what the EU is thinking, I can see them getting flack for things being cheaper in Greece than in France and stuff like that, so the easy solution is to take a weighted average and change prices accordingly. Then the BDE move would be to then double down on tracking sales and piracy so they can then go back to the EU that sued them and take legal action back with concrete numbers saying this is what you cost us in sales and revenue and dump the issue back on them.
Because I get that pirates are gonna pirate, there are some people out there that you are never going to convince to pay for your product, but most of us just want to buy it at a reasonable price, and not have to jump through a dozen hoops to do so.
 
I had a friend who used a VPN to buy games at the lower prices offered in some countries, but I guess steam got wise on this a while ago and changed it so that the credit card address had to match the region you buy from. That's what I'm told anyway. Sort of related to discussion.
 
Lakados said:
I can see what the EU is thinking, I can see them getting flack for things being cheaper in Greece than in France and stuff like that, so the easy solution is to take a weighted average and change prices accordingly. Then the BDE move would be to then double down on tracking sales and piracy so they can then go back to the EU that sued them and take legal action back with concrete numbers saying this is what you cost us in sales and revenue and dump the issue back on them.
Because I get that pirates are gonna pirate, there are some people out there that you are never going to convince to pay for your product, but most of us just want to buy it at a reasonable price, and not have to jump through a dozen hoops to do so.
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Good ol' central planning. Doesn't work out very well in the real world. The EU needs to quit micro-managing everything they can. Poor hardest hit will be the result.
 
DukenukemX said:
I don't agree with this since it sounds like an excuse to charge more. In this digital age where you can sell your product in the country where you're not living in, then I think you have less reason to charge more for said product. Things like rent, food, transportation, education, and etc... sure. But digital goods are digital and don't need transportation or anyone working in said country to distribute it. Make all prices equal or don't sell your goods at all.
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Making the price equal everywhere won't work, and I will explain why.
Lets say we just released a new AAA game, and we as the developers want to set the MSRP to €50 for this game.

In areas that are more financially stable and capable, we will sell the game for €50.
Now, in areas that are far less financially stable and/or impoverished, selling the game for €50 won't be feasible for profits or anyone's enjoyment since few in those areas would be able to afford it, so we as the developers then personally decide to sell the game in that area for €10.

Keeping things simple, lets say in those impoverished areas that at €10, nearly every gamer in that area will now be able to afford the game; as an example, lets say 900 out of 1000 people can now afford the game at $10.
900 x €10 is €9000 total profit (lets assume there is no overhead or fees or taxes to keep things simple for this).

Thus, a majority of those impoverished individuals can now afford to play this new AAA game because of the price that we as the developers personally set, thus allowing a profit of €9000, and allowing 900 out of 1000 individuals to affordably enjoy the game - this makes it a win-win situation.
This is the definition of Capitalism.



However, what is happening now is that the EU is stating that the game must be sold equally everywhere, thus forcing we as the game developers to sell it at €50 everywhere, regardless of the market and regardless of how we feel about the financial situation.
Ok, that's fine and all, except now the game is being forced going to be sold at $50 in all regions, regardless of whether or not they are financially stable and/or impoverished.

Let's go back to our original example now.
The game is still being sold at €50 in the financially stable and capable areas - that's fine, no change.

Now, in the areas that are financially less stable and/or impoverished, being forced to sell the game at €50 will mean only 20 out of 1000 people will be able to afford the game.
20 x €50 = €1000 total profit (again, assuming no overhead or fees or taxes to keep things simple for this)

Thus, only 20 individuals can now afford play this game thus excluding a majority of those in the area who can not afford to take such a financial hit at such a steep price, and this only allows a profit of €1000 instead because of the EU forcing us as the developers to sell at this 'equal' price, instead of us as the developers being allowed to sell it at a price of our choosing to make a profit of €9000 like before - this makes it a lose-lose situation.
This is the definition of Socialism.



Do you see now why Capitalism works, and why Socialism does not?
 
Red Falcon said:
Making the price equal everywhere won't work, and I will explain why.
Lets say we just released a new AAA game, and we as the developers want to set the MSRP to €50 for this game.

In areas that are more financially stable and capable, we will sell the game for €50.
Now, in areas that are far less financially stable and/or impoverished, selling the game for €50 won't be feasible for profits or anyone's enjoyment since few in those areas would be able to afford it, so we as the developers then personally decide to sell the game in that area for €10.

Keeping things simple, lets say in those impoverished areas that at €10, nearly every gamer in that area will now be able to afford the game; as an example, lets say 900 out of 1000 people can now afford the game at $10.
900 x €10 is €9000 total profit (lets assume there is no overhead or fees or taxes to keep things simple for this).

Thus, a majority of those impoverished individuals can now afford to play this new AAA game, thus allowing a profit of €9000, and allowing 900 out of 1000 individuals to affordably enjoy the game - this makes it a win-win situation.
This is the definition of Capitalism.



However, what is happening now is that the EU is stating that the game must be sold equally everywhere, thus forcing the game developers to sell it at €50 everywhere, regardless of the market.
Ok, that's fine and all, except now the game is being forced going to be sold at $50 in all regions, regardless of whether or not they are financially stable and/or impoverished.

Let's go back to our original example now.
The game is still being sold at €50 in the financially stable and capable areas - that's fine, no change.

Now, in the areas that are financially less stable and/or impoverished, being forced to sell the game at €50 will mean only 20 out of 1000 people will be able to afford the game.
20 x €50 = €1000 total profit (again, assuming no overhead or fees or taxes to keep things simple for this)

Thus, only 20 individuals can now afford play this game thus excluding a majority of those in the area who can not afford to take such a financial hit at such a steep price, and this only allows a profit of €1000 instead because of the EU forcing the developers to sell at this 'equal' price, instead of the developers being allowed to sell it at a price of their choosing to make a profit of €9000 like before - this makes it a lose-lose situation.
This is the definition of Socialism.



Do you see now why Capitalism works, and why Socialism does not?
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That's not even Socialism, Socialism would be making it comparatively similar in pricing in all locations. Take the most economically stable region and choose 50 as the price, what percentage of an average monthly income is that, then adjust it down from there so that it is always the same percentage of a monthly income in all regions. This is the EU straight up being bad at economics.
 
Lakados said:
That's not even Socialism, Socialism would be making it comparatively similar in pricing in all locations. Take the most economically stable region and choose 50 as the price, what percentage of an average monthly income is that, then adjust it down from there so that it is always the same percentage of a monthly income in all regions. This is the EU straight up being bad at economics.
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Then setting the price down to €10 (using my example) for all regions would still be a lose-lose scenario.
Doing so would allow the game to be affordable in the impoverished areas, but being forced to do so as well in the financially capable areas would be cutting the profits of the developers, which would financially damage them to the point where they might either go bankrupt or close their doors outright, thus no longer allowing for any further AAA games from them, or potentially any games from them.

So under Socialism, forcing the developers to set the price 'equally high' screws over those individuals in impoverished areas, and forcing the developers to set the price 'equally low' screws over the developers themselves, thus stifling innovation and competition.
A government forcing a private entity to set a price, high or low, without choice is the definition of Socialism.
 
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Lakados said:
This is stupid, just about everything is “geo priced”. $60 for a new title is about the standard, $60USD in the US is a hell of a lot different that say $60USD in India.
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Exactly. Things are cheaper in the Czech Republic because people in general have less income. Likewise for Mexico, Russia, ect.

I suppose Valve should make an "EU" price and up it across the board.
 
Red Falcon said:
So under Socialism, forcing the developers to set the price 'equally high' screws over those individuals in impoverished areas, and forcing the developers to set the price low screws over the developers themselves, thus stagnating innovation and competition.
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Socialism could force the price to different by market, that not inherent to it at all, the example you quote would be as much socialism and would not force equal price.

Socialism:
any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

A common digital market is a step toward but still far from it.
 
LukeTbk said:
Socialism could force the price to different by market, that not inherent to it at all, the example you quote would be as much socialism and would not force equal price.
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I think you might be missing the point.
The EU doing this to these game developers and companies is going to be a lose-lose situation.

When the developers themselves are making the price choices by regional financial status, that is Capitalism.
When the developers are being forced by the EU to make an equal price point (or any price point) regardless of regional financial status, that is Socialism.





I'm really starting to notice a trend with all of this - those who do not understand basic financials or economics tend to lean towards Socialism/Corporatism and/or Communism.
It has very much become apparent that because these individuals cannot think for themselves, they thus need someone else (i.e. a government or corporation) to think for them... very interesting.

Welcome to the dark cyberpunk future present, it wouldn't have been possible without the removal of Capitalism/Individualism and the rise of Socialism/Corporatism. :borg:
Just remember, when something is free, you are the product.

XVkIjpbInVybjpzZXJ2aWNlOmltYWdlLm9wZXJhdGlvbnMiXX0.jpg
 
I think that's a stretch to take one facet of Socialism, applied to a specific product and call it the definition of Socialism. You could distill this down and say the government being involved in it means poor choices will be made.
 
Red Falcon said:
Then setting the price down to €10 (using my example) for all regions would still be a lose-lose scenario.
Doing so would allow the game to be affordable in the impoverished areas, but being forced to do so as well in the financially capable areas would be cutting the profits of the developers, which would financially damage them to the point where they might either go bankrupt or close their doors outright, thus no longer allowing for any further AAA games from them, or potentially any games from them.

So under Socialism, forcing the developers to set the price 'equally high' screws over those individuals in impoverished areas, and forcing the developers to set the price 'equally low' screws over the developers themselves, thus stifling innovation and competition.
A government forcing a private entity to set a price, high or low, without choice is the definition of Socialism.
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A government forcing these things is the definition of Over Reach. Socialism would be creating it equally for all, but forcing a unified price across all of the EU isn't equal. Equality, in this case, would be making the cost relative to a portion of each area's average disposable income which is a statistic the EU does track.
 
Lakados said:
A government forcing these things is the definition of Over Reach. Socialism would be creating it equally for all, but forcing a unified price across all of the EU isn't equal. Equality, in this case, would be making the cost relative to a portion of each area's average disposable income which is a statistic the EU does track.
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Yep, totally "equal".

L-But-some-are-more-equal-than-others_142244100973.jpg
 
Red Falcon said:
I think you might be missing the point.
The EU doing this to these game developers and companies is going to be a lose-lose situation.

When the developers themselves are making the price choices by regional financial status, that is Capitalism.
When the developers are being forced by the EU to make an equal price point (or any price point) regardless of regional financial status, that is Socialism.
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You seem to be missing the point to the message you responded too, it was very explicit about the EU forcing a different price by market based on region financial status would also be socialism, the price strategy is not the socialism aspect of it, government involved into price setting is (regardless of outcome).
 
LukeTbk said:
You seem to be missing the point to the message you responded too, it was very explicit about the EU forcing a different price by market based on region financial status would also be socialism, the price strategy is not the socialism aspect of it, government involved into price setting is (regardless of outcome).
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Ah, I should have made that clearer, you are correct.
 
Meh, we're talking about items with loose pricing to begin with. If you want regional pricing then someone should be able to buy an RTX 3060 for like $200 because their area has a lot less income. I don't see that panning out too well that one area can get the exact same product for 1/4 of the cost of another area. The only difference between the phyiscal and the virutal items in question is that you can add artificial limitations on a product that doesn't have many supply limitations. If people allowed it I'm sure GPU companies would be more than willing to geo restrict physical items so they could charge even more in certain locations.
 
bman212121 said:
If people allowed it I'm sure GPU companies would be more than willing to geo restrict physical items so they could charge even more in certain locations.
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GPU pricing change a lot market to market, the physical nature of the items and shipping cost make that easier to work even without having to artificially limit someone from buying elsewhere forcely and not just loosely (many place that sell those type of items do not ship overseas)
 
Red Falcon said:
Thus, a majority of those impoverished individuals can now afford to play this new AAA game because of the price that we as the developers personally set, thus allowing a profit of €9000, and allowing 900 out of 1000 individuals to affordably enjoy the game - this makes it a win-win situation.
This is the definition of Capitalism.
Click to expand...
or... OR.... more people pirate and then the people that lose are developers. We all like to think the legitimate way is the only way, but it isn't.
9b79e1428748f631b5d3edb8d48b22fa7bf0a7905c1033170f.jpg
Thus, only 20 individuals can now afford play this game thus excluding a majority of those in the area who can not afford to take such a financial hit at such a steep price, and this only allows a profit of €1000 instead because of the EU forcing us as the developers to sell at this 'equal' price, instead of us as the developers being allowed to sell it at a price of our choosing to make a profit of €9000 like before - this makes it a lose-lose situation.
This is the definition of Socialism.
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If you don't sell cheaper games then someone else will. That's capitalism.
Do you see now why Capitalism works, and why Socialism does not?
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All I see is a lot of citizens of countries who will buy a lot more indie games and or pirate overpriced games. You won't win either way.
 
DukenukemX said:
or... OR.... more people pirate and then the people that lose are developers. We all like to think the legitimate way is the only way, but it isn't.
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This is the major reason why there is regional based pricing in the first place. In Vietnam as an example the average GDP is $3500 (GPD nominal). If you think most people can afford a $60 game, you're wrong. But if you can turn them into a customer, even at $5 it's worth more to the devs to make that money than to price it at $60 and just have everyone in an entire region just pirate the game. Which by the way is what happens often now when regional pricing models aren't used (this is also why movies etc are getting launched in China and SEA first to combat piracy and to turn them into legit customers rather than getting everything pirated - this is another great example of region based pricing, as obviously they charge less per ticket in China vs the US based around what the average Chinese citizen can afford).

The rest of your post isn't even relevant - make the games cheaper? Obviously that's what they were doing, making them cheaper in regions that it's relevant and making them more profit overall. It makes zero sense for games to be $5-$10 in the US, that's literally a money losing proposition (as in, not making their money back losing proposition) - but in the Baltic's and SEA? It makes perfect sense and combats piracy at the same time. Because it's within the buying ability of their customers and removes the profitability from pirates, which is a serious market in Vietnam. In Vietnam again as an example it's big business still to pirate American movies that they actually sell on burned discs (again $3500 GDP, every possible business is a side hustle - current blockbuster American movies can generally be had for $1-$2 US), and obviously the government there overlooks this "business". I would imagine it's similar to games, though I personally didn't go looking while I lived there. (Internet isn't ubiquitous still like it is here, a lot of folks go to cafe's to mooch internet. Although the mobile phone generation is expanding - again probably making mobile phones their most used gaming device over PC's or consoles - but even still disc based piracy I would expect to be a greater "issue" than piracy over the internet in Vietnam).

You can have your opinion - but straight up from an economics standpoint having region based pricing solves a huge amount of issues. Saying it should just be cheaper everywhere is missing the point and the issue (and would also just make making AAA games impossible financially). Pricing would be the same in the US (and everywhere else obviously as they would be "forced" to have only one price) and these companies would just end up losing money as essentially entire markets would pirate. So arguing that they shouldn't be able to sell games for $60 in the US and then $5-$10 in Vietnam is literally just dumb and doesn't benefit the consumer it's supposed to be "protecting" or the company. It's straight up government regulation that is "supposed to" create fairness and equality all while actually just creating more regulation that makes everyone less profit and makes the games we enjoy less viable (as in makes all these companies want to take less risks financially as they continue to search more and more for the "sure thing").

And to be clear this obviously also affects Indy devs who can use region based pricing to also maximize their profits for the exact same reasons. That shouldn't really require any additional explanation.
 
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UnknownSouljer said:
This is the major reason why there is regional based pricing in the first place. In Vietnam as an example the average GDP is $3500 (GPD nominal). If you think most people can afford a $60 game, you're wrong. But if you can turn them into a customer, even at $5 it's worth more to the devs to make that money than to price it at $60 and just have everyone in an entire region just pirate the game. Which by the way is what happens often now when regional pricing models aren't used (this is also why movies etc are getting launched in China and SEA first to combat piracy and to turn them into legit customers rather than getting everything pirated).

The rest of your post isn't even relevant - make the games cheaper? Obviously that's what they were doing, making them cheaper in regions that it's relevant and making them more profit overall. It makes zero sense for games to be $5-$10 in the US, that's literally a money losing proposition (as in, not making their money back losing proposition) - but in the Baltic's and SEA? It makes perfect sense and combats piracy at the same time. Because it's within the buying ability of their customers and removes the profitability from pirates, which is a serious market in Vietnam. In Vietnam again as an example it's big business still to pirate American movies that they actually sell on burned discs (again $3500 GDP, every possible business is a side hustle), and obviously the government there overlooks this "business". I would imagine it's similar to games, though I personally didn't go looking while I lived there. (Internet isn't ubiquitous still like it is here, a lot of folks go to cafe's to mooch internet. Although the mobile phone generation is expanding - again probably making mobile phones their most used gaming device over PC's or consoles).

You can have your opinion - but straight up from an economics standpoint having region based pricing solves a huge amount of issues. Saying it should just be cheaper everywhere is missing the point and the issue (and would also just make making AAA games impossible financially). Pricing would be the same in the US (and everywhere else obviously) and these companies would just end up losing money as essentially entire markets would pirate. So arguing that they shouldn't be able to sell games for $60 in the US and then $5-$10 in Vietnam is literally just dumb and doesn't benefit the consumer it's supposed to be "protecting" or the company. And to be clear this obviously also affects Indy devs who can use region based pricing to also maximize their profits for the exact same reasons. That shouldn't really require any additional explanation.
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I agree with you, but this needs to be a two way street. Someone has to pay for the game, so the people in the US pay for said game, and the game companies can sell the game for additional profit in other markets that can't pay full price. So if you want to be able to make a profit by selling an item for less money elsewhere, then people should be able to buy the item for less elsewhere and use it as they see fit. So if you're saying it's fine that it works both ways I'd agree with you, but that means they should be getting fined for Geo-blocking because it doesn't make sense they can make additional profits but the consumer can't shop for the best price.
 
bman212121 said:
I agree with you, but this needs to be a two way street. Someone has to pay for the game, so the people in the US pay for said game, and the game companies can sell the game for additional profit in other markets that can't pay full price. So if you want to be able to make a profit by selling an item for less money elsewhere, then people should be able to buy the item for less elsewhere and use it as they see fit. So if you're saying it's fine that it works both ways I'd agree with you, but that means they should be getting fined for Geo-blocking because it doesn't make sense they can make additional profits but the consumer can't shop for the best price.
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Depends on literal vs figurative. If you're physically in one of those regions with the lower pricing model or structure then sure, but if you're not that's entirely different. That's obviously what the Geo-fenced model was supposed to be protecting.

Let's put it another way, if we were back to disc based distribution (as opposed to internet based distribution like we more or less are now) if you decided to get a different region game there would be a "cost". So if we want to really make it fair, sure you can get your $30 version of a AAA from Ukraine, but then it also is in "Russian Only". So if you want the best price as based for that region then you should have to live that consequence.

Otherwise what we're really discussing is whether or not the grey market should be allowed to exist or not. And that to me is an entirely different discussion. It's obviously one that basically every manufacturer of goods doesn't want or like and combats regional pricing models while giving resellers a big business and cut in the middle of everything. From a pure capitalism, Friedman, perspective the gray market is great. But obviously if it's allowed to do whatever it wants, then what's to stop Best Buy, or Amazon, or whomever from never buying from US distributors and simply buying grey market games/goods only in order to have the lowest prices or the biggest mark up or both? If there are no protections in place to prevent the grey market then what is the incentive if any to buy the goods that are supposed to be from your region? The answer is: there is none.

Obviously most companies combat grey market as best they can be not offering support for grey market goods (Canon and Nikon as an example won't service cameras for other regions while in the US). But that hardly works as people can find other service centers and is also not relevant at all to software.
 
No, that wouldn't work, since the Americans (or wealthier countries in EU) would just buy at the cheaper price (using VPN or whatever) meaning everyone is paying $5 and the developers would go out of business.
 
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