Quote of the Decade
Today, Kotaku reposted an earlier article from Rock, Paper, Shotgun entitled “Do We Own Our Steam Games?” which was the inspiration for yesterday’s post. The example scenario that makes up half the article is not exactly the most flattering, as it involves a Russian gamer who, quote, “[…] openly admits that he’s gifted games to people in exchange for money, to help them get them cheaper.”
In other words, some Steam games are cheaper in Russia, so you could call this guy up, have him buy LIMBO for the equivalent of $0.50 instead of $9.99, have him gift the game to you, and then you give him $3 or buy him a beer or whatever in exchange. Of course, regional price differences sometimes work the other way too. For example, Deus Ex: Human Revolution costs $29.99 in the US, but €49.99 in Europe… the equivalent of $66.36, or an increase of 121.27%.
That sort of thing will get you banned, of course.
It was around this time in the comments that someone named “iteyoidar” dropped this gem:
Funny how when it comes to globalization, when it’s games devs and publishers dodging domestic laws and getting cheap shit in other countries, it’s just business, but when it’s the consumer using the same thing to their advantage to buy cheap media, it’s “fraud” and “cheating” and they’re all scum.
Yeah. Yeah. Is there a particularly good reason why we tolerate price discrimination on identical, digital goods? Other than, of course, that companies wouldn’t like it?
I get that standards of living are different, that you can’t ask for $15/month in China when the average person makes $20.27 a day, and so on. But as a consumer, why should I care? Spare me the “holistic” crap of feeding game devs and races to the bottom, because obviously that shit only works one-way when it comes to outsourcing jobs. Why is it okay to presume a business has a right to profit, but a consumer lacks the equivalent? Because that hurts businesses?
Oh. Oh, I see.
The people that can pay more should pay more, eh? Where have I heard that before?
Posted on February 9, 2012, in Commentary and tagged Kotaku, Price Discrimination, Quote of the Decade, Rock Paper Shotgun, Steam. Bookmark the permalink. 15 Comments.
In An Age 
> regional price differences sometimes work the other way too
Sometimes? Name one product that’s cheaper in Europe then in the US…
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Cheese. The price you pay for good cheese (like quality brie) here in the States is highway robbery. But then again, that is probably not what you were thinking about exactly :)
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BTW the first time I read the same comment (almost word by word) was on slashdot.org a long long time ago.
Of course this does not make it any less 100% spot on :)
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I see people visiting from China buying electronics in the US, because those devices — even if they were assembled in China! — are less expensive here.
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I agree with your post 100%. I’m totally against pirating games or music etc. But if I buy a game I should be able to give it away, resell it or even destroy it. What I shouldn’t be able to do is buy one copy then reproduce it and give that away to 1000 people.
As for the prices being differnet around the world they have to deal with it. I know I had to deal with it in the IT business as rates fell because there are cheaper people in places like India, China or whereever. If you want globalization then the companies need to take the bad with the good.
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Goodmongo,
Rohan had a good post of why selling something used, which doesn’t get
worn down, is not exactly the same as selling something used that gets worn down.
http://blessingofkings.blogspot.com/2010/09/copyright-bargain.html
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I’m actually more sympathetic to the game companies on used games than this. This is just trade, straight arbitrage. The guy buys a commodity where it it cheap, transports it to where it is expensive, and sells it for a profit. We’ve been doing this for thousands of years now.
The game companies have at least two options. They can eliminate the price differential, making the calculation extremely straightforward. Does gain in sales in expensive territory exceed loss of sales in cheap territory?
Alternatively, they can change the nature of the commodity in the cheap territory so it is different enough from the commodity in the expensive territory. The fix here would be a parallel code branch with Russian localization instead of English (with the English removed entirely, rather than disabled, to prevent hackers from just issuing a patch).
Personally, I think they’ll just kill or reduce the price differential. Sure, it sucks for the Russian gamers who can’t afford the new prices, but that’s just what happens when market segmentation fails.
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I’m not entirely convinced used game sales are any different in the scheme of things; why is EA or THQ (etc) entitled to the profit from the resell of a commodity in the secondary market, but Steam not similarly entitled to the profits of this arbitrage? It would seem to me that you’d have to be all on one side, or all on the other.
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Without going too into detail, the main reason they can do this is because they have written into their EULA’s and the sales agreements we all click through clauses that say something along the lines of “You are purchasing a license to use this product blah blah blah, this license is not-transferable by region,” on their system they get to set the rules for sales and all too often these Terms of Use include clauses that are more or less “Play by our rules or we kick you out and your only recourse is arbitration with us.”…and in many cases these are legally defensible.
I mean, if this practice catches on and becomes more common I’m sure they’ll have to adjust, but I think right now it’s just easier for them to program and algorithm that takes note if someone is gifted a lot of things from certain countries where prices are consistently cheaper…then kick those two out. Because with Steam and most other companies, you did not purchase Mass Effect (as an example), you purchased a license to download and play Mass Effect through steam, subject to all Steam’s rules and such.
It’s pretty lame, but that’s the way it currently works.
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Personally, I’m amazed you can gift games across regions to begin with. That would seem to be the simple, no-nonsense Steam rule to eliminate such arbitrage.
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So Rohan if the game companies win thier argument on used games are you going to be ok when ford and GM make used cars illegal? or when we outlaw garage sales, flea markets and resale shops? The original manufacturers don’t make anything on those sales either and they have the same ethical concerns game manufacturers do.
Of course its all stupid people ignoring the fact that businesses exist to please their customers. Do that and you’ll make money. Don’t do that and you begin to become a pathetic loser trying to change the rules to survive your slow inevitable market death.
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@Sam, should the same laws that govern horse-drawn carriages govern cars?
No, because they are different things, even though they serve the same purpose. And they are different enough such that the laws should be modified to take into account those differences.
Similarly, I believe that digital and physical media is different enough such that the laws governing physical media need to be modified to take into account those differences. Such that the bargain is once again fair to both sides.
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The bargain is only unfair because as the quote above shows, companies want to benefit from globalism and pay very little for labor but they want to be able to isolate and control the rich markets and force them to pay what they think is fair for a “rich” person to pay. But the dichotomy isn’t lost on the consumer thus the laws keep failing. Laws only work if people percieve them to be fair. Customers are only loyal to companies that give them reason to be. Right now the entire game industry is stuck in an pit fight with thier consumers thus they keep losing.
I suspect in the long run everyone will find out they can’t convince people that’s its fair for them to profit off of poor countries but that the consumer shouldn’t get that benefit.
If you seriously think digital products are any different that physical products you’ll spend a long frustrating life trying to understand why your consumers don’t. It doesn’t matter if your right or I’m wrong. What matters is the perception of your customers. Lots of software companies do very well in this modern globalized world. Try figuring out what they do right instead of trying to stack the odds in your favor by passing laws no one believes in.
I do disagree with you. But I think in about 20 to 30 years it won’t matter. Right now China violates more intellectual property agreements in one day than all pirates do in a year. To do business in China you have to file all your intellectual property with the government so they can “check it out”. But companies are busy chasing the weak consumers that are easier targets. Someday most companies will wake up and realize a communist regime has all thier intellectual property and can do anything they want with it.
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I suspect they will find out what happened to all their IP when the ever-increasing Chinese standard of living causes companies to move on to countries with cheaper labor.
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@Kring, books are a perfect example of items you can resell that are not worn down. And with more e-books available there is almost no difference between them and a game. So I don’t see how your argument fits.
As for the EULA and other agreements there are a couple of legal caveats that need to be taken into consideration. All contract laws (in the US) say that if a contract is too one-sided then the contract is null. Secondly, since the contract was written by only one side all terminology and clauses have to be interpreted in the most favorable light for the party not writing the contract.
This doesn’t mean the EULA is null, I’m just not sure they have been challenged in courts to any significant level yet. And the movie industry tried to limit the rights for those buying VCR’s and then reselling them. Courts in the US ruled that the person buying the VCR had the right to resell it as the license was not for that person viewing it but for the physical copy.
Where things get fuzy is if you have a physical copy of th egame or just a download. As mentioned these have not been ruled on in any major court in the US as of yet (to my knowledge at least). Bottom line is things are not clearcut and just because there is a EULA doesn’t mean its legal.
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