Friday, December 19th 2008

Valve Inflicts European Gamers with $1 = €1 Equation

At the time of preparing this report, US $1.42 makes a Euro. Here's what Valve seems to be pricing its games and those of its affiliates on the Steam platform as: $1 = €1, ignoring exchange rates, meaning that if a product costs say $20 on Steam, you will be charged €20 (approximately $27.86), if you are buying from the EU. Several game titles have been priced in this fashion. Call of Duty 4, priced at US $49.99 ($59.4 after applicable taxes) is tagged at €49,99 ($70 before applicable taxes).

In reaction to this, disgruntled European gamers have started protesting this move by Valve on online forums, an example of which can be found on Valve's own Steam Users' Forums. Also found on the same board is a user group named 1€ ≠ 1$. Certain groups have even started reporting this to the European Commission Consumer Cell. The gamers allege that they have been given a largely unfair pricing scheme with products on the Steam platform, that violates trade laws. The Steam platform serves gamers from around the world with a common platform to purchase games, and coordinates multiplayer gaming and updates. An unhappy consumer base from one of the largest markets in the world could certainly impact on its revenues.Source: Tweakers.net
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196 Comments on Valve Inflicts European Gamers with $1 = €1 Equation

#1
erocker
Then what is to keep Steam from saying "screw it", we just aren't going to sell anything in the EU? You know what I'd do if my local government started to over-tax my business. Move! If I didn't have the choice to move, I would have to raise my prices. I'm not in the business of supporting my own government by losing money, I'm in the business to hopefully make myslef money.
Posted on Reply
#2
Ahhzz
hahahahahahahahahahah
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#3
Pixelated
erocker said:
Then what is to keep Steam from saying "screw it", we just aren't going to sell anything in the EU? You know what I'd do if my local government started to over-tax my business. Move! If I didn't have the choice to move, I would have to raise my prices. I'm not in the business of supporting my own government by losing money, I'm in the business to hopefully make myslef money.
What do mean overtaxed? It seems to me that the users are paying the taxes not Valve. Besides Steam makes too much money from selling games in the EU to simply say screw it. In fact that's flat out ridiculous and will never happen.
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#4
TheMailMan78
Big Member
You guys trashing Steam don't seem to realize what Valve has done for this industry and continues to do. Steam currently works VERY well and you pay full price for these games for a number of good reasons. Like I said before we all go and burn Valve at the steak I think we need to learn WHY they did this. I cant imagine their marketing department being this stupid. There has to be more layers to this cake. Someone is being greedy. Lets just make sure we know who it is first. The EU, US or Valve.

If by chance its the EU governments or the U.S. I wouldn't suggest you stop supporting Valve. These guys have always had the best interest of the gamer in mind. Without them I think we would have an entire industry run in EA or Blizzard style. Think about that nightmare before we judge.
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#5
mdm-adph
rpsgc said:
Why the hell should it cost more? It's fucking digital distribution ffs. We already pay VAT now this bullshit? Screw you Valve, go fucking burn in Hades.
Like others have said on here, it's not the taxes you pay -- it's the taxes Steam has to pay for doing business in Europe. They're probably quite a bit higher than they are in America, so in turn, they pass on the cost of that to European consumers.

Even if it's a "completely digital content distribution system," they still have to deal with European banks and regulatory agencies to get European gamers' credit card payments accepted, and doing these things incur taxes and fees.

Like I said, though, they could be a bit more delicate about doing it, rather than treating all currency as if it was equal (which it's not).
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#6
rpsgc
I just love how people manufacture some barely credible excuses just to defend Steam and Valve. Oh they pay taxes? You have proof?

Do you even know how VAT works?!



Of course, in Europe there are taxes aplenty! It is the land of taxes! Taxes, taxes and taxes! It is a land of strange people and strange taxes and greedy governments who overtax everything and everyone, ooo beware!! Oh poor poor american corporation, it had to pay the evil evil European taxes all by itself, wah wah.


So what's your excuse for Steam games costing more than retail? :rolleyes:
Posted on Reply
#7
TheMailMan78
Big Member
rpsgc said:
I just love how people manufacture some barely credible excuses just to defend Steam and Valve. Oh they pay taxes? You have proof?

Do you even know how VAT works?!
First of all welcome to the forums rpsgc.

Second of all be careful how you approach your points and opinions. You can and WILL be ripped apart by some pretty intellectual people here. After all this isn't a Pokemon forum.
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#8
Swansen
rpsgc said:
I just love how people manufacture some barely credible excuses just to defend Steam and Valve. Oh they pay taxes? You have proof?

Do you even know how VAT works?!
???? thats assuming just as much, considering, you don't know these people, and considering that all the information about how VAT works is publicly available, and yeah, if they do business in Europe, then they pay taxes, i'm pretty sure its that simple. On that, one person suggested that there is more government taxes to be paid in Europe than here in the US, not all of us. Lastly, with the way US gov is right now, big business hardly has to pay out anything to the government right now, so yes, i'm sure Valve is taxed heavier in Europe right now.
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#9
mdm-adph
rpsgc said:
I just love how people manufacture some barely credible excuses just to defend Steam and Valve. Oh they pay taxes? You have proof?

Do you even know how VAT works?!



Of course, in Europe there are taxes aplenty! It is the land of taxes! Taxes, taxes and taxes! It is a land of strange people and strange taxes and greedy governments who overtax everything and everyone, ooo beware!! Oh poor poor american corporation, it had to pay the evil evil European taxes all by itself, wah wah.


So what's your excuse for Steam games costing more than retail? :rolleyes:
No one's talking about Steam's games costing more than retail (at least I don't think).

The discussion is about why a product costs more in the EU than it does in the US, and the decision about why is leaning towards the increased costs of doing business in the EU.

Now, there's no need to be inflammatory -- no one's asking for pity for Steam/Valve. They knew the costs of doing business in the EU, and they still chose to do so -- I really don't think they'd have chosen anything else; the EU is a huge market, and one that a business can't really ignore, even if the costs/fines are greater there (just look at Microsoft!).
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#10
xubidoo
id never buy a game off steam ,its cheaper to order a boxed retail copy from somewhere like Play.com ,and it has a real disk and manual :)

Steam has always been a total ripoff for uk gamers.
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#11
rpsgc
TheMailMan78 said:
First of all welcome to the forums rpsgc.

Second of all be careful how you approach your points and opinions. You can and WILL be ripped apart by some pretty intellectual people here. After all this isn't a Pokemon forum.
First of all I registered here before you, so please... enough patronizing.

Second, I don't care how "intellectual" they might be, as long as they don't have proof to what they're saying then it's nothing more than assumptions and opinions, not fact.

Third, ad hominem already? Please, if you're going to call me an idiot at least be man enough and do it directly instead of dropping hints about me being some 13yo immature newbie who just registed and likes Pokemon and can't form a coherent post/chain of thought.


So by your logic Amazon (US) also pays taxes to sell to European customers. Nevermind the fact that they operate and are based off the US. Because the EU forces American corporations on American soil to pay taxes if they want to sell to some random chap in the EU. Right? And Steam is based off an American server.
Posted on Reply
#12
btarunr
Editor & Senior Moderator
erocker said:
Then what is to keep Steam from saying "screw it", we just aren't going to sell anything in the EU?
The retail hard-copies of Valve games sold in stores. Non-Valve games are sold anyway. The real "scr** it" will come from the consumers, soon enough if this pricing scheme stays on.
Posted on Reply
#13
TheMailMan78
Big Member
Swansen said:
???? thats assuming just as much, considering, you don't know these people, and considering that all the information about how VAT works is publicly available, and yeah, if they do business in Europe, then they pay taxes, i'm pretty sure its that simple. On that, one person suggested that there is more government taxes to be paid in Europe than here in the US, not all of us. Lastly, with the way US gov is right now, big business hardly has to pay out anything to the government right now, so yes, i'm sure Valve is taxed heavier in Europe right now.
Well FYI the U.S. government taxes all business in the U.S. about 30% across the board. Capital gains, Customs, ect. Ireland is around 11%. However its the import tax to IP's "Intellectual properties" that Europe has gone wild on. This is why I think Steam had to jack up their prices. But I think its a safe assumption. So yeah I defend Valve currently because I thought you were considered innocent until proven guilty in the free world.

I know its in style to bash the "rich" or large cooperations but your government no matter what country is the biggest corporation/thief you could ever imagine. This is why I tend to defend the privet sector.

rpsgc said:
First of all I registered here before you, so please... enough patronizing.

Second, I don't care how "intellectual" they might be, as long as they don't have proof to what they're saying then it's nothing more than assumptions and opinions, not fact.

Third, ad hominem already? Please, if you're going to call me an idiot at least be man enough and do it directly instead of dropping hints about me being some 13yo immature newbie who just registed and likes Pokemon and can't form a coherent post/chain of thought.


So by your logic Amazon (US) also pays taxes to sell to European customers.
Well man you now have 11 posts. I could care less when you registered. Your new to contributing to the forums. This is fact. Sorry.

Second you are also making assumptions. We ALL ARE. I don't work for Valve and you don't ether. You see the price go up so you assume greed on Valves part. You don't question why. You ASSUMED.

Third I did no such thing. I was giving you a fair warning that your tone is heading towards flame land and you wont like it there. You will be crushed and this is a great forum. It sucks when someone gets banned......unless its candle.

Amazon sells in Europe and doesn't face tariff because it has a branch in Europe. Steam doesn't.
Posted on Reply
#14
DarkMatter
They are just being TOO GREEDY. One way or another. It's simple. There's no way that:

Game + Digital distribution + taxes >= Game + Documentation and box + Overseas distribution + Taxes + Intermediaries + Retail stores profit + VAT.

And that's exactly what happens here. They have become greedy, greedy, greedy. And they'll pay the price that costs trying such a thing.
Posted on Reply
#15
mdm-adph
DarkMatter said:
They are just being TOO GREEDY. One way or another. It's simple. There's no way that:

Game + Digital distribution + taxes >= Game + Documentation and box + Overseas distribution + Taxes + Intermediaries + Retail stores profit + VAT.

And that's exactly what happens here. They have become greedy, greedy, greedy. And they'll pay the price that costs trying such a thing.
I was told there would be no math
Posted on Reply
#16
TheMailMan78
Big Member
DarkMatter said:
They are just being TOO GREEDY. One way or another. It's simple. There's no way that:

Game + Digital distribution + taxes >= Game + Documentation and box + Overseas distribution + Taxes + Intermediaries + Retail stores profit + VAT.

And that's exactly what happens here. They have become greedy, greedy, greedy. And they'll pay the price that costs trying such a thing.
You have no idea what they pay for digital distribution/IP taxes in Europe. It may in fact be more expensive than to import physical goods.
Posted on Reply
#17
El Fiendo
Also, while it may be small, the nature of exchange rates play a part. Being that they always fluctuate, most places will have a set rate for the day that is usually far above what it is actually at that point. For example right now CAD to USD is 1.21xxx via xe.com. However looking at what paypal is currently offering as exchange rate is upwards of 1.26xxx. Only 5 cents here but I've seen as much as 10 cents.

Before you start flaming me I know they don't use paypal, it was merely a convenient example. Whatever their currency solution is it could very well suffer from the same problem that I find with paypal. Mind you, I just don't know. Then again I should think none of you do either.
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#18
kylew
Eh? What I don't understand is, what's changed? Europeans have been buying games from steam for years, where did all these taxes suddenly come from? If they make the rate 1to1 then how can steam stay inline with retail pricing?

COD4, when it came out on steam was $70. 1to1 rate = 70 Euro, I HIGHLY doubt that's even close to European RRP.

As for the UK, COD 4 on the PC was £30 when it came out, 70 Euro would put that at £50, I've never seen a PC game for £50 that wasn't a special collector's edition.

What's different now, and is this implemented for the UK customers or just ones that use the Euro?
Posted on Reply
#19
crazy pyro
But the price in the UK is in fact lower than in stores, that makes sense. There is no way they're paying the vast amount extra on games in tax since the exchange rate is near enough to 1 euro to 1 GBP, I severely doubt they're paying £23 or 23 euros in taxes, someone in VALVe screwed up big time, the 70 page hate thread on their forums is going a bit far but they are well and truly screwing over anyone who lives on the continent.
Posted on Reply
#21
DarkMatter
TheMailMan78 said:
You have no idea what they pay for digital distribution/IP taxes in Europe. It may in fact be more expensive than to import physical goods.
I DO HAVE an idea, and I can guaratee you it's not that much. Although I don't know exactly how much it is, it's the same for all companies doing Digital Distribution (indiferently if they are or not from outside EU AFAIK) and the rest is charged htrough VAT. If many other companies can operate just well, Valve can. Increasing the cost by 1-2 euros could have been "fair", but come on...

Open the eyes, they just want as much of the pie as they can. They just thought "Ey they pay 50 euros for retail copies there."

"Let's forget about the fact that those 50 euros pay the retailers, the small distributors and intermediaries and the expenses of making and printing the documentation and boxes for all those countries. Let's get the money."
Posted on Reply
#22
erocker
It would be nice to see how much Steam actually has to pay the EU to sell software as opposed to other countries. I know all about this kind of crap living in an over-taxed city. It wasn't always like this. Before idiot people started voting other idiots into office, in a time when politicians actually had a sense of monitary responsibility, there were a lot of businesses in this town. Taxes went up, the businesses had to raise their prices to compensate. People didn't want to pay so much so they took their business elsewhere and the businesses in town had to either close, or move to a lesser tax hell. Once this happens the town has to increase taxes even further due to getting less revenue from the businesses that moved out. Know what happens next? Ghost town. Go ahead, let your politicians run your town/country and tax the hell out of you and force your jobs elsewhere. Or, pay a premium.
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#23
Castiel
Wow that sucks. But oh well at least it doesn't effect me:D
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#24
Swansen
TheMailMan78 said:
Well FYI the U.S. government taxes all business in the U.S. about 30% across the board.s candle.
Off topic, but i don't like Corporate USA or the government, they are both greedy and nether have the peoples interest in mind. Large corporations hardly ever pay the taxes they are suppose to, they are an extreme amount of loopwholes, and right now, the larger the business, the larger the tax breaks.

As far as Valve goes, who knows whats going on, maybe its greed, maybe its higher cost of doing business, who knows, but Valve should release a public statement detailing their pricing model, if they really cared about their customers, thats what should happen, but it won't.
Posted on Reply
#25
erocker
Swansen said:
Off topic, but i don't like Corporate USA or the government, they are both greedy and nether have the peoples interest in mind. Large corporations hardly ever pay the taxes they are suppose to, they are an extreme amount of loopwholes, and right now, the larger the business, the larger the tax breaks.

As far as Valve goes, who knows whats going on, maybe its greed, maybe its higher cost of doing business, who knows, but Valve should release a public statement detailing their pricing model, if they really cared about their customers, thats what should happen, but it won't.
Well said, and I believe you are correct on both parts. We need honesty from both government and businesses no matter what country they are based in. Hopefully things in America will change in this respect but time will tell, they are the ones with the money and money is power. We will see...
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