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
Gzero
Lets clear this up a bit. Grand theft auto 4 costs £25

http://www.play.com/Games/PC/4-/6187127/Grand-Theft-Auto-IV/Product.html

Thats a pretty good price for a popular game, and is expected.
I can't check the price on steam as the store is running slow for me.
But converting £25 into USD = $37
Converting £25 into EUR = 27.

So if it is $37 into 37 euros, then that is unfair (after tax).

Its cheaper to buy from play.com for both GTA 4 and Fallout 3 by 2 pounds.
Steam store didn't bring the advantage it promised to bring, which was supposed to be lower prices. I'd rather have my game disc than an account.
Posted on Reply
#2
DarkMatter
I've been reading about taxes to digital distribution and in every legal document that I found they say that for non-EU supplier to non-bussiness individual transactions the VAT has to be applied, and ONLY the VAT from what I can understand:
For the non-EU supplier whose EU customers are non-business individuals or organisations, from July 2003 there has been an obligation to charge and account for VAT on these sales just as EU suppliers have to do.

The Commission claimed at the time of introduction that the taxation framework contained a number of elements designed to make the operation of the tax as simple as possible and, in particular, to ensure that it is not disruptive or onerous for suppliers of digital services.
Posted on Reply
#3
erocker
DarkMatter said:
I've been reading about taxes to digital distribution and in every legal document that I found they say that for non-EU supplier to non-bussiness individual transactions the VAT has to be applied, and ONLY the VAT from what I can understand:
Yes, but what taxes/royalties/premiums/etc. does the non-EU supplier have to pay to the government?
Posted on Reply
#4
Triprift
Lol one thing though id be delighted if we here in oz were charged the same dollar amount as is quoted in the US price but no we get slugged more i still think is great. I guess being an Aussie though im just used to higher prices for software. =/
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#5
TheMailMan78
Big Member
Again I ask you guys across the Atlantic what do you pay for an Xbox360 game or a PS3 game in the store?
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#6
Triprift
Id say like everyone else it would cost more for console games they cost around 120 bucks while pc is av 70 to 80 bucks.
Posted on Reply
#7
TheMailMan78
Big Member
My point is if you guys pay 59.99 euros for an Xbox game and we pay 59.99 dollars then this is just Valve catching up with the norm.
Posted on Reply
#8
D3mon_Hunt3r
When i purchased games through Steam i paid what was on the price in dollars + tax i payed nearly that $1=€1, if they want to put that equation if they keep this rule they can suck my lollipop. It's expensive enough already...
Posted on Reply
#9
Triprift
I must admit when i first read it i was like whats the big deal but then i thought oh right u guys getting charged more then i thought welcome to an Aussie gamers world. :p:D
Posted on Reply
#10
TheMailMan78
Big Member
I just found this.
One thing about VAT... taxes is goverened by the local regions goverment/state/country. And to sell an piece of software with or without taxes are defined by local laws.
If this is true then Valve is just making its margin. They may be ripping one group of people off to offer the same product to another group for a fair price. If this is the case you have no one to blame but your own local government. Valve is just leveling the playing field. IF the quote I posted is true.
Posted on Reply
#11
Valdez
TheMailMan78 said:
My point is if you guys pay 59.99 euros for an Xbox game and we pay 59.99 dollars then this is just Valve catching up with the norm.
We pay around 60 EUR (15990 HUF - today 1EUR=265HUF) for an xbox360 game in Hungary. There are some cheaper and some more expensive titles though.
Posted on Reply
#12
Pinchy
Hmm to all you Valve defending dudes:

If European customers pay the same dollar amount in Euros (ie, a 50 dollar game costs 50 Euros)...why does Valve charge us Aussies in USD and not AUD?

If I want to buy a $49.99 game off Steam, it will cost me $73 AUD.....why doesnt the $49.99 stay in AUD like it has changed to Euro?

One word: Greed.
Posted on Reply
#13
Triprift
Indeed exactly what i was saying before.
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#14
v12dock
Someone is getting fired
Posted on Reply
#15
theJesus
Hmmm, would the following be possible?

1: Make US steam account.
2: Deposit money into PayPal.
3: Pay with PayPal.

I assume you should be able to get US pricing that way.
Posted on Reply
#16
ghost101
erocker said:
Yes, but what taxes/royalties/premiums/etc. does the non-EU supplier have to pay to the government?
None. They pay VAT (which no one is complaining about) and corporation taxes on profits (do they even do this as an American based company, since the US government will probably want to tax the profits).

Besides corporation tax is actually lower in the uk than the states.

http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#Tax_base_and_rates

http://en.wikipedia.org/wiki/United_Kingdom_corporation_tax#Rates_and_payment

I haven't checked other EU member states, but if corporation tax is lower there, then they can officially reside there and export to the rest of the EU with no additional charge.

Also people should remember that firms can charge what they want as this isn't anti-competitive. It only is if firms collude or monopolise the market. Both are difficult to prove as shown by itunes case. And even if you can prove this, then you can't mandate lower pricing but should somehow improve competitive behaviour or the competition itself. Steam is no way a monopoly when there are hundreds of online stores selling the same stuff for delivery.

Also console RRP/MSRP prices in europe are 59.99 EUR or £39.99. Obviously you get lower prices online due to the competition and only the most demanded games can maintain this price. Also in the UK most PC games actually retail at £29.99 to £19.99. PC game prices and console game prices are very different (i guess due to piracy).

For example

http://www.amazon.co_uk/dp/B001DU6OHY/?tag=tec053-21

PES 09 has a recommended retail price of £29.99 (currently selling for £17.99) and is one of the most popular games currebtly on the market.

Same game on the 360 or ps3 has a RRP of £49.99 (amazon never sold it at this price though, it was always below £40 and the current price is £24.14)

http://www.amazon.co_uk/dp/B001DU4V42/?tag=tec053-21

In addition to all this, prices drop very quickly.

When did the latest installment of Prince of Persia come out on the 360? Already at £17.99 http://www.play.com/Games/Xbox360/4-/8284163/Prince-Of-Persia/Product.html

Its still at $59.99 on amazon.com and sub £20 ($30 inc VAT) on amazon.co.uk.
Posted on Reply
#17
OnBoard
Gzero said:
Lets clear this up a bit. Grand theft auto 4 costs £25

http://www.play.com/Games/PC/4-/6187127/Grand-Theft-Auto-IV/Product.html

Thats a pretty good price for a popular game, and is expected.
I can't check the price on steam as the store is running slow for me.
But converting £25 into USD = $37
Converting £25 into EUR = 27.

So if it is $37 into 37 euros, then that is unfair (after tax).

Its cheaper to buy from play.com for both GTA 4 and Fallout 3 by 2 pounds.
Steam store didn't bring the advantage it promised to bring, which was supposed to be lower prices. I'd rather have my game disc than an account.
Steam price
49,99€
Buy Grand Theft Auto IV

Play.com is ripping euro buyers off too with the current pound to euro ratio. We can only buy with euros to outside UK address. If you change the currency in the corner that brings GTA IV to 34,99€. Still it's cheaper than In Finland, 38€ cheapest price or 41€ delivered.

I've just been using play.com for years, used to buy everything with pounds (saved a bit). Don't know when was the last time they have checked the conversion rate, have to write them about it. (and yeah I get that they are hiding the postage to the conversion, but almost 10€ is too much for a dvd). edit: did write them an e-mail, Friends 10 season boxset has £55/$82/60€ extra price in it if you just change the currency :)
Posted on Reply
#18
JoJoe
I'm not arguing for one side or the other here, but I think everyone is forgetting that digital distribution is NOT free.

Yeah they cut the box, the disc, the manual, blah, blah, blah out of the mix. Instead they have to have the servers, bandwidth, electricity, blah, blah blah for digital. Could very well cost as much or more to digital.

Maybe internet/bandwidth costs in europe/other countries are way more than US. Maybe electricity to run their servers costs more. Maybe Valve is greedy. Maybe the government is greedy. Maybe mathematics is being greedy.

I don't know why prices are what they are, You don't know why the prices are what they are. Everyone just calm down.

If you can get the games cheaper by buying a phsyical copy than do that.
Posted on Reply
#19
Ravenas


"Screw you Europeans" -Gabe Newell
Posted on Reply
#20
theJesus
JoJoe said:
If you can get the games cheaper by buying a phsyical copy than do that.
Agreed. Besides, you can still use Steam to manage your games for free, even if you don't buy through Steam.
Posted on Reply
#21
Wile E
Power User
TheMailMan78 said:
My point is if you guys pay 59.99 euros for an Xbox game and we pay 59.99 dollars then this is just Valve catching up with the norm.
Everbody seems to be avoiding this question. I'm using GTA IV as an example on Amazon.com and Amazon.de.

http://www.amazon.com/dp/B000FRU1UM/?tag=tec06d-20

http://www.amazon.de/exec/obidos/ASIN/B000FII8CE/shoppingdevideogames-21/ref=nosim

Aside from the US one being on sale, they are both normally 59.99 in US dollars and/or Euros.

Seems to me a big deal is being made about this, when it is already the industry standard. Steam was just late to the game.
Posted on Reply
#22
wiak
erocker said:
I would guess most deffinitely! High taxes.
well you can rule out tax on norway, norway dont have tax on digital distribution
only on gods that goes thru customs last time i checked
Posted on Reply
#23
theJesus
Wile E said:
Everbody seems to be avoiding this question. I'm using GTA IV as an example on Amazon.com and Amazon.de.

Seems to me a big deal is being made about this, when it is already the industry standard. Steam was just late to the game.
I noticed that as well . . .

I kinda figured as much, but I still think it would be fairly easy for EU customers to get their games at US prices.

wiak said:
well you can rule out tax on norway, norway dont have tax on digital distribution
only on gods that goes thru customs last time i checked
:roll: When was the last time a god came through customs in norway?
Posted on Reply
#24
ShinyG
Here are some prices for GTA4 in Romania (which btw, is part of the EU):

Old price on Steam in $: %49,99 + 19% Romanian VAT = $59.49 = 168 Romanian Lei

New price on Steam in E: E49,99 + 19% Romanian VAT = E59.49 = 233 Romanian Lei

Typical price of the hard-copy of GTA4 in normal retail stores = 180 Romanian Lei

There's something fishy about paying more for a digital download than for a hard copy!
Either Valve is violating EU Trade laws like Apple did with the iPhone, in which case the EU will b1tch slap them until they correct the prices, OR the Romanian retail stores are doing something illegal.
I already made filled out a form to the European Union to complain about Valve's price policy, so did many other European Steam users. Hopefully they will take action.
If not, that's entirely Valve's loss! They're the ones loosing customers over this decision...
I'm not buying anything from Steam until they correct this problem!
Posted on Reply
#25
theJesus
imo, there's only two good (conditional) reasons to buy through Steam:

1: If it's cheaper than boxed version.
2: Convenience (provided the price is <~ boxed price.
Posted on Reply
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