this post was submitted on 28 Sep 2023
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I'll admit I may not understand economies well, but the inverse is that these publishers are enabled to charge higher prices in higher-income countries. The cost of creating their goods is constant, so if Valve isn't selling at a loss to poorer regions then they are simply extracting additional profit from higher-income regions on the assumption that those customers can afford it.
I wonder how this kind of scenario plays out in other industries. Regardless, it seems like the EU has a goal of reducing gaps in buying power between their members, and their unified digital market is a step in that direction.
I think applying traditional economics to this situation is wrong. Games are digital goods so beyond translation and maybe some regional censorship, there isn't much additional cost to sell at a discounted price in lower income countries. If anything, being able to sell the same product in lower countries would lower the cost in higher income countries.
Valve can't sell for a loss the same way ebay can't. Valve simply takes a percentage of the price everytime a game is bought, publishers are in complete control of the price they want to sell. Often, publishers will let Steam automatically set regional pricing based e.g. the American price though.
The way these publishers operate, they will simply set the price at the highest possible value to extract as much as money ad they can from those willing to spend 60+$. Those unwilling or incapable of spending that amount of money, will just buy the game later on a sale. Price skimming has only become more and more prevalent in PC gaming with steam being the "innovator" of frequent sales.
Welcome to capitalism achievement unlocked.
Congratulations, you have finally find out how corporations fuck with customers to juice them as much as legally possible of money for their executives and shareholders.