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Potential Significant Price Hikes on Steam Coming to Several Countries!

In some countries, the recommended price increase is in the triple digits (because Steam has made a proposal rather than a mandatory change to regional pricing), making games much more expensive in many places outside the US.

 

Steam currently supports thirty-nine currencies, which is challenging for developers to keep track of. The positive side of regional pricing is that, for example, in Argentina (where there was essentially hyperinflation between 1998 and 2002), games are cheaper and more affordable for people living there. However, according to Valve’s announcement, the pricing proposal, adjusted to the US dollar, has been modified for other currencies and has pushed prices upwards to avoid developers having to deal with the conversion.

“We think it’s a helpful guide, but with purchasing power and foreign exchange rates constantly evolving, we needed to make significant changes to those conversion recommendations to stay current. We’re also committing to keeping this guide as valuable as possible by establishing a more regular cadence to review prices. We’ll take a close look at these recommendations on an annual basis and make adjustments accordingly,” Valve wrote.

So far, so good. However, SteamDB has reported some pretty painful price increases. For a $60 game, the Turkish lira price has gone from 92 to 510, an increase of 454%. The Argentine peso jumped from 649 to 3800, an increase of 485%. The proposal for the Russian ruble was 75%, the Indian rupee 80%, the Kazakhstani tenge 97%, the Polish zloty 28%, and even the Canadian dollar received a 13% price increase. And there will undoubtedly be those who follow Valve’s plan to the letter and push up prices by that much. The eurozone is also affected: the price increase for the euro will push it from €50 to €59, which is an 18% increase.

However, the Turkish and Argentinean price increases seem to be aimed at games that were bought cheaply due to the region change trick. Motion Twin, for example, raised the price of Dead Cells in these two countries with the following explanation: “A significant portion of sales in the last year came from these two countries, without a corresponding increase in players there. The percent of our total sales from a given country will roughly equal the percent of our total players. For Argentina & Turkey, their percentage of total sales is 3-4X the amount of the percent of their total players. By no coincidence, the Dead Cells and DLC prices in these two countries are by far the lowest in dollar/euro terms, so people are likely changing their region to take advantage of a 70-90% reduction in price.”

Steam has also amended the relevant Steamworks page: “It’s tempting to treat pricing as a simple problem of foreign exchange rates and tie each currency’s price equivalency to the exchange rate. But that kind of strategy vastly oversimplifies the disparate economic circumstances from one territory to another. And while exchange rates have macroeconomic consequences, they generally don’t have short-term impacts on an individual consumer’s purchasing. Rather than just pegging prices to foreign exchange rates, our process for price suggestions goes deeper into the nuts and bolts of what players pay for the goods and services in their lives. This includes purchasing-power parity and consumer price indexes, which help compare prices and costs more broadly across various economic sectors. But in the case of games on Steam, we also drill down more specifically to entertainment purchasing to better inform those decisions. All of these factors have driven us towards the commitment to refresh these price suggestions on a much more regular cadence to keep pace with economic changes over time.”

After the price increases, 3,800 Argentine pesos are about $24.5, while 510 Turkish lira are $27.4. That’s still half the US price, but there is a significant difference in living standards and incomes. It is true that with price increases, there will be less switching between regions, but in return for the loss of tricky sales, local non-cheating players will be less willing to buy (because they may not have the money), so in the longer term, developers may lose sales. The tiny region changer money is also money.

On Reddit, SchrodingerSemicolon wrote that the Resident Evil 4 Remake was 25% more expensive than the new price even before the price increase proposal, and FIFA 22 was double the price by default. According to him, it is all about raising the price of games following the previous pricing, while an Indonesian commenter, arhcerwartune, said he saw a 30-73% price increase on games in the $10-30 indie price range. He understands that there is inflation in the world, but he thinks this move is a thwart to regional pricing.

It’s hard to argue with that.

Source: PCGamer

 

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