It seems Valve and five publishers have attracted the attention of the EU, as they claim they're breaching EU competition rules. In particular, what the EU say they're doing goes against the "Regulation 2018/302" introduced on December 3rd last year.
The statement from the European Commission, available here, mentions that they've sent Statements of Objections to Valve and Bandai Namco, Capcom, Focus Home, Koch Media and ZeniMax.
The main concerns from the EU are these:
- Valve and the five PC video game publishers agreed, in breach of EU antitrust rules, to use geo-blocked activation keys to prevent cross-border sales, including in response to unsolicited consumer requests (so-called “passive sales”) of PC video games from several Member States (i.e. Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and in some cases Romania). This may have prevented consumers from buying cheaper games available in other Member States.
- Bandai Namco, Focus Home, Koch Media and ZeniMax, broke EU antitrust rules by including contractual export restrictions in their agreements with a number of distributors other than Valve. These distributors were prevented from selling the relevant PC video games outside the allocated territories, which could cover one or more Member States. These practices may have prevented consumers from purchasing and playing PC video games sold by these distributors either on physical media, such as DVDs or through downloads.
Valve just sent out a statement, here's what they said in full for those interested:
Earlier today, the European Commission ("EC") sent Statements of Objections ("SO") to Valve and five publishers in an investigation that it started in 2013. The EC alleges that the five publishers entered into agreements with their distributors that included geo-blocking provisions for PC games sold by the distributors, and that separately Valve entered into agreements with the same publishers that prevented consumers in the European Economic Area ("EEA") from purchasing PC games because of their location.
However, the EC's charges do not relate to the sale of PC games on Steam - Valve's PC gaming service. Instead the EC alleges that Valve enabled geo-blocking by providing Steam activation keys and - upon the publishers' request - locking those keys to particular territories ("region locks") within the EEA. Such keys allow a customer to activate and play a game on Steam when the user has purchased it from a third-party reseller. Valve provides Steam activation keys free of charge and does not receive any share of the purchase price when a game is sold by third-party resellers (such as a retailer or other online store).
The region locks only applied to a small number of game titles. Approximately just 3% of all games using Steam (and none of Valve's own games) at the time were subject to the contested region locks in the EEA. Valve believes that the EC's extension of liability to a platform provider in these circumstances is not supported by applicable law. Nonetheless, because of the EC's concerns, Valve actually turned off region locks within the EEA starting in 2015, unless those region locks were necessary for local legal requirements (such as German content laws) or geographic limits on where the Steam partner is licensed to distribute a game. The elimination of region locks will also mean that publishers will likely raise prices in less affluent regions to avoid price arbitrage. There are no costs involved in sending activation keys from one country to another and the activation key is all a user needs to activate and play a PC game.
Basically, the EU wants to prevent stores and publishers from making it so that you can't get your games cheaper if you choose to shop in a different country. It can be a pretty difficult topic, certainly one with a lot of complications. The issue gets complicated, since publishers may want to offer certain countries a cheaper price if their wages are traditionally lower but they might not do that if anyone is able to come along and just pay the cheaper price.
What are your thoughts on this?
Article taken from GamingOnLinux.com.
Some you may have missed, popular articles from the last month:
The comments on this article are closed.
Geo-blocking is BS, so for once the EU is in the right of it with their demands.
In Canada, the price for a game is the same across the country, whether you're in Ontario or the Yukon (barring GST/PST/HST differences, similar to VAT).
In the US, same deal - it doesn't matter what state you're in, the price of a game is the price of that game.
The article lists some EU member states in the Eurozone and some that aren't - sure, the requirement for currency exchange tends to mean there are winners and losers on the price difference... but isn't the point of the EU the whole 'single market' thing? So set the price of a game in Euro, let non-Eurozone-but-still-EU members buy it for whatever that converts to in their local currency, and otherwise treat the EU as a single 'country'.
I'd argue a step further and say games should just be priced globally in whatever the local currency of the developer/publisher is (e.g. Yen for Japanese games), and the rest of us pay whatever the equivalent of that is in our currency. The devs/publishers want to be paid in their own currency at the end of the day, right? If people are going to pirate it because they can't afford it, going to all the extra effort to get a pittance fraction of the cost from poorer regions just doesn't seem worth it.
But maybe it is, because the 'actual cost' is mostly fixed, and the reproduction/transmission cost of selling additional copies is next to nil (barring translations, etc.). So a game that sells for $60 in the US might still be worth translating and selling for the equivalent of $5 somewhere else. How much of that $60 is profit vs. the $5? What if the game was just... $20 everywhere in the world?
Global economics is hard. ;) But the internet is global. Artificial barriers will get broken, so it's a difficult proposition to figure out how to position your work so that poorer countries with weaker currencies could still afford and enjoy it, while not taking a chunk out of your earnings in wealthier nations. Maybe the 'cheaper' cost version is still enough to break even or make a little bit of money, and the 'wealthier' costing version is pure profit. Maybe the sales in wealthier countries subsidize the sales in poorer ones (though I doubt it - they'd just not bother offering it for sale in said countries then, right?).
I worry for smaller, Indie devs/publishers trying to get this right. I have no sympathy for the likes of EA/Ubisoft/Activision-Blizzard/etc., though, who abuse the crap out of their employees and give their execs multi million dollar salaries and bonuses.
In Canada, the price for a game is the same across the country, whether you're in Ontario or the Yukon (barring GST/PST/HST differences, similar to VAT).
In the US, same deal - it doesn't matter what state you're in, the price of a game is the price of that game.
The article lists some EU member states in the Eurozone and some that aren't - sure, the requirement for currency exchange tends to mean there are winners and losers on the price difference... but isn't the point of the EU the whole 'single market' thing? So set the price of a game in Euro, let non-Eurozone-but-still-EU members buy it for whatever that converts to in their local currency, and otherwise treat the EU as a single 'country'.
I'd argue a step further and say games should just be priced globally in whatever the local currency of the developer/publisher is (e.g. Yen for Japanese games), and the rest of us pay whatever the equivalent of that is in our currency. The devs/publishers want to be paid in their own currency at the end of the day, right? If people are going to pirate it because they can't afford it, going to all the extra effort to get a pittance fraction of the cost from poorer regions just doesn't seem worth it.
But maybe it is, because the 'actual cost' is mostly fixed, and the reproduction/transmission cost of selling additional copies is next to nil (barring translations, etc.). So a game that sells for $60 in the US might still be worth translating and selling for the equivalent of $5 somewhere else. How much of that $60 is profit vs. the $5? What if the game was just... $20 everywhere in the world?
Global economics is hard. ;) But the internet is global. Artificial barriers will get broken, so it's a difficult proposition to figure out how to position your work so that poorer countries with weaker currencies could still afford and enjoy it, while not taking a chunk out of your earnings in wealthier nations. Maybe the 'cheaper' cost version is still enough to break even or make a little bit of money, and the 'wealthier' costing version is pure profit. Maybe the sales in wealthier countries subsidize the sales in poorer ones (though I doubt it - they'd just not bother offering it for sale in said countries then, right?).
I worry for smaller, Indie devs/publishers trying to get this right. I have no sympathy for the likes of EA/Ubisoft/Activision-Blizzard/etc., though, who abuse the crap out of their employees and give their execs multi million dollar salaries and bonuses.
7 Likes, Who?
Would be nice if this lead to disabling the annoying geoblock for us germans (not regarding price but censorship)
11 Likes, Who?
I can say valve significantly decreased pirating in my country where games about six times more expensive.
EU choose to to go along with lobbyists and i am very disappointed at EU
since i don't really like EU and USA, i will keep searching other countries to settle on even its really hard to do so :(
P.S: EU was my choice settlement before article 13 :(( What a shame...
EU choose to to go along with lobbyists and i am very disappointed at EU
since i don't really like EU and USA, i will keep searching other countries to settle on even its really hard to do so :(
P.S: EU was my choice settlement before article 13 :(( What a shame...
7 Likes, Who?
Quoting: KithopGeo-blocking is BS, so for once the EU is in the right of it with their demands.
In Canada, the price for a game is the same across the country, whether you're in Ontario or the Yukon (barring GST/PST/HST differences, similar to VAT).
In the US, same deal - it doesn't matter what state you're in, the price of a game is the price of that game.
The article lists some EU member states in the Eurozone and some that aren't - sure, the requirement for currency exchange tends to mean there are winners and losers on the price difference... but isn't the point of the EU the whole 'single market' thing? So set the price of a game in Euro, let non-Eurozone-but-still-EU members buy it for whatever that converts to in their local currency, and otherwise treat the EU as a single 'country'.
I'd argue a step further and say games should just be priced globally in whatever the local currency of the developer/publisher is (e.g. Yen for Japanese games), and the rest of us pay whatever the equivalent of that is in our currency. The devs/publishers want to be paid in their own currency at the end of the day, right? If people are going to pirate it because they can't afford it, going to all the extra effort to get a pittance fraction of the cost from poorer regions just doesn't seem worth it.
But maybe it is, because the 'actual cost' is mostly fixed, and the reproduction/transmission cost of selling additional copies is next to nil (barring translations, etc.). So a game that sells for $60 in the US might still be worth translating and selling for the equivalent of $5 somewhere else. How much of that $60 is profit vs. the $5? What if the game was just... $20 everywhere in the world?
Global economics is hard. ;) But the internet is global. Artificial barriers will get broken, so it's a difficult proposition to figure out how to position your work so that poorer countries with weaker currencies could still afford and enjoy it, while not taking a chunk out of your earnings in wealthier nations. Maybe the 'cheaper' cost version is still enough to break even or make a little bit of money, and the 'wealthier' costing version is pure profit. Maybe the sales in wealthier countries subsidize the sales in poorer ones (though I doubt it - they'd just not bother offering it for sale in said countries then, right?).
I worry for smaller, Indie devs/publishers trying to get this right. I have no sympathy for the likes of EA/Ubisoft/Activision-Blizzard/etc., though, who abuse the crap out of their employees and give their execs multi million dollar salaries and bonuses.
It's the fact that they sell it for a "pittance" from the point of view of developed countries, that has turned developing countries from nations full of software copyright infringers into millions of paying consumers. Even without translating games into the less spoken languages.
Setting the price globally to 20 USD (or its equivalent in local currency), for example, would just make the company lose potential profit or even incur loss on developed nations while selling nothing on developing countries.
8 Likes, Who?
Wait... the EU has concluded that Valve et al are in breach of a regulation it introduced in December 2018 with a policy last used in 2015?
It certainly sounds like the EU all right, but surely I'm missing something here?
It certainly sounds like the EU all right, but surely I'm missing something here?
0 Likes
Hmmmm... I may be wrong (and perhaps misunderstand some comments posted above) but I don't think that this is related to Valve's regional pricing policy (i.e. it has nothing to do with the fact that games on Steam are cheaper in EU member states that are not in Eurozone, which has generally the highest price looking at Steamdb data). :|
1 Likes, Who?
Quoting: KithopGeo-blocking is BS, so for once the EU is in the right of it with their demands.
I'd argue a step further and say games should just be priced globally in whatever the local currency of the developer/publisher is (e.g. Yen for Japanese games), and the rest of us pay whatever the equivalent of that is in our currency. The devs/publishers want to be paid in their own currency at the end of the day, right? If people are going to pirate it because they can't afford it, going to all the extra effort to get a pittance fraction of the cost from poorer regions just doesn't seem worth it.
But maybe it is, because the 'actual cost' is mostly fixed, and the reproduction/transmission cost of selling additional copies is next to nil (barring translations, etc.). So a game that sells for $60 in the US might still be worth translating and selling for the equivalent of $5 somewhere else. How much of that $60 is profit vs. the $5? What if the game was just... $20 everywhere in the world?
Global economics is hard. ;) But the internet is global. Artificial barriers will get broken, so it's a difficult proposition to figure out how to position your work so that poorer countries with weaker currencies could still afford and enjoy it, while not taking a chunk out of your earnings in wealthier nations. Maybe the 'cheaper' cost version is still enough to break even or make a little bit of money, and the 'wealthier' costing version is pure profit. Maybe the sales in wealthier countries subsidize the sales in poorer ones (though I doubt it - they'd just not bother offering it for sale in said countries then, right?).
I worry for smaller, Indie devs/publishers trying to get this right. I have no sympathy for the likes of EA/Ubisoft/Activision-Blizzard/etc., though, who abuse the crap out of their employees and give their execs multi million dollar salaries and bonuses.
I don't think you understand the difference that is regional pricing around the world, and how much impact it made on improving the amount of legal games sold in places like Brazil. $20 rigth now is equivalent to R$80-R$100 in the local currency, but the way our economy is it can change 20% this afternoon. It would rend events like sales impossible. A product can have 15% of discount and be more expensive than it was the day before the discount came.
2 Likes, Who?
Quoting: GuestGames are not cheaper in EU member countries that are not in the eurozone - that's the problem, the *lack* of sufficient regional pricing.
Sorry, you're right (read steamdb data far too quickly)! In which currency peoples from countries that are EU members but not in Eurozone buy their games on Steam? :|
Last edited by riusma on 5 April 2019 at 5:43 pm UTC
0 Likes
The issue is complicated. Regional pricing is an absolute necessity in many places; not having it can be effectively "not available in this region". The technical measures used to implement it, however, are basically DRM, and thus have serious implications.
In this case in particular, I kind of agree the point the EU is making. Within the EU, there shouldn't be limitations on "exporting" games, even if this affects the ability to offer a "more fair price". Also, many countries already use the same currency, which is one less concern (exchange rates rarely reflect purchasing power, but besides that it can fluctuate a lot which is a big problem). But I hope that Valve can figure out a better solution so that people in those countries aren't screwed by a corner case of international trade deals... since it apparently only affects key reselling, perhaps by limiting their policy in issuing keys they could keep the fair prices for purchases in the actual store?
Of course, ideally we could have a single price worldwide and no trade restrictions. But first we would need to figure out how to solve all the inequality in the world. The idea that you could just price a product in dollars and sell it worldwide is naive at best.
In this case in particular, I kind of agree the point the EU is making. Within the EU, there shouldn't be limitations on "exporting" games, even if this affects the ability to offer a "more fair price". Also, many countries already use the same currency, which is one less concern (exchange rates rarely reflect purchasing power, but besides that it can fluctuate a lot which is a big problem). But I hope that Valve can figure out a better solution so that people in those countries aren't screwed by a corner case of international trade deals... since it apparently only affects key reselling, perhaps by limiting their policy in issuing keys they could keep the fair prices for purchases in the actual store?
Of course, ideally we could have a single price worldwide and no trade restrictions. But first we would need to figure out how to solve all the inequality in the world. The idea that you could just price a product in dollars and sell it worldwide is naive at best.
5 Likes, Who?
(I think that the best answer is @Aeder one, but I'll try to contribute with some technical words)
This is software and the marginal cost tends to be zero. So, publishers can sell at lower price in poorer countries by the fact that they should only care the maximize the function sell-price * sales-count on each country. In other words, the price you get for software is not linearly related with the cost of development but with how much the people in your area is able to pay for it.
Quoting: KithopBut maybe it is, because the 'actual cost' is mostly fixed, and the reproduction/transmission cost of selling additional copies is next to nil (barring translations, etc.). So a game that sells for $60 in the US might still be worth translating and selling for the equivalent of $5 somewhere else. How much of that $60 is profit vs. the $5? What if the game was just... $20 everywhere in the world?
This is software and the marginal cost tends to be zero. So, publishers can sell at lower price in poorer countries by the fact that they should only care the maximize the function sell-price * sales-count on each country. In other words, the price you get for software is not linearly related with the cost of development but with how much the people in your area is able to pay for it.
3 Likes, Who?
Patreon
PayPal
See more from me