Following my recent article, Steam Loses Patience With The Argentine Economy, I was browsing through Steam for bargains and new releases when I came across Gears 5, a AAA game which is due for release on 9th September with a base price of US$60. Now, what is a base price, I hear you ask?
What Is Steam Regional Pricing?
Steam began regional pricing some five to six years ago if I’m not mistaken and the base price I just referred to is what regional world prices are based on. Gears 5 is a good example as it’s on pre-purchase, but the price varies from one region to another, allegedly calculated on a world standard of living index algorithm, which I’m not privy to. What is clear though is that Steam doesn’t set the prices, but leaves it to the publishers as far as I understand. However, those regional prices don’t seem to follow the mysterious algorithm and world index in a uniform fashion and this has got many gamers –mainly Argentines I have to say– moaning about the high prices being quoted in local currency. Because of this regional policy, prices for games on Steam swing wildly from the sublime to the ridiculous, depending upon your point of view, so some whining is probably acceptable up to a point. But asking for an 85% discount a on a new AAA game is redefining the meaning of entitled crybaby, in my opinion, but I’ll get back to the nuts and bolts on that little detail later on.
For the sake of argument, let’s assume that prices are based on a world standard of living index, many of which report different figures. I picked on one which uses the USA as a base figure, which is World Data.info. For a more European angle, please see List of European countries by average wage map.
The calculated purchasing power index is again based on a value of 100 for the United States. If it is higher, people can afford more based on the cost of living in relation to income. If it is lower, so the population is less wealthy.
Argentina, unsurprisingly, is way down on the list, but keep an eye on South Korea at number 25.
Of course, all this is a wild assumption that the above figures are used to calculate Steam’s prices, so for a very crude comparison, I hopped over to Steam DB, which is a live database on all Steam games regionally and discovered that the correlation is tenuous, to say the least. Again, keep an eye on South Korea pricing in the following Steam DB price list for Gears 5.
Note the base price of $59.99 and the fact that South Korea is 25th in the standard of living index, whereas Argentina stands at 57. However, the price quoted for Gears 5 is actually cheaper in South Korea, a country listed as having greater purchasing power. To qualify this, it’s said that Steam’s regional pricing reflects the purchasing power of each region, but the price for this game doesn’t back up that argument at all. On the other hand, games such as Hitman 2 Gold Edition and the much-hyped 2020 release, Cyberpunk 2077, do indeed reflect some of the factors in the standard of living index. Here’s the Hitman 2 price list.
How Does Steam Set The Prices?
Essentially, Valve offers developers an almost unworkable choice, and then tells them they have the freedom to do whatever they like. If they don’t want their games to be massively discounted in other territories, they do technically have the freedom to spend hours of their time every week checking 40 different exchange rates and manually adjusting 40 different prices. Or they can leave it alone, trust Valve to handle it for them and deal with the consequences. Source: Polygon
Before you fall asleep with all these graphs and numbers being bandied about, I’m not an economist and I can only conclude that game publishers set these prices, not Steam. It’s also worth noting that Russia and Turkey consistently benefit from whatever criteria are being used since those two countries are always at the top of the list for being the cheapest. And therein lies the rub– many people are complaining to Steam that the prices are unfair, but on the whole, they do follow some kind of pattern, with some publishers bucking that trend.
In the case of Gears 5, which is published by Xbox Game Studios, a Microsoft company, the figures are indeed somewhat skewed and based on prices for other games, there doesn’t seem to be any discernible reason for this discrepancy. On the other hand, it’s only recently (May 2019) that Microsoft announced that more of its games were heading over to Steam and Gears 5 is one of the first. But this doesn’t explain why a brand new AAA game is being sold in Russia for $16.44, but in Argentina for $53.61. However, for Argentine gamers to insist on an $11 price tag, is rather taking advantage of this anomaly and my advice to them would be to take their whining directly to Microsoft rather than bleating on Steam. It’s true that both Russia and Turkey have average monthly wages of around $484 and $455 respectively, with figures for Argentina either not being available or when they are, being unreliable.
The question is: should gamers demand fairer treatment when they live in a low-income country and are being charged more than double of what a similar country is being charged for games on Steam? Or should they simply stop crying in their respective beers and just pay the asking price?
(Ed note: For those who have not yet looked up the word “whinging”, it is a British equivalent to “whining”. I had to look it up because I thought it might be a typo. Live and learn…)