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[Fast Jimmy]

Last week, we learned that Bioware was planning on not releasing a Day One DLC Companion for DA:I for the first time since Mass Effect in 2008. Although Bioware had previously released the Day One companion for "free" in progressively more "strings attached" methods, ME3 saw the first example of them charging full price for the DLC companion outside of the very limited supply of Collector's Editions.

To see Bioware depart from this method is rather surprising, honeslty. They had truly built up the expectation from their fanbase that this would, in fact, be a standard practice for them, to the point where there would likely have been much smaller outcry to use the ME3 model again. Or, at the very least, to help secure pre-orders or even newly purchased copies.

So for the team to not include any companion at all is very interesting development. It likely stems out of the "From Ashes" complaints of ME3, yet there could also be logistical concerns - incorporating DLC companions into the main story too much and it becomes a liability. Too little and it becomes simply another bot you rotate in for combat, being little else to the table. Not to mention the thorny nature of future content and imports and the decision of whether or not enough base players were given the exposure to the character to justify more resources being allocated to them in future titles...


This, of course, leads to the next logical question - will there still be Day One DLC? One can only assume that since the announcement seemed to single out companion D1DLC as being off the table, it leaves, by almost conspicuous omission, non-companion D1DLC as an option. Will it be self-contained content, like what was seen with Return to Ostagar or Leviathan? Will it have temporary companions, like Omega or Mark of the Assassin? Or will Bioware avoid story content altogether, and release only weapons/equipment packs as DLC to start out?

What does everyone think about this new piece of information?

[Allan Schumacher]

If we hadn't had the time extension, there would have been a greater chance that we'd have had Day One DLC.  Pushing things back a year let us bring more stuff we wanted into the game, into the core game.

[Allan Schumacher]

Love it! I gotta say I'm not a fan of non-free DLC ...A more complete core game is way better!

 

There's still stuff that doesn't make the cut, and by virtue of it already receiving a non-zero amount of work, makes it a consideration for expanding the game via DLC.

 

I like DLC for trying more experimental type stuff.

[Allan Schumacher]

I'd prefer to not get into a discussion about perception on this part of the board, as it's kind of a can of worms on its own, and I'm personally fighting the urge to take the thread further off topic by debating it further myself.

 

If we wanted to discuss that notion in more detail, feel free to start up a thread in off topic (and feel free to link it here when it's up, if one feels it is relevant).

[Allan Schumacher]

Then to the actual response. I cannot state enough how much I dislike the perception argument as it essentially, at least when I see it thrown around, that the actual facts don't matter, only the perception of the loudest complainers does. The reason I dislike it isn't because it doesn't have a point or sense to it, we act based on our perceptions after all, but that it never actually addresses how such misunderstandings could corrected or avoided. Instead it argues that because of wrong perception of things, Bioware should mainly listen to those who refuse to accept their explanations on the matter or the several points made for it because they are convinced that it is all a lie, despite actually never really being able to prove it, even if this causes those who understand or accept to lose something they were willing to pay more for. The argument never leads to anything constructive, anything that can be improved upon, instead it just pushes for things to be taken away.

 

There will be less content available at release as a result of this decision, which is going to be unfortunate for those that are okay with it.

 

Now, having said that, DLC in and of itself is still relatively new and while I will agree that because a voice is loud doesn't mean that it's large (nor does it mean that it's not large), experimentation is going to happen.  If we spend the time that would've gone towards a Day One DLC on something that is a bit larger for our first DLC (whenever that is), maybe that ends up being more ideal?  If it's something where we look and go "whoa, our sales sure are lower and this wasn't worth the effort" then we'll have to look more deeply.  It'd probably end up coming into the muddy area of determining how much good will is compromised because of those that are anti-day one DLC, compared to those that are okay with Day One DLC but have moved on before picking up other DLC.

 

I'm sure it'll be complicated to filter through all this, so I'm kind of hoping it's ostensibly superior/inferior just to keep it simple.

[Allan Schumacher]

I'm not sure this sort of question is actually subject to rational analysis. You're never going to have a case of two identical games with different DLC policies, and there aren't enough games released to let the differences average out. There are a lot of business problems like this, IIRC.

 

It certainly is tricky, which is why I'm not going to complain that I have to determine it.

 

I'd love to have alternative universes for me to do experiments with

[Allan Schumacher]

For better or worse I think it's also just price discrimination.  While for the life of me I don't know why Australia's games are more expensive, the idea that "the price should be the same everywhere" need not apply.  I think it's fair to price it accordingly for a particular region, in large part because this type of price discrimination can make the software more readily available in poorer regions where even $50-$60 is completely untenable.

 

World of Warcraft does this with China, from what I understand.  Though, perhaps paradoxically, I wonder if there's hesitation to do stuff like this beyond simply infrastructure because people could simply circumvent regional pricing by finding a way to exploit a much lower price from a different region that is poorer.  Might be a situation where those people just have to wait for the price to drop which is a bit unfortunately for them.

[Allan Schumacher]

Variable pricing, in my experience, does not belong in digitally distributed products.

 

Isn't this a privileged perspective, though?  You're effectively saying that people in poorer countries shouldn't have access to the game.  The only way to mandate what you are asking for is to actively deny other people from getting the goods that you want.

 

 

 

 

After all, we aren't talking about adding international shipping costs, or any extra resources being involved. It is a purely digital transaction. If my IP address registered as Australian instead of North American, that is little reason why a product should cost more or less to download.

 

Depending on your economical perspectives, the cost of something is precisely what the user is willing to pay for it.  I'm not a fan of either the intrinsic theory of value or the cost of production theory of value.  If Sylvius wants to pay $100 for a game that I think is worth $40, then it's clear we subjectively value the game differently.  Software already has implemented price discrimination in various ways, even when it's a physical good.  It happens with big things like automobiles too.  They can sell me something at higher value, even if it's made next door, simply because I am capable (and willing) to pay for it at that price.

Modifié par Allan Schumacher, 03 avril 2014 - 08:51 .
Edited to say "even when it's a physical good"

[Allan Schumacher]

I think we may be taking this down to two different paths of the situation. While I do think your suggestion of having the ability to reduce the price of a game for region is good, I'd also wager it is not often utilized and would be the smaller of two problems.

 

Is this the way it actually is, or is it a perception chosen by yourself?  On what basis are you wagering its level of utilization?

 

On a personal level I'd much rather stuff like Price Discrimination be used as a means to counter piracy, rather than simply never making the product available at a price that is possible.

 

 

For instance, you stated that Blizzard sold reduced price copies of WoW to Chinese players. That's very cool. But the game is a subscription based game... so did they get their accounts for free? Or did Blizzard have a very real chance of making that money back over the course of the next few years? I don't know the details, but I also have not really heard of regions getting discounts below the MSRP very often, if at all.

 

Note: I never said Blizzard sold reduced price copies of WoW.  The subscription cost of WoW in China is cheaper than it is in North America (and it's actually licensed out, so the final cut Blizzard gets per user is much less than they get from North America/Europe).  To be clear: Chinese players literally pay less to play the game than North American users do.

 

 

 

I get that... but that's not really the issue at hand. Steam sells games. They are the same price for everyone. It isn't a Kickstarter campaign where we can go in at different pledge levels and still get the same game end product, but a straight transactional interaction. You can't go into Wal-Mart and say "this vacuum cleaner is worth only $60 to me" and expect to buy it if $60 is less than the price tag.

 

 

It seems my point wasn't clear.  I was talking about theories of value, and if you're going with a "it costs this much to make, so it should cost this much to sell" then you're applying the production costs theory of value, which is an objective measurement (the cost of a product is determined by the cost to make the product).  I pointed out the example with Sylvius and I because it demonstrates that value is subjective.  You're right, I can't say "This vacuum cleaner isn't worth $60 to me" and pay less very often.  But you and I are capable of paying $50 for a video game at release.  For some parts of the world, that just isn't possible.  To mandate that developers must sell their digital goods at the same price everywhere, you mandate that poorer countries of the world are denied products by which supply and shipping should cause no issues.

 

 

In an idealized world, people will pay what they feel the product is worth, meaning that if BG2 were to come out, there'd be no price tag and Sylvius would just pay his $100 (or whatever he values the game at).  But the world isn't ideal, so prices get set.  And as an anecdote, I have chosen to change how I look at purchasing digital games.  I set a price (which can fluctuate) for a product, and if the price ever drops below that I will pick it up.  This means that I am getting more value for my dollar.  It also means that if the price drops even more the very next day, I don't get upset, because I still purchased a product at a value I consider to be fair.

 

Price discrimination already occurs on some level, in that the price of games go down to take advantage of price elasticity (which goes up as people buy the product at a particular price point).  It's already been used for packaged software around the world.

 

Now... there's very valid reasons why that vacuum cleaner might not be the same price in North America as it is in Norway or Australia. If it is manufactured and distributed closer to these countries than NA, it might cost less to ship it, or there may be local partnerships that offer discounts to retailers that they pass onto the consumer. There may be mail-in rebates only available in certain countries. The overall market demand for vacuums may be higher in one area versus another, causing natural market fluctuation.

 

 

No, I am saying that literally the list price of the exact same product in a foreign country can often be lower, even though the cost to distribute the product is higher due to shipping, because it's priced at a level that the product can still be sold at a profit.  This would work very well for software since the price of packaging and distribution is much smaller than something like an automobile (and yes, car manufacturers employ price discrimination.  So do computer manufacturers, and so forth.  Someone in the Philippines pays less for the same computer I have simply because it's priced in accordance with their economic reality).

 

 

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But online, in a digital transaction, all of that disappears. It's not like there is a limited supply of games, that they have to transfer them through freight or that the cost to assemble the digital download depends on region-specific resources... it's just a digital piece of property. None of the normal factors that would affect price variance come into play.

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As a piece if digital property, it has the greatest potential for price discrimination.  It's why pirates in Asia and Russia can undercut prices on software so much.  If you start selling the software at a price point that is acceptable for the region, you start making some money instead of no money. 

 

 

 

If a developer sells a game via Steam, they don't have a separate price request if they happen to sell a copy in Papua New Guinea or San Marcos... the price is the price. Now, regional laws/regulations may cause Steam to raise the price to be compliant, but it isn't a matter where Steam takes the GDP of every country and adjusts the price based on currency strength and median income... they charge what the developer tells them to charge, plus tax and other regulatory fees that are country specific.

If a developer wants to change the price for Papua New Guinea, I'm sure they could, if they worked it out through Steam. However, I don't think Steam, as a standard, should take region into consideration unless they are legally required to do so... and at which time I think it would be wise of them to show the gamer how much their local government is adding to their charge in said transaction.

 

I'm pretty sure Steam already allows developers to set unique prices for different regions (what the prices get set at, however, is a collaborative process between the developers and Valve).  So yes, assuming Papua New Guinea was set up as a valid region, it can sell the product at a different price point.  Steam recently added support for developers to enable a restriction to prevent cross region gifting.  http://www.rockpaper...region-gifting/

 

Steam also recently added the ability for developers to set up sales whenever they want.

[Allan Schumacher]

I don't think you can discount price elasticity either, however.

 

A real world application of price discrimination, as well as possible circumventing and possible pros/cons of it and how people behave around it.

 

http://www.innovatio...post-kirtsaeng/

 

 

I tend to be in favour of it, as I don't have any issues paying more compared to other places as long as I am getting value for my dollar.  The issue I find with circumventing it is that in a lot of cases (i.e. not involving Australia's oddness) it represents a systematic lack of accessibility for something on a basis that I am not entirely comfortable with (a region simply being poorer than ours).

 

 

Even then, I don't know if it's necessarily poverty, but just the reality that different regions have different demands for particular goods.  Though the global economy (as shown in the above link) can compromise this for potentially negative consequences for the foreign markets.

 

I think it'd be interesting if perfect price discrimination were possible.  I'd be very curious to analyze how buyers behave in an environment like that (and I couldn't say for certain if it'd be preferred).

[Allan Schumacher]

I agree with this, but I do understand the perspective that selling digital goods at different prices creates some DRM difficulties.  For example, as a Canadian, I know how useful it is to have a US IP address at least some of the time.

 

The irony about DRM is that it's a situation where a subset of people self-sabotage the entire group based on their own selfishness (if people didn't buy to import/resell out of region DVDs, there'd be no need to have region encoding on DVDs and the expense of creating and adding it onto DVDs could be dropped).  I think it's an example of the Tragedy of the Commons economic theory.

 

It's not just an issue with digital goods either.  You may not have read it quite yet, but the link I posted shows that people taking advantage of price discrimination for textbooks can undermine a region's accessibility to those textbooks.  So now that region (and maybe others) will get inferior goods (whether it be inferior textbooks, or unwanted additions via DRM implementations that have been added to them) because a subset of people tried to take advantage of the situation.

[Allan Schumacher]

Due to economic policies (mainly blatant currency manipulation) China's wages are lower than they should be, but due to the articial nature of the manipulation, this affects purchases made within the country much less than it does purchases made OUTSIDE the country.

 

A lot of countries deal with currency manipulation.  It's in Canada's best interests to not increase the value of its dollar relative to the US dollar because doing so would make exports unlikely.  You're describing international economic policy.

 

 

 

An average citizen of Shanghai probably would pay through the nose for a $60 video game, given the currency exchange. However, they would have little trouble according an apartment, clothes, a mobile phone, Internet, a nice computer and even a car, as long as they were all sold and (for the most part) made in China.

 

This is not uncommon throughout the world.  In general I, personally, am not too affected by the Canadian dollar fluctuating.  But I agree, paying for an imported $60 video game would be prohibitively expensive.  Price discrimination would allow more people in the market to purchase games, leveraging price elasticity to increase your revenues and profits.  If Steam were available in China, it'd be pointless to sell the games at roughly $60.

 

 

 

 

Some of the largest MMO playing populations in the world are in China and South Korea. So unless Blizzard specifically singled out low income, rural workers for the reduced rate, I'd wager they were angling to get a foothold against some of the large Asian MMOs in the market rather than try and spread the wonderful light that is the WoW experience. If a similar initiative was launched in sub-Saharan Africa, or practically any part of Central America except Brazil, I'd change my tune. But China has more online players than Canada. To say they would need charity MMO games sounds more like a marketing attempt by Blizzard than the actual reality.

 

For sure.  I'm not saying that they need charity, and this is NOT a marketing attempt by Blizzard.  Blizzard doesn't advertise this.  It's just the reality of the situation: World of Warcraft is cheaper to play in China.  The reason for this is likely because the company that licenses the game concludes "We'll make more money putting it at this price point."  At no point have I ever considered price discrimination to be charity.  It's all about pricing your goods at a price that the market is willing to pay for it.

 

 

I have no issue if someone in Malaysia can get their video game (or any other good) at a lower price than what I would pay, because our economic realities are different.  It's not charity, it'd just be a game developer finding a way to make more money.

 

Which is why I don't agree with the mandate that a digital good like a video game must be sold globally at the same price.  I understand that tragedy of the commons will likely make it necessary, but I think that's just selfish.  In this sense, markets are actively denied the product when they wouldn't need to be.  I consider this bad for the consumers and developers.  Developers because it mandates that projects must be riskier than they need to be, since avenues of revenue are removed.  Consumers because developers will be more risk averse than they would need to be, assuming they're not outright denied the game in the first place.

 

 

But price discrimination is not charity, it's simply about incentivising purchases by leveraging price elasticity for a particular group.  It's what brings about things like student and seniors discounts.  But I'm under no illusions that companies do it for any other reason than to make more money.

[Allan Schumacher]

Tragedy of the commons? I think it's more of a fairness issue. If someone from a different country just as prosperous as yours has to pay significantly less for the same good, this can legitimately be perceived as unfair. The mark-up is perceived as wilful exploitation, and, as I see it, region encoding is a means to ensure that this wilful exploitation can continue. So I don't have the least bit of a qualm about circumventing this.

 

I'm not referring to Australia (which I already conceded is a situation that defies understanding).  And I'm certainly not referring to places of equivalent prosperity.  At the same time, I'm also of the opinion that if it's unfair, I don't buy it.  And yes, this means that I don't acquire things that I otherwise probably would.  But that may be my privilege speaking since I the things I really want I don't consider unfair.  I'm more talking about places in Asia, however, where DVDs are sold at retail at much cheaper than they are in the United States.  Because people do stuff like that, DRM gets created, which is why I mentioned Tragedy of the Commons, because it's the act of some selfish people looking to acquire stuff for their own benefit, which creates a situation that ends up being bad for all.

 

If you look at the link that I provided earlier, there were textbooks that are sold in the Philippines at a cheaper rate.  Someone noticed this, and started buying them to ship over to the US so resell for profit.  In effect, the textbook creator was now competing with itself.  As a result, now people in the Philippines now get either much more expensive textbooks, or lesser quality textbooks, as measures to ensure that people don't do this.  I'm not keen on citing fairness as a reason that these actions can be done, because I don't see it as particularly fair to people in the Philippines that now face increased financial hardship in pursuing an education in a situation where their financial situation is not like the one in North America.

[Allan Schumacher]

@Allan:

All right, I concede the point in your textbook example and comparable cases. As for "don't buy it if you think the price is unfair", it's not as easy as that. In fact, video games are more expensive in my country than in the US, basically the same price in Euros a US customer pays in dollars. I can easily afford the games at that price and I do think they're adequately priced in an absolute sense, but the mere fact that US customers - from another prosperous "first-world" country - get their games cheaper just because the general perception of a fair price is different there comes across as unfair to me, and preventing me from exploiting such a price difference - which international corporations do on a much bigger scale every day - comes across as legalized profiteering.

 

I'll agree it's not fair, but the Capitalist in me would need to examine how sales work in Europe and Australia.  Do the games still actually typically sell well, in high volume, at those particular higher prices?

[Allan Schumacher]

Oh, great... now someone's going to figure out that they can get away with doubling game prices in the US. 

 

Well, define "get away with."  It's probably not popular, but if games were sold at $100 in the US and the sales numbers for all games didn't change in any capacity, then I think it's safe to say that the box price of games was low.  Though I would expect a price jump like that to have pretty significant effects as gaming is ultimately a luxury good so it will have greater price elasticity.

 

Though I find that economies of scale have come into play here.  For my NES, games tended to be $60 or $70, but now most games are $50 to $60.  So in the span of almost 30 years, the cost of a game (adjusted for inflation) has decreased.  But the number of gamers has also gone up a lot, so a lot of them didn't grow up with $70 games.

 

 

 

I don't have sales figures, but my impression is that sales wouldn't drastically increase by lowering the price to the US equivalent. Also, the advent of digital distribution and less games censorship means that gray imports are increasingly not worth the effort. That's just how things go, though, and I don't have a problem with it. However, I find it not acceptable when corporations use technical means in order to prevent me from - legitimately, as I see it - exploiting price differences in cases where I think it's worth the effort. The day I'll accept this will be the day when corporations and banks agree to finance market regulations that prevent *them* from doing the same.

 

That's unfortunate about the elasticity.  It is true that consumers as a whole do not act as a single voice, and as such they are divided in their efforts.  I've often wondered how Australia would do if all gamers decided to not buy games until the prices dropped to $60.  I'm also curious if the cost is kept there simply because "well if they buy it at that price, more money for us.  If they circumvent and get it at $60, that's acceptable."

 

I suppose, upon reflection, it's fair to say I'm talking about an ideal.  This is what I sort of mean by tragedy of the commons, because places like South America and Asia actually consume a lot of games (Russia too I think), but the piracy market is so prevalent there that the only way to sell legitimate copies is to price them much lower.  Part of the reason for piracy is that the games are so expensive.

 

So while I think it'd be great if price point parity could be exercised between regions of different prosperity, you're always going to get people that circumvent it or say it's unfair, which will cause the content creators (often big corporations with greater lobby power) to want to curtail it.  The only other alternative is to not sell it in those regions, which is where the tragedy part comes in.  Because while I find the ability to charge different prices to be a strength of digital distribution, the digital nature of it means that you or I will find it much more likely that we'll "think it's worth the effort" to take advantage of purchasing from other regions because it's cheaper.

But yes, big corporations and banks are pretty exploitative themselves.