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.
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