EC sends Statements of Objections to Valve and five publishers on “geo-blocking”

Companies can get away with price differences for physical goods, for a bunch of obvious reasons which don't apply to digital goods.

Charge different prices for a downloadable digital good and allow customers to shop around, and you have a de-facto one price for everyone scheme: the lowest price of all the regions.

If someone voluntarily pays a "France" price rather than an "Estonia" price, you could achieve the same thing by setting up a pay-what-you-want cart with the Estonia price as the minimum. There are many sales tricks that can be used to persuade people to pay more (up to their willingness to pay), that would cost you nothing or next-to-nothing, to get more money out of customers even if they are only required to pay the Estonia price.

Imagine that based on local income a digital product that has virtually no marginal cost is $25 in one market and $50 in another for whatever currency you please.

If someone in market B can by clicking over to a different storefront for market A then logically the vendor will no longer offer the good at the lessor rate in market A.

They will have to figure out what price maximizes revenue in both and it will surely disadvantage buyers in market A because the vendor gains as much for one market B buyer as two market A buyers.

If 40% of your buyers are from poor land then losing every one of them is as costly as dropping richland users prices by 1/3.

What if the vendor offered coupons available only locally to make it more feasible to differentiate prices while keeping stuff portable?

The reason why people in Iowa don't pay the same price than in Cali is because it is impractical, and possibly even prevented by some regulations, to buy the car in Iowa and drive it to California.

With digital downloads, and even physical games, that's not the case: I can buy my game in Czech Republic and have it mailed to Denmark (to stick with the example someone else posted) with minimal friction.

Regardless of what the MPAA would have you believe, digital products and cars are a bit different.

For practical purposes You capture the most at launch and progressively discount over time capturing the most revenue by forcing those who want the game closer to launch to pay more. In theory you lose some buyers who prefer to have a competitors product right now but 60 50 30 30 is still better than 25 x 5.

I don't think Steam ever had lower prices for some EU countries, I am from Romania and the prices on Steam were always high. I could not find any source to confirm this but I think that all EU countries have same prices and it is not a recent thing.

It's actually worse than that if you look at median equivalised net income: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_...

Remember that Norway and Switzerland are part of the EEA, so geoblocking affects them too. Although I am somewhat skeptical of those lower numbers, but the difference is there.

Maybe not in EU but is used for CIS countries and other regions, and it is not just currency conversion.

I heard people buy those cheaper games and activate using VPN which will be dealt with sooner or later I suppose. If you really really stretch it, can go as far as tax evasion I suppose as you virtually "import" a good into EU and don't pay VAT which you are supposed to pay here but no in other regions.

Say you have 5 workers making 10 units of value each year. The cost of a product is 1 unit of value but you spent 100 units getting set up to sell said product, designing it and so forth.

In theory if you want default on all your bills and go live in the woods you can afford to always sell your product at 1 or 2 units until you go out of business but in reality you are out 150 units before you start.

So in insert rich market you sell 30 units at 5 units each

in not so rich market you sell 20 units at 4 units each

in poor market you sell 20 units at 2 units each.

You come out with 200 units or 50 units profit!

So if you can sell for 2 units in the cheapest market why can't you sell it to everyone at that price? Because it wouldn't pay for the sunk cost of developing the product in the first place.

Nothing is priced based on the cost to create its just the lowest possible floor for the price in the absence of other costs.

Software has a floor so close to zero it might as well be zero but a high cost to create the initial copy.

If this is how we forced everyone to price everything, how many people on Hacker News would suddenly be making minimum wage?

Tech is literally the land of provided utility, it doesn’t cost much of anything to shift some bits around.

Remember that the marginal cost of one more digital copy of a game is really low; most of the cost is in the fixed development costs, which means that what matters is their total sales income. So the whole reason they can sell at a lower price to some countries is precisely because they're selling at a higher price elsewhere and making back their development costs that way. If they can't do that, they're almost certainly going to have to sell at the higher price everywhere.

It's unlikely that tiny, relatively unimportant video game markets are going to change the tenants of capitalism.

> If they are able to sell to a lower price to a given country, why would they not sell at that price to everyone else ?

Because they'd make less money

That would be geoblocking.

That makes it impractical and useless to sell for different prices; if a digital good costs 50€ in Germany and 20€ in Italy, both Germans and Italians will buy it in Italy. Companies are therefore forced to sell it for 50€ to everybody. That hurts Italian customers.