[news.com.au] Aus Federal Government forces Apple, Microsoft and Adobe to testify in pricing... - Page 10

Originally Posted by solar0987 

How does that work?

From a few week ago
Say they make pricing the same everywhere.

You make double what i do so then the usa would be at a loss.

If your minimum wage is 15$ a hour whats a norm base pay?
our minimum wage in tennessee is 7.25$
Your country would get ritcher...

Its just the cost of living for your country.

Originally Posted by Yumyums 

Good for them! I agree when people say it makes no sense, there's no reason even the same digital products cost more over there

Originally Posted by Chrit 

I don't know why people use "Because Australia's minimum wage is higher" as a reason to charge us more. If you owned a shop, and a poor and rich person walked in, would you charge one more than the other, just because they have more money?

A lot of people have worked hard to get where they are, a lot of us are lucky we were born here, but charging a country more just because of a strong economy is ridiculous.

Originally Posted by Rayleyne 

Just because your minimum wage sucks ass doesn't mean ours has to, We pay far more for utilities then you do, Hell our electric costs are more then your electric, gas, And water combined, My last months electric bull was above 500 bucks.


It also gives NO REASON none AT ALL EVER AT ALL to charge extra over here, NONE and things are more then twice as expensive, They are often 300-900% more expensive over here.


Australian government VS M$, I know who put my money on, And it ain't M$ BRING IT DOWN BOYS.

Originally Posted by Alatar 

Disproportionally higher prices in some area mean that competition isn't really working there. In Australia's case it smells of price fixing more than anything else. Can you name a single reason why Steam games for example are priced sky high over there?

Price fixing is not okay any more than a cartel is okay and it's about time the Australian government does something about this.

Originally Posted by frien 



Highlighted some relevant bits.

Raylene, if you think about what you've said, you've actually provided some of the reasons why products, even digital downloads, are (correctly) priced higher in Australia.

It's not as simple as just downloading the same product from the same server - to operate effectively Microsoft require a physical presence in Australia and, because the economy is so strong there, they have to pay significantly more than they do in other countries for:

Premises rental/land purchase and construction.
Electricity/water/services.
Transportation (vast country with a small population so has relatively poor infrastructure.)
Wages.
Tax (probably/maybe don't get the same tax breaks as in the US?).

It therefore costs them a substantial amount more for each unit sold and that's without even considering the difference the tiny size of the Australian market makes. So if the prices were the same then they would have greatly reduced margins which would effectively have to be subsidised by other larger markets.

Apple/hardware in general can have all of the same costs, however they also have to pay significantly more to ship and distribute their product to and around Australia. It doesn't matter one bit that it's less distance to ship from China to the US, the cost is still far higher (again due to the tiny size of the market) and the cost of shipping within Australia is ridiculous.

Originally Posted by Vengeance47 

Whilst some of what you say would seem to make sense, the fact of the matter still remains. Not just for products from MS, think about buying video games from Steam as an example. How can you justify a 100% markup on a video game delivered via a digital service? Especially when a lot of those developers/publishers have almost no presence in Australia at all (when compared with a company like MS or Apple).

It's just plain and simple price gouging. Also the funny thing is, you mention a tiny market size. Sure compared to the 315million odd US citizens its pretty small, but +/- 23million people isnt a tiny market. Especially in a country where the consumer index is actually quite strong compared to the rest of the developed world for the past 3 years. I do agree that freight costs in Australia are over-priced, largely due to middle-men ripping everyone off (something the government also needs to crack down on). But to say that Australia is a tiny market (when you compare it to European countries such as the Nordic countries that have 5-9mil and a 20-25% VAT tax) is just ridiculous. Granted, we're not a huge market either, but there are MUCH smaller markets out there such as the aforementioned nordic countries, New Zealand, other small European countries. Lets not forget too that EU countries have 20%+ VAT......we have a 10% GST, so there's 10% less tax right there that consumers are paying, but yet we still pay 20-30% more than EU countries for things. How does that work?

Being someone who has spent a lot of time in Sweden, when I see computer components in a country with 25% VAT on them and only a population less than HALF of Australia, I find that absolutely ridiculous. Granted, Australia is almost the size of the entirety of Europe, but given the insane VAT tax rates in the EU, plus the stupidly strict EU laws and regulations (see what is happening with the Mac Pro in the EU atm) I find it ridiculous that I can buy products in Europe for 20%+ cheaper than what I can back in Australia.

We are happy to accept a markup for products as Australia is an expensive country, however as an example, one piece of software from Microsoft was $9000 MORE expensive than in the US.......$9000......how can you justify that? You can get first-classs flights from Sydney to LA for almost $9k. Let alone fly return economy about 4 times.

Also, as mentioned here, the higher costs in Australia do not account for the degree that prices are marked up;

http://www.abc.net.au/news/2012-07-19/choice-digital-ripoff/4140196

We are plainly and simply being price gouged and thank god the government is trying to do something about it.

Originally Posted by Avonosac 

If steam maintains server presence there to aid your experience (likely) they will have the same reasoning for increasing the price, it simply costs more to operate there.

I do have to say, even if your price index is strong, think about it this way... The entire continent has a slightly larger population than the Greater Los Angeles area. 1 City ~= 1 Continent.

I'll step back and say I definitely think there is a lot of price gouging going on, in a market that small you won't have competition, so the prices can pretty much be determined by the seller, and the seller will always make extra when they can freely set the price. But try not to rationalize too much to on national / continental pride level, and look past the fact that the market is indeed really not that large. The cost to cover a market with that low of a population density must be real high.

Originally Posted by Vengeance47 

Steam servers here are operated via ISP's on behalf of Valve. I'm sure there is some form of agreement between parties for monetary gains however again, not to the value of a 100% mark-up.

But its a null point anyway because Valve don't set pricing, publishers do. Steam is simply the storefront, the publishers set all regional pricing around the globe. So basically, there is no justifiable reason for a 100% mark-up on the Steam service. Certainly not from Valve's point of view as they do not dictate pricing, its the publishers. Which then leads me back to the point in cases where publishers have very little invested in Australia (barely any publishers have retail/office space in this country) but yet want to charge us $80-$100USD for a game that is $50USD in the US. Its just price gouging, simple as that. There are no valid reasons for it. Its pure and simple greed. The publishers don't pay for the back-end hardware, they simply give Valve a percentage of each sale, so again, no valid arguement to justify these kinds of mark-ups

Originally Posted by TheOx 

Ha, this will be very interesting especially with Adobe and their crazyily priced products!

Originally Posted by PostalTwinkie 

Yes.

I honestly believe Adobe prices themselves out of a very large user base, their products fall into a very rare category of pricing causing pirating. Generally people who pirate wouldn't buy your product if they couldn't pirate it, however, I believe a lot of the people with pirated Adobe products would buy them if they were cheaper. I know of a lot of people that have pirated versions of Photoshop, because they simply can't afford the software and the continual updates to it.

This thought was affirmed when Adobe went to a monthly payment option for their product. When you have a monthly payment option for your software, you know you are missing something and not connecting with your user-base. I could see that time of cost structure in an enterprise specific situation, but not on products that market to the consumer level as well.