EU Commission sends Statements of Objections to Valve and five videogame publishers on “geo-blocking” of PC video games

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  [Deactivated] on 07/04/2019 - 15:45

  Interesting. Thanks

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  fishball on 07/04/2019 - 17:02

  Would love to see an end to regional pricing & geoblocking but I think we'll still be stuck with geoblocking games due to government censorship.

  One of the games I wanted to play was blocked by Australia and Germany on Steam and you can't even view the page without a VPN.

  • 

    Lysander on 07/04/2019 - 18:28

    Out of curiosity: which game is that? Risen?

    • 

      fishball on 07/04/2019 - 19:31

      Valkyrie drive bhikkuni

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        Lysander on 08/04/2019 - 05:41

        Looks….interesting, to say the least.

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  samfisher5986 on 08/04/2019 - 10:07

  Steam certainly has geoblocking outside of the EU (to mind come keys from Russia, Argentina, India etc.) in order to maximise profits.

  No, Steam has geoblocking available so that publishers/developers can sell Indian and Russian keys at a huge discount.

  If this geoblocking was removed games would not become cheaper, they would simply change the Indian/Russian keys to be the same price as western countries.

  It would actually be a huge loss for those gamers as they wouldn't be able to buy games anymore.

  The only reason they even bother to sell at such a huge discount, which is not profitable if done globally, is because its digital and some income is better then no income.

  • 

    Lysander on 08/04/2019 - 14:54

    -1

    I wonder why people think there is only one direction to go.

    Why not lower the pricing level for everybody to the lower level? Oh, because their pricing model using geoblocking is to maximise profit.
    I do not see Porsche and BMW reducing their car prices in Russia or India by 90% just so everybody can buy them - in fact according to my Russian friends the prices there are higher than in many Western countries.

    According to an ex Valve employee Steam is a money printing press and that makes sense, too.

    Given that, Steam could indeed lower the prices to the lower level and still makes heaps of profit. They simply do not want to and of course, from their point of view I can understand maximisation of profits. However, it does not mean I agree with their policy and think prices can only go up - they can also go down.

    https://techraptor.net/content/former-valve-developer-says-s…

    • 

      fishball on 08/04/2019 - 15:13

      Iirc the publisher sets the prices not Steam and that includes the regional pricing.

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      samfisher5986 on 08/04/2019 - 16:44

      Again, you get it wrong.

      Steam does not set prices.

      Steam only takes a percentage cut of what the publisher sets.

      Steam can not lower prices.

      How did you manage to get it so embarrassingly wrong?

      Reducing the cost of all games from $70-100 AUD to $20 AUD would cause all companies to go bankrupt, especially indie companies.

      What a stupid suggestion.

      And to the embarrassment of your post, you are comparing a digital product to a physical product.

      It does not cost money to ship a digital product to Russia.

      Russian prices could be set to 5 cents, there is no difference. Russian prices are not set based on what is profitable, its set to simply get something rather then nothing, as most people in these countries will pirate the game instead.

      • 

        Lysander on 08/04/2019 - 17:56

        Why are you so aggressive and become insulting? Can't you discuss being civil and nonaggressive?

        Steam could lower their cut making games cheaper - there is no need to enforce a 30% cut. Other companies have different margins in different countries.

        Given how intensely bundle prices are discussed, especially if the HB Monthly is worth it, I am surprised you believe people should pay the prices you stated and that you believe $20 prices would bankrupt companies even though there are no additional costs for selling additional products. If you are right then any discussion about paying less than $20 for 5-6 games should be superfluous.
        Plus the question would arise why companies would include their games in bundles if that made them go bankrupt.

        Also, the risk is that if people feel ripped off in the high price countries, they will pirate the games too so then the developer or Steam have won nothing.

        Finally, Steam does play a role in all this as they know people can circumvent the system by making account in the relevant countries. However, Steam then requires a local payment method - this is how Steam and Steam alone enforces geographical pricing. This shows they play a very active and central role in this. In fact, without Steam's actions geographical pricing would not work.

        Again, I am happy to have a discussion and exchange views but in a civil and nonaggressive, non-insulting manner. It should be possible to have a different opinion without being insulted etc.

        • 

          samfisher5986 on 08/04/2019 - 20:00

          @Lysander: Steam offers a lot more services then simply a place to download your game. I can't tell you if 30% is the right cut but I can tell you that the cut needs to be a lot larger then its competitors as they offer very little. Think of it as Steam as an actual game service, and the other services are glorified download managers.

          I think you fail to understand my point about the cost

          If you sell 5 million copies at $60, and there is 100% piracy in Russia, you've made $60 * 5 million.

          If you sell 5 million copies @ $60 + 1 million in Russia at $20, you've made more then before, you sold it under the right cost, but its still added money.

          If you sell 5 + 1 million copies at $20, you've just lost a ton of money.

          Here is a fun fact

          Games have cost $60-100 USD since the NES in 1986. Why would we all of a sudden go to $15 USD ($20 AUD)

          Think about any game that has underperformed and went bankrupt or sequels were cancelled. If Indians and Russians could afford $60 USD and didn't just resort to near 100% piracy, then those games could have survived.

          The whole point here is that Russians and Indians can not afford the normal price to buy a game, rather then just exclude them, they get a discounted rate, often to help combat the near 100% piracy rate they can sometimes have.

          ---

          Also you are wrong about Steam limiting anything.

          1. I have purchased overseas games on Steam using a VPN in the past
          2. You can buy a Russian/Indian cd-key from a huge range of websites and redeem this on Steam. Steam does not limit you, only some publishers.

          ---

          If you want me to be civil and non aggressive, all I ask is that you research and only post factual information or opinions.

          Its very rude to post wrong facts on the internet that would literally take 30 seconds to fact check via Google.

          We are not in a race, this is not Live TV, you are not required to quickly respond before checking your facts. You can take your time.

          • 

            Lysander on 08/04/2019 - 21:36

            @samfisher5986: Sorry, here is the link to the Subscriber Agreement:

            https://store.steampowered.com/subscriber_agreement/

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  Lysander on 08/04/2019 - 21:34

  @samfisher5986

  Well, I believe what you say you have done but in fact that is breaking Steam's terms and conditions and can result in your account getting banned.
  Using VPN to buy and using VPN to redeem is actually prohibited.

  3.A. of the Steam Subscriber Agreement:

  "You agree that you will not use IP proxying or other methods to disguise the place of your residence, whether to circumvent geographical restrictions on game content, to purchase at pricing not applicable to your geography, or for any other purpose. If you do this, Valve may terminate your access to your Account."

  So, you see Steam plays a big part in this and the fact that they link your IP address to your account and require a payment method located in the country you want to buy from (if you do not want to run the risk of getting banned) is actually the key in enforcing geographical restrictions.
  If you Google this issue you will find many, many posts regarding this.

  Regarding your calculations that is a whole lot of assumptions: you forgot to mention the following cases:

  1. Instead of 5 million people buying at $60 in the US + 1 million at $20 in Russia maybe 12 million buy the game at $40 in the US or 25 million at $20 + $1 million at $20

  2. Or the people in the high price countries are sick of getting ripped off and instead of 5 million paying $60 in the US 3 million people pirate the game instead (but would have bought the game if it was the same price as in Russia)

  In both these cases there is less money due to the high price. And given piracy in other areas of entertainment (keep in mind Australia is No. 1 worldwide pirating GoT episodes despite it being available legally) I believe people will resort to piracy when the price is too high.

  Regarding the high price of games in the past, yes that is true, and I believe games are too cheap. However, just because in the past the circumstances were such that companies had it easy to rip people off does not mean that that time should be the measuring stick (think CD pricing and music pricing in general).

  Now, finally, regarding Steam offering features. For me personally, that is irrelevant and I should not be forced for features I do not care about or want. I just want to play the games I purchase. I do not want chat functions, multiplayer functions or servers, badges, cards, anything. Ideally, Steam would deliver games to me like GOG but unfortunately they do not. I wonder if people get upset if Steam decided to have multi-tier pricing and offered dirt cheap prices to people like me who do not use or want those features and charge higher prices to the people playing multiplayer - as, by the way, is the case with XBone and PS4 (as one needs a subscription for multiplayer).

  So, you can see, I have actually done my research, especially in relation to the geographical pricing, its legality, and the terms and conditions (as that is some part of some of the projects I do).

  Oh, and yes, 30% cut is right which is why the former employee says Steam is like a money printing press. And the 30% cut is exactly the sticky issue for developers - which is why they like what Epic offers which is only a 12% cut which means more money for them.

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    samfisher5986 on 08/04/2019 - 21:38

    The VPN etc isn't necessary because you can just buy the key from a key shop. The subscriber agreement is very normal for these types of services.

    I'm not sure what your calculation idea is, at $40 the game is too expensive for Russians. Reducing it from $60 to $40 won't change anything, its still cheaper at $20 in Russia.

    The features I was talking about were mostly for game developers. Its not relevant what you want. The only reason a few companies have gone to epic were because of huge bags of money.

    Epic are losing a lot of money right now, they said so themselves. They are only offering a good deal to steal customers. Its all funded from Fortnite.

    You have some good points, but its a very big assumption and you need to know one thing.

    There are tens of thousands of university educated people who have studied specifically to make companies money.

    If pricing games at $60 USD normally and $20 for Russia/India is what works, then thats what is highly likely to work.

    Therefore your suggestion is only going to result in less money, you can't argue with tens of thousands of people who's sole job is to make more money.

    • 

      Lysander on 08/04/2019 - 22:26

      Starting with your last point:

      remember the financial crisis? There were millions of people, uni-educated, apparently smart, and yet it happened and they did not see it coming and could not fix it. Many big companies, especially, in the US went bankrupt. So, at least for me it is not an argument to say because many people do it, it is right or optimal.
      When I was a trainee lawyer in London, there were legions of lawyers in the big banks and yet all of them had not read some European legislation correctly therefore breaching it. Only little me did and I told my supervisor. Big scrambling in the months thereafter to comply with the legislation. Which shows that the big number of people does not always necessarily knows best or more.

      I am not sure what key shops you refer to but if you mean G2A etc. then there are different keys for different regions and the keys marked for Russia cannot be redeemed without VPN - I have traded a key which unbeknown to me was EU locked and with my Australian account I could not redeem it. I made a separate new account, used an EU VPN and then it worked. So, a VPN is needed there and then one infringes the Steam T&Cs.
      So, yes buying works but that is useless if I cannot redeem without a VPN and then see the point about Steam's T&Cs.

      Buying or gifting from Steam does not work either. Being in Australia and having an Australian payment method I cannot buy anything on the Russian Steam store. So, that is out too.

      If it is not relevant what I, the consumer, want then I have to say that is very bad customer service.
      Well, you are right about companies wanting to make money - therefore it is absolutely logical companies flock to Epic as Epic pays them money upfront and takes less than half the cut Steam takes which makes more profit for the companies benefiting the developers - clearly that is what they want.

      Regarding my calculation, the point really is: if they made the game cheaper (which they have not tried yet) many more people might buy the game and they could end up making more money. Again, I have to use an analogy to movies. When movies were relatively expensive many people pirated. Now we have Netflix and the majority of people pay for their movies now. So, the price per person is cheaper but the studios make a lot more money than before (through income and saved costs for pursuing pirates, court costs etc.).
      In other words, Steam and the publishers might make a lot more money if they lowered their gaming prices significantly as the lower prices would be compensated by the great increase of people buying the game.
      They have not tried it yet as those many very educated people have been too cautious to try this, despite precedents in music and movies. If Google indeed does a cloud streaming service (Stadia) and offers a flat rate with a great game selection prices will come down, and all the publishers and developers will still continue to exist provided they produce quality games.
      If I take myself as example (virtually all of my friends see it the same way): if a game I want to play now costs $60 here but $20 in Russia right now I will not buy it. Result for the publisher: $0
      If the price was $20 I would buy it. Result for the publisher:+$20
      Of course, if I wait long enough the price might get to $20 eventually but by that time I will have lost interest or spent my $20 on a different games that was offered at a better price point at the point of time when I want to play it.
      So you see, in this case $20 would be better than $0 for the publisher and Steam.

      Reading back over our conversation I see that we do actually agree now:

      I said "Steam certainly has geoblocking outside of the EU (to mind come keys from Russia, Argentina, India etc.) in order to maximise profits." and you replied:

      "No, Steam has geoblocking available so that publishers/developers can sell Indian and Russian keys at a huge discount."

      but really you have said that the pricing model achieved by geoblocking is there for the companies to make as much money as possible.

      Personally, my opinion is that it is wrong and the publishers and Steam would benefit more if they lowered prices and gave up the regional pricing (especially since it is very much out of whack in some countries and regions - example Estonia, Lithuania, and Latvia which have EU prices but low income) because I believe that the price reduction would be more than made up for by an increased number of buyers, those buyers buying more regularly too. But that is just my opinion and of course other people have other opinions.
      I certainly have a price limit I set myself and anything above that won't work for me (plus I have to admit that things like $2 for the whole Borderlands Handsome Collection in Russia vs $16 in Australia (and I already have the base games and some DLC included in the Collection) does make me a bit angry as I am only human too).

      • 

        samfisher5986 on 08/04/2019 - 22:40

        A lot of game developers, often smaller less popular games have tried pricing cheap in the past. All the games I've noticed have made their sequels more expensive, as they are more popular generally.

        but really you have said that the pricing model achieved by geoblocking is there for the companies to make as much money as possible.

        No, because before they had separate pricing for India and Russia, those countries simply had to pay full price, and instead they pirated the game.

        Personally, my opinion is that it is wrong and the publishers and Steam would benefit more if they lowered prices

        Huge baseless assumption there, you are saying you know better then the entire gaming industry.

        I certainly have a price limit I set myself and anything above that won't work for me (plus I have to admit that things like $2 for the whole Borderlands Handsome Collection in Russia vs $16 in Australia (and I already have the base games and some DLC included in the Collection) does make me a bit angry as I am only human too).

        You are angry because Russian people live in poverty and get discounted games, but you can't take the same advantage while living in luxury?

        Ok…

        I think you need to do more research on what life is like outside of Australia and why having pricing to make a game affordable for people who live in poverty is a good thing, not a bad thing.

        • 

          Lysander on 08/04/2019 - 23:33

          @samfisher5986: I have actually lived in 5 other countries outside of Australia (incl. Russia for a little while during a project). They are not all as poor as people seem to believe, and there is great poverty and misery in Australia too (mainly due to the housing speculation and hence housing shortage but again a different topic).

          I am not making a baseless assumption - there are many, many studies that prove what I have said in relation to the music and movie industry (they also dispel the myth of piracy damages but that is a different topic).

          Also, have a read of this in relation to possibly making more money through cloud streaming services than selling games as the gaming industry does now:

          https://www.gameinformer.com/2019/04/03/former-onlive-ceo-sh…

          Remember the guy saying it is one the few people actually having real experience with that type of thing.

          Look, the majority is not always right. In fact, all the so called disruptors who are now hugely successful were alone with their opinions. Examples are:

          Amazon - went totally against the whole publishing and book industry
          Steam - went against the conventions of the gaming industry
          DLCs - see above
          Car sharing and Uber
          Telecommunication industry - Apple and iPhone (google what Steve Ballmer said about the iPhone)

          Not that I want to compare myself to these guys but what I am saying is that just because an industry says one thing does not make it necessarily right.
          Again, remember the financial crisis - the whole banking industry, governments were convinced all was fine with only a few economists issuing warnings. They were ignored and we all know what happened.

          Also, talking about baseless assumptions: I would love to know how you come to believe I live in luxury in Australia. I really do not - in fact far from it. If anything comparing Australia and the other countries I have lived and worked in it is exactly vice versa. I am only here because of my partner and the kids, and also because of her I mostly work in a "social" capacity helping mostly people in need and who cannot get help elsewhere. So, I am far from rich and living in luxury.

          Finally, there is one thing you forget: gaming is not a necessity of life. It is not life essential. It is a want, not a need.
          Games do not have to available freely to everyone and everywhere, just like a car or a particular brand or alcohol or cigarettes do not have to be.
          All of these things are luxuries - it seems that this is often forgotten when it comes to games. There is no basic human right to a gaming PC or a gaming console or a big screen TV etc.
          We still have CRT TV simply because our money needs to be spent elsewhere. We still go to the library to get books, DVDs, and even games because as much as I would like to buy all of these, we simply cannot afford it.
          In Australia there are many people who cannot afford the games at the high prices - do you think the people who are really poor here can afford a $60 game?

          I think maybe the government and the companies operating in Australia should apply this type of pricing within Australia too as it would only be fair. Those earning say above $60,000 a year should pay 50% more for everything at every store (including any luxury items and cars), for every government service (e.g. passports etc.) while everyone earning below that threshold should only pay 25% of the current price (saving of 75%). That would account for different earning and buying powers.
          Of course I am not 100% sure but I think such a system would probably result in a revolution in Australia.
          While I more than support helping the needy and disadvantaged (which is why I do what I do and do not earn heaps and heaps of money and volunteer on weekends) I think there are limits.

          Finally, you said it yourself: in times past games were a lot more expensive. People viewed it as a luxury (and not a cheap commodity), saved up for it (I can remember doing that), and were careful picking which game to buy and then played such game for months.
          Maybe that approach and attitude was not/is not such a bad thing after all.

          • 

            samfisher5986 on 09/04/2019 - 00:47

            @Lysander: You are comparing poor people in Australia to Russia? Seriously? You need to check your facts, we live in luxury, even our "poor" people.

            I suggest you go and compare minimum wages.

            • 

              Lysander on 09/04/2019 - 02:14

              @samfisher5986: Have you considered living costs?
              All I am saying buying games is a luxury, not a necessity to live - anywhere in the world.
              It is much more crucial that every human being can afford to eat.

              Have you ever been to Russia or do you know all you know about it from TV, magazines, newspapers, and internet?
              It has to be put in perspective.
              But we are talking about games - my point is that not everyone needs to be able to afford games and in fact cannot afford games - that is the case both in Australia and Russia. In fact, in every country in the world.

              Please do not talk to me about not knowing poverty - I have known it and we are still poor, thanks to our community work and efforts. If I make half of the Australian average annual salary I am lucky and we do not get government support. As I said, CRT TV, no car, no gadgets, $20 phones etc.
              Please correct me if I am wrong but I believe between the two of us I know better what poverty is.

              I still believe regional pricing is wrong and that the gaming industry is price-gouging - the EU Commission is doing something about it and according to Google Sony, Microsoft, and Nintendo are also under investigation in the UK for not complying with consumer rights such as refunds.
              The going will get a bit tougher for the gaming industry and the happy times will be coming to an end.
              Have a lovely night.

              • 

                samfisher5986 on 09/04/2019 - 11:02

                @Lysander: Your attitude is terrible.

                1. You downplay Russian poverty and compare it to Australian poverty.

                2. You say that they don't need discounts and they don't need to buy games if they can't afford it.

                3. You play the victim complaining that you are "poor" and completely insult anyone in genuine poverty,

                You are such an over entitled person.

                The Russian minimum wage is $1.50 AUD. Our Minimum wage is $18.93 AUD.

                We make 12x more money then them and have a lot of other benefits along with that.

                And you seriously don't think they should have special discounted pricing for a digital item?

                Your original ignorant post was enough to tell me there is something wrong with you, but thank you for elaborating that over many posts.

                • 

                  Lysander on 09/04/2019 - 13:50

                  @samfisher5986: Mate,

                  I think enough is enough.

                  First you are aggressive and insulting and advise me to do research.

                  I then show you that Steam does what I say it does by showing you their T&Cs - it was you who did not do their research but no word about that from you.

                  You have not lived in Russia while I have - all your knowledge is from Go knows where.

                  You are looking at absolute numbers which is totally ignorant and child-like - for example, petrol here is 15 more expensive than in Russia so buying power over there is actually higher for that item.

                  When I calculate my hourly wage my minimum wage is more like $6 an hour while still having to deal with the much higher prices here.

                  If anybody is entitled here, it is you. Games are a luxury and not a right for everybody, just like I believe the working public should not have to pay for a packet of cigarettes and bottle of wine a day and a new car every 2-3 years for those not working as all those things are luxuries. What should be paid for is accommodation, food, health, and utilities as those are necessary to live and amount to basic human rights.

                  At your age which I assume is 18 or older you should have the maturity of accepting other's opinions without insults (direct or indirect).
                  But of course, the statement

                  "If you want me to be civil and non aggressive, all I ask is that you research and only post factual information or opinions"

                  should have been a hint as (a) I have posted an opinon, factual information (which in fact you got very wrong in relation to Steam's involvement in all this as their own T&Cs show) and (b) treating another human being with respect and dignity is not and cannot be dependent on your judgment in relation to whether or not you like someone's opinions or like the facts presented. Respect is not conditional, especially in this situation when I have done nothing to you.

                  And of course, the fact that you chastise me for not doing research when it is you that should have read a bit more, especially the T&Cs and the Commission notice as it clearly explains why and how Steam in involved - do you really believe all of these professional just do this if Steam is totally innocent and not involved?

                  Maybe google a bit more and also check Steamtrades - look at old posts and you will find that many of the Russian gamers you think are poor actually earned a good living out of gifting games - there are some that made $10,000 US a year which is not bad by anybody's measure. So, looking at it from that point of view, Steam took away earning opportunities from the Russians - instead their earnings now land in Steam's pocket and the publishers' pocket. Now, there is a moral dilemma as who should be more entitled to earn that money?

                  You ignore the questions (both actual and rhetorical) I pose as you know they discredit your arguments and expose their weaknesses (I am still waiting for the answer as why we should not have the discounted pricing model for the poor in Australia that I suggested) - I guarantee that if you are part of the group that pays 50% more you would be very upset and would find it very, very unfair.

                  So, unless you can have a discussion in a civil, non-aggressive, non-insulting, and open-minded manner, please do not initiate one with me. I am happy to have one as I think exchange of thought is very important but if insults, aggression etc. are involved I do not want to waste my time with it as there are plenty of other things I can with it.

                  I wish you a lovely day and a great week.

                  • 

                    samfisher5986 on 09/04/2019 - 14:15

                    @Lysander: All I can read from you is a justification from you on why Russia shouldn't have anything discounted, which would be terrible for them as simply can't afford it.

                    But you don't care because you are also "poor"