Rufous

What is the deal with the console/PC market in Russia? : r/Games

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{
  "post": {
    "title": "What is the deal with the console/PC market in Russia?",
    "selftext": "To start off I must say that I am from Moscow myself, but I still don't get how the whole system works. \n\n\nProbably a lot of you guys know that PC game prices in Russia are a lot cheaper than in the US/rest of Europe. New PC release usually costs about 15-30 dollars for us and can be activated on Steam. If I remember correctly, Gabe Newell said that it's all about service and that the Russian market is one of the largest european markets for them right now, so I assume that *something* works, right? Just to clarify, (not pirated) cheap games were in Russia -before- Steam adopted this structure.\n\n\nHere's my question - if this strategy works and the largest digital game distribution platform is already successful with it, why hasn't it been adopted to console markets? Right now, for example, average console release is priced somewhere in between 2000 and 2400 rubles. That's 65-78 dollars (50-60 euro). And it's been like that forever - never have  I seen an affordable price for a PS3/X360 game, and now - for Wii U game. I still remember ordering MGS4 from eBay and Mirror's Edge/Valkyria Chronicles from Game.co.uk waaay after they were released simply because I had to wait for the prices to drop. \n\nWhat is the main difference between these platforms that make such a huge gap in approach for publishers? And will this ever change?",
    "url": "https://www.reddit.com/r/Games/comments/15pq3p/what_is_the_deal_with_the_consolepc_market_in/"
  },
  "comments": [
    {
      "body": "I can tell you about the console state in eastern europe, every single one of them is flashed, every, I have yet to see a legit xbox or ps3 that is not in some super rich kid's house. Thus I can't just help myself but laugh whenever I hear a statement that no one pirates console games..."
    },
    {
      "body": "There gap is pretty easy to understand. Russian game prices are incredibly low because the Russian economy is in the tank and the market can't afford the prices a lot of the world pays. While we shell out 20-50 dollars, you pay 15-30 dollars for a game off of Steam.\n\nConsole prices tend to be higher all around the world. We play around 60 USD for a new release, your prices are a bit higher than that. The difference comes from the two different demographic targets of the console and pc game manufacturers.\n\nConsole manufacturers sell their games for an extremely restricted system with no other applications. If you buy an Xbox 360, you're going to buy games for it, and the only way you're looking to buy a console game is if you own the console in question.\n\nPC games, on the other hand, can be played on much more flexible platform. If you had to choose between only owning a PS3 and only owning a computer, which would you pick? A wider and less-wealthy share of the market can be targeted by PC gaming developers compared to the restrictive nature of console devs, because more people are likely to have access to a computer.\n\nSo, in summary, PC games are cheap to try and encourage as many purchases as possible even amongst the less economically well-off citizens of Russia. Console games by their very nature are set aside for people who have disposable income to dedicate to gaming, and are attempting to sell to a smaller share of the market at a higher cost to keep up profits. Valve targets wide and low, while Microsoft aims for high and narrow.\n\nDisclaimer: I'm incredibly sleep deprived and have no idea what the hell I'm talking about.",
      "replies": [
        {
          "body": "That makes sense, but why would wouldn't the 'restricted' part help the market grow? With a PC, even if I can buy a game, I can still pirate it, but with a console - no dice (assuming I am the part of the demographic that does not bother hacking a console). If we make prices at least a little bit closer to each other, wouldn't that make sense for an average gamer to buy a console? It has a centralized digital store and account system, most of the games released on PC are on a console as well and the performance/cost is higher for console. \n\nMaybe I'm missing something, but it's really hard to judge the whole situation without the numbers to support any theory which I failed to find unfortunately.\n\n\nedit: to at to that, is the number of people who can afford a 60 euro game that high to make a profit? Almost any russian forum where people actually buy games for consoles consist of barter topics and of mostly old games - people buy/trade used games, almost nobody wants to buy one. After all, this 60 euro game is somewhere around 5% of an average salary here. That is quite a lot I should say.",
          "replies": [
            {
              "body": "As a  russian, I can tell you that hacking consoles is much more prevalent here than in america."
            },
            {
              "body": "Another point to consider in case of console game prices is the certification process.\n\nSince consoles are \"walled garden\" in comparison to PCs and the manufacturers intend to keep it that way, console games need to pass a certain certification process to be egiliable to be published for specific consoles.\n\nOf course, this process is not entirely cost free and should you need to patch your game these patches need to go through the same certification process. That's also one of the reasons why some games (aka multi-platform releases) are sold at a higher price point than their PC counter-parts."
            }
          ]
        },
        {
          "body": "Well, I live in Portugal, I'm sure you've heard how well we are... If you want to buy a console game you need 70€ and 50€ for a PC one. Entertainment here is always a lot more expensive and we are very bad, along with spain, italy, etc. For example, an iPad costs 600€ and minimum wage is 480€~. Why is it different?",
          "replies": [
            {
              "body": "Economically speaking, because that's a price you're willing to pay as a market. There may be external influences that effect how developers decide prices for your region, but if nobody was making a profit in your region they wouldn't be selling there."
            }
          ]
        },
        {
          "body": "Umm, but a capable gaming graphics card, depending on how high you aim, costs about as much or even much more than a console (and doesn't have much use besides gaming for the wide majority of users). And that's without the rest of the components. He isn't talking about Faerie Solitaire on Steam, he's talking about new AAA releases (mostly the same ones as on console) being released for very cheap on Steam in Russia. So your \"less well off but wider market segment\" argument doesn't really hold water here. Applies to indie games maybe, but I doubt the OP was talking about those.",
          "replies": [
            {
              "body": "Not really. I bought a Radeon HD 6750 last year for ~80€ and I suppose it will last me a few years. Especially since the next gen consoles won't have really strong hardware anyways. The only thing I have to turn off is AA. And I don't really care much about that.",
              "replies": [
                {
                  "body": "A 6750 isn't even enough to run Far Cry 3 in very high without any AA. So you're either not playing recent games or turning down more than just AA. \n\nAccording to this [benchmark](http://www.techspot.com/review/615-far-cry-3-performance/page2.html), it already fails running Far Cry 3 at very high quality (there's ultra above that!) in 1680x1050 (let's not even talk about 1920x1080) with no AA.\n\nBut point taken, the market is wider than ~200 dollar cards. I still wouldn't support the argument that the PC gaming market is that much wider than the console market. Looking at sales figures, the console markets (especially when combined) seem a lot bigger.",
                  "replies": [
                    {
                      "body": "Well I do play it on Very High on 1280*1024 without any downsides for me. And as far as I see, it runs smooth enough."
                    },
                    {
                      "body": "It should still run any game you can throw at it. Then again if you think that the graphics are too bad then I don't think downgrading to a console is an option"
                    }
                  ]
                }
              ]
            }
          ]
        }
      ]
    },
    {
      "body": "With Steam, some publishers can play around with the region restriction and make sure those in rich countries cannot easily take advantage of the lower price, for example the recent Borderland 2 [Russian region issue](http://www.rockpapershotgun.com/2012/09/20/russian-borderlands-2-is-all-fixed/).\n\nPS3 has no game region restriction and XBOX 360 has only a few regions.  If they sell multi-language version of new games in Russia at 50% prices, you will see Russian web shops exporting console games within minutes."
    },
    {
      "body": "if i understand it correctly, no self-respecting russian who owns a console would ever buy a game for it.  piracy is generally comprehended as the only way to go.  since in the primary gaming markets consoles are generally where large publishers set their cash cows to roost, they are a lot less willing to be... experimental with their pricing to compete with piracy on those platforms.",
      "replies": [
        {
          "body": "Its not about self respect but rather utilization of your income.\n\nThe average wage in Russia ranges from $540-$1650/month, an $85 game is a considerable chunk."
        }
      ]
    },
    {
      "body": "In addition to economic factor that other have already described, it is also worth mentioning that a lot of games released in Russia are region-locked and feature only Russian language. Which is \"awesome\" for non-Russian people in Eastern Europe, since quite a lot of them would prefer to play with the rest of the world and in English. So the low price is also sort-of justified.",
      "replies": [
        {
          "body": "I'd love for Russian Dota 2 to be region-locked..."
        }
      ]
    },
    {
      "body": "so in theory, I can get my russian buddy vladamier to buy games for me, then gift them?",
      "replies": [
        {
          "body": "Funny or not, there were (are) a lot of trades going on with this exact idea since quite a few games were not region-locked or language-locked and you could, for example, buy witcher 2 for -literally- about tree fiddy and gift it to another non-russian steam user and it would work absolutely fine for him. "
        }
      ]
    },
    {
      "body": "> There gap is pretty easy to understand. Russian game prices are incredibly low because the Russian economy is in the tank and the market can't afford the prices a lot of the world pays.\n\nSo it isn't because they pirate the everliving shit out of every game? I thought that Russian economy is pretty fine, with their vast resources and keeping the whole Europe by the balls...",
      "replies": [
        {
          "body": "People usually pirate things when they can't afford them."
        }
      ]
    },
    {
      "body": "About the PC market???\n\nWell, they're obviously all at Dota 2 playing on US/SEA servers even when there is a Russian sever..."
    },
    {
      "body": "publishers prefer to sell at lower prices than not to sell anything, since piracy is a fact of life in Eastern Europe.\n\nthanks to Steam i recently bought almost all the games i have burned on CD/DVDs (even though some of them i'll never play again.. but i couldn't resist the sale offers :D)\n\nhowever like you said this is true only for the PC market. console titles in stores are really expensive in Romania too, sometimes inexplicably expensive.. say a $40 title at launch is $60-70 here.\n\nwhen we buy console games, we do so from online trading gaming forums.. there are some people who make a business out of importing cheap games from UK/US then reselling at lower prices than the local stores by evading taxes and other expenses the stores might have (rent, utilities).\n\ni still don't understand who are the stores selling to.. sometimes games rot on the shelves at fullprice even after 2-3 years from release. who in their right mind would pay fullprice for an old game? and who in their right mind hopes to sell at those ridiculous prices? at some point i'd imagine you want to get rid of a lot of your stock..",
      "replies": [
        {
          "body": "that's basically my point - I simply cannot comprehend how in the world could this model work in Eastern Europe since almost everyone hacks their console here. It would be really sad that the only reason console market does not want to adapt to the steam-esque prices is because of the good ol' ignorance. I really hope that one day it will change. We do want to buy games here! We just want them to be priced like any other PC game out here (well, obviously a bit more expensive, let's say 20% mark-up)",
          "replies": [
            {
              "body": "here 99% of Xbox360's are hacked.. but PS3's are not because PSN is free and it's the console of choice for online gaming.\n\npaying subscription for the online component is a faux pas in this part of the world."
            }
          ]
        }
      ]
    },
    {
      "body": "The other comments I've seen so far don't mention one *very* important thing about consoles: the consoles themselves are sold at no profit or at a loss. Sony, Microsoft, and Nintendo don't make money off of selling their consoles and sometimes even lose money on each console sold, so they have to make up for this through game sale revenue. PC games don't have to make money for both the game and console developer, so they can afford to be sold at lower price.\n\nOf course, other factors come into play on how games are priced, but I think that the console company's dependence on making up for their loses in console production is one of the biggest factors.",
      "replies": [
        {
          "body": " > Sony, Microsoft, and Nintendo don't make money off of selling their consoles \n\nThe wii NEVER lost any money, Microsoft has been making a profit a LOOOOOOOOOOONG time ago, and Sony only recently started making a profit (I believe it was arround the time the slim 250gb came out @ 300$).\n\n >  PC games don't have to make money for both the game and console developer, so they can afford to be sold at lower price.\n\nThat's not how it works. The games are cheaper on PC because consoles have more demand. The more demand, the higher the price + also to encourage PC users to buy games rather than just pirate them.\n",
          "replies": [
            {
              "body": "> The more demand, the higher the price\n\nThat does NOT apply when the overhead cost of additional production is near zero.  Supply/demand balance only affects the price when the supply is limited or has a cost that is not flat with production.\n\nIf all of the physical copies of COD4 sold out in Russia, the publisher can easily and in a timely manner make more and supply them to the market at the same price.  There is no \"limited supply\", except perhaps on shorter time scales of weeks or months at the retail level where the shelves will be empty until the publisher realizes they can ship an additional hundred thousand units to that market.",
              "replies": [
                {
                  "body": "Consoles have ALWAYS been more popular than PC gaming, I was not talking about \"normal\" demand in the general sence that the price is fluctuating all the time, I'm just saying that because the consoles have ALWAYS been more popular than PC (meaning there is more demand) the games are going to cost more, and that together with the ease of piracy on the PC it will bring the price further down."
                }
              ]
            }
          ]
        }
      ]
    },
    {
      "body": "It sounds like it's pretty much down to Valve seeing what the other, older, more mainstream publishers don't. They could make more money by being smarter about prices, but they're happy sitting on a smaller amount of easy money.\n\nI've always been annoyed at regional pricing though. In the age of being able to buy individual products over the Internet and have them shipped across the globe for cheaper than walking down the street and buying it from a physical store, something's wrong with economics.\n\nIt gets into moral territory where I start to think: if there wasn't a restriction on say, a German person purchasing from the Russian store (assuming languages aren't a problem), then lots of German people would buy the Russian copy, there would be a bigger demand for the Ruble, the exchange rates would even out, and the buying power of Russians would end up closer to Germans. But instead, digital distributors and other region-locking is like what China does, keeping their currency at a low value which is bad for the low-paid people.\n\nI don't even think the digital distributor is any better off doing this, because their profit should be their profit no matter what the number is in any given currency. It's how international trade is supposed to work, but it doesn't. The only benefit is the distributors avoid the eyes of governments and other people with guns.",
      "replies": [
        {
          "body": "> It gets into moral territory where I start to think: if there wasn't a restriction on say, a German person purchasing from the Russian store (assuming languages aren't a problem), then lots of German people would buy the Russian copy, there would be a bigger demand for the Ruble, the exchange rates would even out, and the buying power of Russians would end up closer to Germans.\n\nBecause video game sales are a huge influence on buying power and exchange rates. I don't understand where you are drawing all this conjecture from. Why is this desirable, anyway?\n\n> But instead, digital distributors and other region-locking is like what China does, keeping their currency at a low value which is bad for the low-paid people... I don't even think the digital distributor is any better off doing this, because their profit should be their profit no matter what the number is in any given currency. It's how international trade is supposed to work, but it doesn't. The only benefit is the distributors avoid the eyes of governments and other people with guns.\n\nHoly shit. If irrationality was a pool, you jumped off the deep end of it."
        }
      ]
    }
  ]
}