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Antitrust: EU Commission fines Valve and five publishers of PC video games € 7.8 million for “geo-blocking” practices

yurinka

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If they don't give a fuck then they should increase that fine.

I see a couple of dumb fucks using this as an opportunity to shit on Valve, but consider the following.

That's the Net average monthly salary for 2019, do you really expect gamers in former Warzaw pact countries to start paying 59,99€ for a new game?
The obvious solution is for Tier2 Euro countries to start buying games with rubles.
The EU isn't asking them to use the same 59.99€ pricing for the whole EU. They are asking them to allow people from the EU to buy in the stores of other countries, obviously where the games are cheaper. If Valve implements what EU is asking for, at least all EU users (including the ones from poor countries) would be able to buy their games cheaper.
 
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harmny

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I get your reasoning, and I know I'm repeating myself, but the point of this system is to make prices higher, not lower. You imply that the "default" price is the one in richer countries and i ask you why is that the case.

The logical next step would be to have prices tailored after your personal income, location and purchase history. That would be good for the customer too, following this line of reasoning.
(I know it's an exaggeration, it's for the sake of the argument)

because that's how the market works? prices are not determined by the cost of things. they are determined by how much are customers willing to pay. you seem to think that they because they are selling a new game at $20 in a third world country they are making a profit. the truth of the matter is the vast majority of the profit comes from the big countries and that is what keeps the industy afloat. the rest is just a plus.

half the total revenue from the global games market comes just from the usa and china (if you wonder why companies bend their knee to china this is why).

so it's not that they can afford selling a new game at $20 in small markets because there are no shipping and manufacturing costs. they can sell a new game at $20 because they'd rather have a small profit than no profit at all because those markets would be either ignoring that game or pirating it if it was $60.

If they don't give a fuck then they should increase that fine.


The EU isn't asking them to use the same 59.99€ pricing for the whole EU. They are asking them to allow people from the EU to buy in the stores of other countries, obviously where the games are cheaper. If Valve implements what EU is asking for, at least all EU users (including the ones from poor countries) would be able to buy their games cheaper.

yeah that's never going to work.
 
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Miles708

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the truth of the matter is the vast majority of the profit comes from the big countries and that is what keeps the industy afloat. the rest is just a plus.

half the total revenue from the global games market comes just from the usa and china (if you wonder why companies bend their knee to china this is why).

so it's not that they can afford selling a new game at $20 in small markets because there are no shipping and manufacturing costs. they can sell a new game at $20 because they'd rather have a small profit than no profit at all because those markets would be either ignoring that game or pirating it if it was $60
I've cut your "that's howmarket works" because it always sounds like a religious dogma for me. Personal nitpick, I know.

For the rest of your post, good point. I don't totally agree but i understand the reasoning.
 

Sean Mirrsen

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Sep 30, 2020
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I get your reasoning, and I know I'm repeating myself, but the point of this system is to make prices higher, not lower. You imply that the "default" price is the one in richer countries and i ask you why is that the case.

The logical next step would be to have prices tailored after your personal income, location and purchase history. That would be good for the customer too, following this line of reasoning.
(I know it's an exaggeration, it's for the sake of the argument)
Making prices lower would of course be ideal, but unfortunately that's not how capitalism works. Prices are set to the richer countries because those countries provide the bulk of sales, they provide the most profit. If we were operating under some kind of socialistic or communistic model, where 'the state' controls and funds everything, publishers could sell games at a flat low cost everywhere, or provide them to everyone for free, but that's not the reality we live in.
 
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harmny

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I've cut your "that's howmarket works" because it always sounds like a religious dogma for me. Personal nitpick, I know.

For the rest of your post, good point. I don't totally agree but i understand the reasoning.

it's not a religious dogma. it's economics.
 

The_Mike

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So basically it's about regional pricing.

Their argument is:
Today's sanctions against the “geo-blocking” practices of Valve and five PC video game publishers serve as a reminder that under EU competition law, companies are prohibited from contractually restricting cross-border sales. Such practices deprive European consumers of the benefits of the EU Digital Single Market and of the opportunity to shop around for the most suitable offer in the EU"

Which sounds all nice and "for the people!", except the end result will just be no more lower regional pricing in the EU and now Pc gamers in, say, Hungary or Poland with average net incomes of less than €1000 will be back to having the same game prices of palaces like France, Germany and Austria with a €2000+ average income.

My thoughts exactly. Games won't be cheaper. They will just be more expensive for lower income countries.

Which is another reason why EU doesn't work. Countries doesn't get same benefits, some gets more than others, while some countries pay way much and gets exactly nothing back.

Making prices lower would of course be ideal, but unfortunately that's not how capitalism works. Prices are set to the richer countries because those countries provide the bulk of sales, they provide the most profit. If we were operating under some kind of socialistic or communistic model, where 'the state' controls and funds everything, publishers could sell games at a flat low cost everywhere, or provide them to everyone for free, but that's not the reality we live in.

Tell me more about which communistic countries that gives out games for free, or even games worth playing.

Also, if giving up your freedom, your rights, and be surveillanced by the government, then you should visit China. A fantastic country by your standards.
 
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Holammer

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Jan 3, 2019
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Exactly. The result is Bulgaria will go back to pirating all their games again. Regional pricing turned entire countries into legit customers.
Russia was lauded as a text book example for that. Price and convenience stomped out rampant piracy there.

 

Nemesisuuu

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Mar 20, 2020
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I see a couple of dumb fucks using this as an opportunity to shit on Valve, but consider the following.



That's the Net average monthly salary for 2019, do you really expect gamers in former Warzaw pact countries to start paying 59,99€ for a new game?
The obvious solution is for Tier2 Euro countries to start buying games with rubles.
I'm laughing so hard at this, 922 euros in Croatia - yea right. Most of the country is in 500-600 euros pay grade.
 

Desaccorde

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Jul 25, 2020
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This is inherently a very complex question to answer. EU forcing low income countries to pay more might seem like a justifiable pricing option from a country that has much higher income than the other and vice versa, however it's the most logical solution to digital good piracy. I've been working in a multibillion dollar company's pricing department and could easily say that we differentiate all EU1/EU2 countries plus all the other ones with low income to boost our revenue/sales. That's the most common strategy in pricing in our current world.

Now ask me how we stop other countries, particularly the rich ones from buying with low income countries' price? Sales restriction like there's no tomorrow. I don't understand how different industries evaluated in EU council and they specifically chose gaming industry, but I think there's at least a dozen industries that follow the same pricing strategy. It only makes EU council to be seen as jerks and dinosaurs that's out of reach even from their own regional area.

Hoping that this doesn't end publisher's regional pricing because it will only boost piracy, which is 100% understandable and justifiable from the perspective of people living in those countries.
 
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Reizo Ryuu

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It means the Valve part is being fully paid while the rest of 6b will not be fully paid.

Valve doesn’t care at all... they will pay and continue doing their business... it is already the second time.
The second time?
The investigation started in ~2014, the formal investigation started in 2017, they were asked to stop in 2019 and also charged in 2019, and now they are being fined as a result of that charge.

These fines are just going to get higher and higher until valve cooperates.
 
Oct 26, 2018
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$1.6 million.

I wonder how this compares on a relative scale to NHL players getting fined on the second violation of Diving.

The fine is $2,000. The average NHL salary is $3 million.
 
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samjaza

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Did a search an this thread didnt come up
but this thread seems like a better place for this.
Valve’s statement:
During the seven year investigation, Valve cooperated extensively with the European Commission (“EC”), providing evidence and information as requested. However, Valve declined to admit that it broke the law, as the EC demanded. Valve disagrees with the EC findings and the fine levied against Valve.

The EC’s charges do not relate to the sale of PC games on Steam – Valve’s PC gaming service. Instead the EC alleges that Valve enabled geo-blocking by providing Steam activation keys and – upon the publishers’ request – locking those keys to particular territories (“region locks”) within the EEA. Such keys allow a customer to activate and play a game on Steam when the user has purchased it from a third-party reseller. Valve provides Steam activation keys free of charge and does not receive any share of the purchase price when a game is sold by third-party resellers (such as a retailer or other online store).

The region locks only applied to a small number of game titles. Approximately just 3% of all games using Steam (and none of Valve’s own games) at the time were subject to the contested region locks in the EEA. Valve believes that the EC’s extension of liability to a platform provider in these circumstances is not supported by applicable law. Nonetheless, because of the EC’s concerns, Valve actually turned off region locks within the EEA starting in 2015, unless those region locks were necessary for local legal requirements (such as German content laws) or geographic limits on where the Steam partner is licensed to distribute a game. The elimination of region locks may also cause publishers to raise prices in less affluent regions to avoid price arbitrage. There are no costs involved in sending activation keys from one country to another, and the activation key is all a user needs to activate and play a PC game.
 
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1.6 million Euro!!!

unimpressed michael keaton GIF
 
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