They’re not even the same currency at all, yet Steam or any other digital storefront decides to price a 80€ ($91) game the same as a $80 (69€) one when the conversions in reality are different to what the algorithm suggests. It’s reflected on Steam DB that Euro has a higher markup in comparison to US Dollar because of this, since I hear EU players nagging about paying 80€ at launch the same as US players don’t like paying $80.
It’s because one of the basic ideas of free market capitalism, that competition between suppliers will drive down prices to the lowest sustainable point, is a lie.
Everyone selling anything aims to be a price taker. That is, rather than sell for the lowest price that keeps them afloat they sell for the highest price they can get.
It’s normal to price games lower in less privileged countries.
shots fired
I heard it’s common over there
In Soviet Russia, State price games and then games play you!
Do EU prices normally include VAT? US list prices for games cannot include Sales Tax, because the tax can vary widely by State (or even by local government).
Yes, game prices include VAT. In Europe any displayed prices be they in a supermarket or on an online store always include VAT. It’s not even allowed to advertise prices without including VAT.
That’s not strictly true, because online shops for tradespeople often have a toggle to control whether VAT is included (and switch it off by default).
That’s a special case though, because VAT is handled differently between businesses
From what I know businesses still pay the VAT but they can get it back from the government later.
Taxes are always included in europe, so yes… though im pretty sure even with the sales tax games in the US end up being cheaper :p
I dunno. If someone sets the price at the same number…let’s see.
The current exchange rate is 1.1486 dollars per euro.
https://www.tradingview.com/symbols/EURUSD/
I’m pretty confident that VAT is higher than that in some countries in Europe.
searches
https://taxfoundation.org/data/all/eu/value-added-tax-vat-rates-europe/
This says 19% in Germany to 27% in Hungary. Mostly 20% or a little higher.
That assumes that whatever prices OP is looking at does indeed include VAT for the EU price (which would require knowing his location), and does not include sales tax in the US (which even aside from US convention of showing prices sans tax, presumably is the case if he’s not in the US, as there’d be no way to calculate sales tax anyway, since that would require a specific location in the US).
The prices don’t look to be that far off in that scenario, but the EU price would be slightly lower.
EDIT: Wait, Hungary is one of the EU members that still doesn’t use the euro, right? They use, uh…forints?
goes looking
Yeah:
https://en.wikipedia.org/wiki/Hungarian_forint
So assuming—I don’t know—that in Hungary, Steam lists prices in forints rather than euros, I’m guessing that there probably isn’t a 1:1 dollar:forint price ratio, as a forint is nowhere near a 1:1 exchange rate with the dollar.
EDIT2: Well, unless a publisher uses a 1:1 dollar:euro ratio for the price and then Steam auto-converts to forints before displaying a price to a Hungarian user or something, I guess.
Part of it is that EU countries charge VAT on digital sales and prices must include it, while in the US there’s sales tax instead, which depends on the state and is only added at checkout time (and also often lower or even zero for digital goods). For example if I pay 80 Euro in Germany, then Steam gets to keep 67 because those 80 Euro include 19% VAT.
The other part is that in a market economy, prices are determined by what generates the most profit, and not necessarily related to cost or based on fairness. EU customers apparently pay 80 Euro often enough that it makes more money than 60 or 100 Euro so developers set their price to 80 Euro.
Steam or any other digital storefront decides to price a 80€ ($91) game the same as a $80 (69€)
- Steam itself does not decides the prices.
- Regional prices is meant to be uneven, as countries have different living standards and the conversion rate is not always the same.
Question:
- European prices include taxes already. Does the US price shown with or without taxes before checkout? I don’t know that actually. This could be another factor in different price shown.
Since the marginal cost of selling additional digital copies is zero, I’d hazard that it’s priced that way because Europeans will pay that much and companies like to get money
