SACHA PFEIFFER, HOST:
These days, it's easy to download video games from an online store directly onto your PC or console. That has the obvious benefit of getting your game immediately without having to leave your house. But it also opens up some technical loopholes like price tourism. That's when players change their location online in order to buy games in countries with weaker economies. For example, instead of paying $25 for a certain video game in the U.S., a player could pretend to be in Argentina and pay just $2 for that same game. John Walker wrote about this for the video game website Kotaku, and he joins us. Hi, John.
JOHN WALKER: Hi. Thanks for having me.
PFEIFFER: John, some of our listeners may not realize that certain video games and other types of products are priced differently in different parts of the world, but that is the case. How common is that?
WALKER: It's incredibly common. It's the norm across all consoles and PC. Everything is priced locally, normally in blocks. But, yeah, regional pricing is totally the norm.
PFEIFFER: Maybe you could tell us in terms of one particular case you wrote about, a game where a particular bunch of people engaged in this so-called price tourism, and it actually helped the developers even though players were buying the game for much less than they would in the U.S. How did that play out?
WALKER: So it was an interesting case. It was a game called Let's Build A Zoo that came out on PC last year and did very, very well. It's published by an independent publisher called No More Robots from a developer called Springloaded. They've made a console version that came out at the end of September this year. And the week before it was due to come out, it was available for pre-orders on the Nintendo Switch, and they started piling in. But then the owner of No More Robots, a guy called Mike Rose, noticed that the vast majority - 85%, in fact - of these preorders were coming from Argentina, which clearly wasn't where they were really coming from.
PFEIFFER: And weren't being sold at the price they were intended to be sold at to people in the U.S.
WALKER: Indeed. So the game is roughly about $25, but it was selling for between a buck 50 and $2.50. The price moved around with the very volatile economy there. He saw this as something, you know, awful because he suddenly realized they weren't making 90% of the money from the game. And then it had this weird effect that it turns out Nintendo uniquely charts games by how many copies they're selling and, at the same time, groups North and South America together. The consequence of this was that they started seeing lots of pre-orders on this game and then more heavily promoting it to those markets, which included North America. And as a consequence, the game became very prominently featured on the online store pages for the Nintendo Switch.
PFEIFFER: What would you need to be able to try to prove the developers are losing or making more money? Would you need them to be sharing sales data, which is unlikely to happen?
WALKER: Yes. So No More Robots are very unusual in being so public with their sales data, and most places won't do it. The other problem is you face the same issue as you do with piracy, which is there's no way to prove that a pirated copy is a lost sale. So who's to say that these $1.50 purchases of the game are more than they would have made if it weren't available at all?
PFEIFFER: So if developers aren't necessarily losing out because of price tourism, are there still other negative effects caused by price tourism?
WALKER: The lack of reporting on this makes it really hard to give a concrete answer, but developers are potentially losing out, given that another popular game that's just coming to Switch this month, a game called Sifu, has pulled its Argentinean store completely. I've been unable to get them to explain why, but that store was there, and now it's gone. So you can assume that they were feeling negatively impacted. But the larger issue does seem to be that people in those locations see their prices going up, and, of course, their wages aren't going up to match.
PFEIFFER: John Walker writes for the video game website Kotaku. John, thank you.
WALKER: Thank you so much.
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