Why is the Expansion more expensive for EU-players than for US-players?

[gloflop.3510]

2 hours ago, Dante.1763 said:

Outrage maybe is the better word? Hmm, tone is hard to carry over the internet.  OPs post read like an angry rant to me. *shrug*

I asked the question "why" and honestly, if anet has nothing to hide, they can easily provide an explanation. Is it the VAT (as some suggested)? I do not want to dig into the VAT issue. Let me only say this much: The VAT varies across the EU a lot. It would be another issue why people in a low VAT country should pay the same price (including VAT) as in a high VAT country.

 

50 minutes ago, Rogue.8235 said:

To compare prices based solely on speculative-driven currency exchange rates is fallacious.  You really need to look at the entire economic picture and compare cross-regional purchasing power using an international standard controlling for inflation.  Per capita GDP plus other intangibles will account for wealth inequality, which the sources below do account for.

 

Sources:

International Comparison Program, World Bank

World Development Indicators database, World Bank

Eurostat-OECD PPP Programme

International Monetary Fund, International Financial Statistics

 

 

Price level ratio of PPP conversion factor (GDP) to market exchange rate

https://data.worldbank.org/indicator/PA.NUS.PPPC.RF?locations=EU-US-CA-DE-FR-DK-ES-IT-AU&start=2020&end=2020&view=bar

 

Real effective exchange rate index (2010 = 100)

https://data.worldbank.org/indicator/PX.REX.REER?locations=EU-US-CA-DE-FR-DK-ES-IT-AU&start=2020&end=2020&view=bar

 

PPP conversion factor, GDP (LCU per international $)

https://data.worldbank.org/indicator/PA.NUS.PPP?locations=EU-US-CA-DE-FR-DK-ES-IT-AU&start=2020&end=2020&view=bar

 

PPP conversion factor, private consumption (LCU per international $)

https://data.worldbank.org/indicator/PA.NUS.PRVT.PP?locations=EU-US-CA-DE-FR-DK-ES-IT-AU&start=2020&end=2020&view=bar

 

 

Included for regression purposes:

GDP per capita, PPP (current international $)

https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=EU-US-CA-AU-DE-FR-ES-IT-DK&start=2019&end=2019&view=bar

 

Conclusion:

Purchasing power is better in most of the Eurozone than the US.  Denmark is an extreme outlier (what is going on with your economy?)

Canada is is currently in an odd spot as well.  Needs more analysis to see if there is a worthy complaint for the price of a video game.

Australia is close in parity with the US.

 

The price of the game in Europe is fine.

 

 

It is a nice overview. It leads to the question "what is a fair price". I do not want to go into the topic either. It could be the explanation of anet "EU-players simply can afford more" but one could also argue that the price should base on the costs and a profit margin. In the end, it would be (in my eyes) a task for anet to explain.

[Dante.1763]

11 minutes ago, gloflop.3510 said:

I asked the question "why" and honestly, if anet has nothing to hide, they can easily provide an explanation. Is it the VAT (as some suggested)? I do not want to dig into the VAT issue. Let me only say this much: The VAT varies across the EU a lot. It would be another issue why people in a low VAT country should pay the same price (including VAT) as in a high VAT country.

 

It is a nice overview. It leads to the question "what is a fair price". I do not want to go into the topic either. It could be the explanation of anet "EU-players simply can afford more" but one could also argue that the price should base on the costs and a profit margin. In the end, it would be (in my eyes) a task for anet to explain.

And as they state on their store page they are using a flat 23% VAT for the entire EU. More than likely so they dont have to deal with a world wide Idiocy that they do in the US.

 

Your 79.99 EU is after your tax has been added <- also stated on the store page, at least thats what the other person in a thread this morning said. <- I tried to verify, but it kicks me to the US store as soon as i try and buy anything.

 

Ours(in the US) 79.99 is not. Our tax gets added after. I paid closer to 90$ USD than i did 79.99$.

 

Without the 23% Vat calculated in, you pay less than the US does. With it, you pay more than some folks here do. I Agree it sucks, ive been on the receiving end of your guyses vats quite a bit due to my love of metal music from that, but, it probably makes it way easier on anet than having to deal with 200 different countries tax systems, and 50 states as well.

[Saniyah.1984]

4 hours ago, ugrakarma.9416 said:

"1€ has currently the value of $1.1807" 

the difference is meaningless (18%). in my country 1 USD is 6x more expensive. the deluxe version cost 1/4 of a mininum wage here!. luckly im relatively  "rich" and really i dont care about prices.

 

then maybe you shouldn't add to the conversation??

[Rogue.8235]

VAT is necessary because the Eurozone is attempting to standardize a tax system for international trade amongst wildly different countries tying their disparate economies into a single currency. Complexity is a deterrent in international trade, they want to reduce that.

 

Further, Eurozone has more purchasing power than the US (except Denmark for some reason).  You're not actually paying more because it's in parity at the current price level.  ArenaNet has no control over tax structures so that can't be an issue (except with your local government).  

 

Purchasing power parity is a ratio of how far the international dollar will go in the area being examined.  In the graphs I linked, the ratios hover around 0.85 for most Eurozone countries.

 

With the USD being the pinned standard, this means that what you get with every $1 in the US, you can get the same in Europe with $0.85.  The purchasing power of the individual in the Eurozone goes further than the individual in the US.  

 

"Paying more" isn't really paying more.  It's on parity.  Now, what really throws a wrench in this system is nightmare-inducing economic meltdowns.  At that point, you're throwing most economic principles out the window anyways because sure...why not have negative interest rates...our national bank can't get any worse than the bonfire surrounded by dancing goats it currently is....

See Greece circa 2008

[Obtena.7952]

The reasons are complicated ... and not related to Anet trying to 'gouge rich Europeans' as some of the posters in this thread are trying to imply. That's just ignorant. 

Edited July 29, 2021 by Obtena.7952

[Imba.9451]

10 hours ago, Rogue.8235 said:

VAT is necessary because the Eurozone is attempting to standardize a tax system for international trade amongst wildly different countries tying their disparate economies into a single currency. Complexity is a deterrent in international trade, they want to reduce that.

 

Further, Eurozone has more purchasing power than the US (except Denmark for some reason).  You're not actually paying more because it's in parity at the current price level.  ArenaNet has no control over tax structures so that can't be an issue (except with your local government).  

 

Purchasing power parity is a ratio of how far the international dollar will go in the area being examined.  In the graphs I linked, the ratios hover around 0.85 for most Eurozone countries.

 

With the USD being the pinned standard, this means that what you get with every $1 in the US, you can get the same in Europe with $0.85.  The purchasing power of the individual in the Eurozone goes further than the individual in the US.  

 

"Paying more" isn't really paying more.  It's on parity.  Now, what really throws a wrench in this system is nightmare-inducing economic meltdowns.  At that point, you're throwing most economic principles out the window anyways because sure...why not have negative interest rates...our national bank can't get any worse than the bonfire surrounded by dancing goats it currently is....

See Greece circa 2008

But by this definition, the price of your product is entirely arbitrary and not based on what it's "worth" (using this term carefully here), but by a percentage of how much a person in an area of the world can afford to pay.

It's like those joke conversations:

A: "Uhhhh, thats a nice product! What does it cost?"

B: "Uhm.... How much do you have?"

A: "I have 100€/$/whatever."

B: "You are in luck then! That's exactly what it costs!"

[LSD.4673]

Remember the old Steam "$1 =/= €1" group? Corporations don't care. Don't buy their game and show them how you feel, or give in and let them continue to plough your mudtrack. 

 

We all know option 2 is wbat everyone goes for...

 

[Mrs Lana.2506]

Bought the ultimate edition for $89 USD total including tax. Paid $124 AUD.

Currency conversion is a kitten.

[Mrs Lana.2506]

16 hours ago, Rogue.8235 said:

Australia is close in parity with the US.

Wish my wallet could agree lol

[Dayra.7405]

Lol, that's not just for games, that's for all products/services you can buy nowadays. 

Flights/phones/computer/cars/books/pharmacy/... in no case do regional prices relate directly to exchange rates and taxes.

 

The newest hit are individual prices, depending on the info's the seller (e.g. amazon) has collected about you(r browser), you get a different price than others. Just resetting the browser/using private mode may give you a different price.

 

Goal is as always: Get as much in total as you can get. (lower price more sales, higher price more profit, find the price(s) where the total profit is max)

Edited July 29, 2021 by Dayra.7405

[decease.3215]

When busineas determind price of good.  They measure buying power.   Which is calculated through average income, price of similar product, spending habbit...etc.  And of course expenses.

 

Their gole is to milk most amount of money at the highest expense/earning ratio.  Not simply convert currency

[Xanadrine.4352]

2 hours ago, Miss Lana.5276 said:

Bought the ultimate edition for $89 USD total including tax. Paid $124 AUD.

Currency conversion is a kitten.

Ok many countries including yours have an extra tax on digital items from non Australian companies. This is your government anet has nothing to do with it. There are VAT tax GST tax streaming tax when i saw the amount of tax added on in some countries i fell out of my chair. france for instance looks like when all is said and done they are paying 28 to 30% added tax and fees. In the US the states decide to tax or not since anet is a local NA company out of Seattle our government dont have to add the extra taxing. But foreign governments do. Im lucky I live in a state that dont taxdigital yet. 

[sorudo.9054]

for an actual fair price, they should leave the pricing to actual experts.

sell it for the US price and let things like paypal do the conversion, it saves tons for players and keeps the price fair game.

[Rogue.8235]

10 hours ago, Imba.9451 said:

But by this definition, the price of your product is entirely arbitrary and not based on what it's "worth" (using this term carefully here), but by a percentage of how much a person in an area of the world can afford to pay.

It's like those joke conversations:

A: "Uhhhh, thats a nice product! What does it cost?"

B: "Uhm.... How much do you have?"

A: "I have 100€/$/whatever."

B: "You are in luck then! That's exactly what it costs!"

 

 

That's not how any of it works.  You're thinking of gold standards which the world has departed from since 1971.  

 

In terms of pricing strategy, cost-based pricing is one of many methods.  Each method helps with getting a more accurate price for the product (except odd-even pricing which is more about branding).  Cost-based pricing has disadvantages that don't work well for certain products, especially intangible ones.

 

Also, standards of living vary even within a country.  The value of a dollar gets you much further in Iowa than it does New York City.  What results in these disparities, especially on a global scale, is an extremely complex series of interactions between macro economies.  

 

Value isn't set in stone like it was way back in the day.  Value of currency is based on relativity.

 

1 hour ago, sorudo.9054 said:

for an actual fair price, they should leave the pricing to actual experts.

sell it for the US price and let things like paypal do the conversion, it saves tons for players and keeps the price fair game.

 

Since ArenaNet has not made international pricing determinations public knowledge, how can you dtermine that they do it themselves?  Out-sourcing is extremely common because companies know they don't know how to do everything in the world.  

 

Example, a hospital want's a centralized patient database.  They're going to get someone else who specializes in information system design to do it because the hospital knows it's only good at healthcare (presumably...if you live in the US this is arguable).

 

Also note, Paypal executes mark-ups for their currency exchange.  Their exchange rate is actually detrimental to the users due to the involvement of third parties (4th in this case, I guess).

[Mrs Lana.2506]

5 hours ago, Zuldari.3940 said:

Ok many countries including yours have an extra tax on digital items from non Australian companies. This is your government anet has nothing to do with it. There are VAT tax GST tax streaming tax when i saw the amount of tax added on in some countries i fell out of my chair. france for instance looks like when all is said and done they are paying 28 to 30% added tax and fees. In the US the states decide to tax or not since anet is a local NA company out of Seattle our government dont have to add the extra taxing. But foreign governments do. Im lucky I live in a state that dont taxdigital yet. 

If you bothered to read my very short comment you'd notice that the bulk of the increase has naught to do with tax and everything to do with the current currency conversion. At no point have I blamed any company or agency.

If you also did the basic maths you'd realise that $8 USD is the tax I paid, which I had already said was included.

[Imba.9451]

11 hours ago, Rogue.8235 said:

 

 

That's not how any of it works.  You're thinking of gold standards which the world has departed from since 1971. 

 

Isn't that just was I described? How can you continue your comment with describing basically the same thing I did, even when I did so in a very polemic way?

11 hours ago, Rogue.8235 said:

 

 

In terms of pricing strategy, cost-based pricing is one of many methods.  Each method helps with getting a more accurate price for the product (except odd-even pricing which is more about branding).  Cost-based pricing has disadvantages that don't work well for certain products, especially intangible ones.

 

Also, standards of living vary even within a country.  The value of a dollar gets you much further in Iowa than it does New York City.  What results in these disparities, especially on a global scale, is an extremely complex series of interactions between macro economies.  

 

Value isn't set in stone like it was way back in the day.  Value of currency is based on relativity.

 

Just because thats how it's done now does not mean that I have to agree with it.

Saying that you sell a product for, let's say 50$ in one region of the world because "hey, the average consumer there can afford it", only to reduce the price in another region of the world because "hey, better than no copies sold there, eh?" does not sit right with me, because this means than this "value" is completely arbitrary.

Especially considering digital goods are basically infinitely reproducable with 0 effort. But thats a whole different kind of beast.

[Daddicus.6128]

Because currencies fluctuate, but game prices do not. Look at the history of the currencies over the last few years.

[leila.7962]

It costs 5x more as a brazillian player..

[sorudo.9054]

On 7/30/2021 at 12:27 AM, Rogue.8235 said:

 

 

 

Since ArenaNet has not made international pricing determinations public knowledge, how can you dtermine that they do it themselves?  Out-sourcing is extremely common because companies know they don't know how to do everything in the world.  

 

Example, a hospital want's a centralized patient database.  They're going to get someone else who specializes in information system design to do it because the hospital knows it's only good at healthcare (presumably...if you live in the US this is arguable).

 

Also note, Paypal executes mark-ups for their currency exchange.  Their exchange rate is actually detrimental to the users due to the involvement of third parties (4th in this case, I guess).

paypal uses the currency rates from that moment, even if it changes for 2 cents it's updated through paypal.

the whole reason why i suggest to let it be done through an actual payment system is because they have bin doing this for years before GW2 even existed, it ones saved me about 40 euro because the exchange was done through paypal instead of their own system (not GW2 mind you)

[Crono.4197]

On 7/28/2021 at 9:53 PM, gloflop.3510 said:

As the title says, the expansion is more expensive in the EU than in the US. EU players are asked to pay around 15% more than US players. Is there an explanation why?

 

To go more into the details: The expansions costs in the standard version $29.99 in the US and 29.99€ in Europe. 1€ has currently the value of $1.1807 (ECB reference exchange rates as of today). Thus, the US-Dollar is worth less than the Euro. To be precise, the game would have to cost around 25€ if we base everything on the US-Dollar price or around $35 if we base everything on the Euro price. The difference in value increases for more expensive versions.

I don't know the reason, but it's not limited to the expansion/Guild Wars2. Most games do the same thing. Games that cost 50-60 dollars in the US will cost 50-60 euros in EU. It's been that way since forever.