Query: Why do we have different platinum prices in different countries?

[svegurok]

I know this topic was here several times but I never found an answer to it. Today I got a 75% off for 48 hours and I wanted to buy some platinum. Not that I need it but I thought, Warframe is a great game lets support it a bit. But then I remembered that there was somewhere a topic on different prices in different countries. So I investigated a bit and found out that for instance in Slovakia, where I am from, 4300 platinum bundle costs 45 Euro with the 75% discount however in Brazil same pack costs 100 Brazil reals which is roughly 23 Euro. That struck me a bit strange and I would just like to know why is it?

[DarkSkysz]

Maybe because each country has different impost policies? That's my guess...

[Asphyxxia]

Same reason why Steam offers its services in local currency where applicable. It's more convenient for the consumer. Also earning power and value of currency is different everywhere so perceived value for a digital item such as Platinum, or games in general can also differ.

[seprent]

my though is the prices of the back are all the same price and when viewed it converts it to that price for that area's major currency  going up and down to accommodate that 

i think the default pricing is under USD so it might just be adjusting price compared to the USD price idk 

[Katinka]

Perhaps direct currency exchange isn't all that they consider.  Apparently the average monthly wage in Slovakia is 91% more than the average in Brazil but most things are a bit cheaper in Brazil, reflecting that reduced purchasing power.  Source

[taiiat]

just about every Global 'Store' does the same thing. it's tuning your prices according to the relative Economy strength of each area. some areas are simply Economically less fortunate than others and if you didn't tune your prices for those areas, nobody could afford to buy your stuff.
for example in Brazil or Russia or some other Eastern European Countries, you can't just convert $60USD into their Currency and charge that because that would be ridiculously expensive compared to everything else they purchase as well as their income.

so those regions get special pricing, however to prevent gaming the system, thesedays most 'stores' have separate versions of products for these regions that are incompatible with the other regions. mainly for Software, ofcourse.

Edited October 9, 2018 by taiiat

[Tsukinoki]

Because different regions have different average incomes and ability/willingness to pay for games/in-game-purchases.
Practically every game, software, and most hardware,  is priced differently for different regions due to a variety of factors.

For instance: you can buy a lot of games cheaper in Russia than in most of the EU.
Why?  Because if companies didn't adjust their prices they would price themselves out of the market and no one there would be able to afford the prices.

Lets look at the two countries you bring up: Brazil and Slovakia.
Slovakia average wages, as of July of 2018, was 1128 EUR/Month.  45EUR isn't much of your monthly income at that point.
What about Brazil? Its monthly wages, as of July of 2018 to have as close a match as possible, was 2216BRL/Month or 519EUR/Month, slightly less than half of the average wages in Slovakia.  45EUR is a decently higher percentage of their spendable money and may not be as easily purchased.
Sure this is only one metric.  Other things need to be brought in such as buying power and similar things but average wages does play an important part in how things are priced.

If DE charged the same exact price for the two markets you would have one of two problems occur:
First is that one market might not be able to support the higher price and might not be able to afford purchasing what you have to offer.  You've priced yourself out of the market and just won't make any sales there because no one can easily afford what your selling.
The other problem is that you're pricing yourself too cheaply in one country, meaning that you're losing money because that market can support the higher pricing.  So you're now just losing money which isn't good for a company.

And its not just DE that does this.
Take a look at a number of other games on Steam and in other webstores for various regions and you'll see drastically different prices...
it is how businesses have to do their business if they want things to sell around the world and make money.

Companies charge as much as the market in a region will support, and in regions with better average incomes, and better buying power, that means higher prices, and in regions with lower incomes and lower buying power that means lower prices.

Its why such a thing as the "grey market" exists where people will go to another region, buy some software or hardware for cheap, and then bring it back to their region and sell it for a profit.  Its a major issue that affects a large number of companies and they are constantly seeking better ways to prevent such grey markets from functioning as it can cause a lot of issues.

And speaking of grey market: If you do switch your region to buy Plat/PA/UnVaultings/Whatever for cheaper then DE will very quickly put a permanent ban-hammer on your account.

EDIT: Corrected monthly wage information.  Misread table that I was looking at, as well as updated the monthly wage information to look at the same month for the best comparison.

Edited October 9, 2018 by Tsukinoki
Corrected data to be more factual.

[-.SP.-G43riel]

5 minutes ago, Tsukinoki said:

Slovakia average monthly wages, between 2000 to 2018, is 1128 EUR/Month.  45EUR isn't that much of your monthly buying power and easily affordable.
What about Brazil?  From the data I found (between 2012 and 2018) the average monthly income is 2225BRL/Month, or 522.18EUR/Monthy. 

the only problem here is that you gathered a way too large gap,  should have taken only the most recent values 2017-2018 of both countries. As those wages can fluctuate a lot during that long period, but still applies 

Edited October 9, 2018 by -.SP.-G43riel

[Tsukinoki]

3 minutes ago, -.SP.-G43riel said:

the only problem here is that you gathered a way too large gap,  should have taken only the most recent values 2017-2018 of both countries. As those wages can fluctuate a lot during that long period

I actually mis-translated the table I was looking at...wasn't well layed out and will be updating what I have written.  May apologies for confusion/misleading information.  I just don't read those types of reports often enough to quickly understand them.

Edited October 9, 2018 by Tsukinoki

[svegurok]

Prices are same for Germany as they are for Slovakia so that can't be it.

Maybe they take Europe as a single country and thus we have same prices as French, Germans, ... 

EDIT: I did change my IP just to look at the prices. Did not buy anything I was just curious.

Edited October 9, 2018 by svegurok

[Tsukinoki]

29 minutes ago, svegurok said:

Prices are same for Germany as they are for Slovakia so that can't be it.

Germany is still in the same market region (according to quite a few marketing fields) as Slovakia, as both are in the EU, so they usually get the same pricing, even if Germany's average monthly income is around 3x Slovakia's.

It largely boils down to the region you're in and the buying power inside of that region.
The EU is one such region. So is South Africa.  So is North America.  So is South America.  And so on. 
While market types (Hardware vs software vs goods and so on) have slightly different market region definitions they are rather common within a market type as generally you want to target the same markets as your competitors.
Rarely do markets go as granular as specific countries and are instead geographical areas that share common enough markets.

What companies do is try to figure out what a market can pay for goods/services, for example "What is the price that someone in North America can and will easily pay for X" or "What is the price that someone in the EU can and will easily pay for X" or "What is the price that someone in Russia can and will easily pay for X", and for different markets you get different answers.
People in Brazil can and will pay an amount lower than what people in the EU can and will pay because they get paid less meaning that if you ask them to pay the exact same amount as someone in Germany or Britain or Slovakia you'll find far less people can do it because its simply too much money for them.

The reason Germany and Slovakia have the same prices charged to them is simple: They are in the same market and the business doesn't really care to break it down past "Its in the EU market?  It gets this price..." and move on.  It creates a ton of overhead to try to break it down further than that, and usually the ROI for time spent breaking it down further isn't that good when you can get about as many sales breaking it down to a regional level as you can by breaking it down to a country level with a lot less time and money spent.

If you want a really good example of regional pricing and grey markets that spring up because of them take a look at the printer "grey-market" where, for example, people will go into Russia and buy a lot of printers and ink/toner and then bring it back into the EU and sell it for a decent profit because of how much cheaper it is to buy it in Russia than it is in most of the EU.  And that is because people in Russia simply can't afford to pay the same prices as people in the EU and if they were priced the same then very few people in Russia would be able to afford a printer at all, essentially causing lots of companies to price themselves out of the market.
Printer companies have to lower their prices in regions like Russia in order to be competitive and actually have their stuff sold in that country and not be ridiculously expensive.
its a very common problem for lots of hardware and software vendors to fight.
And the exact same thing is happening here with Plat, PA, Unvaultings, etc.

Edited October 9, 2018 by Tsukinoki

[(XBOX)GearsMatrix301]

Inflation 

[svegurok]

Still I don't think it would be that difficult considering you need few lines of code that would detect what country you are from and slightly bigger table for prices based on country. I for instance would have definitely bought that platinum for 23 euro however. I will not buy it for 45 euro.

Also I think DE would reap more money if they've done it. Just saying.

Edited October 10, 2018 by svegurok

[Tsukinoki]

1 hour ago, svegurok said:

Still I don't think it would be that difficult considering you need few lines of code that would detect what country you are from and slightly bigger table for prices based on country. I for instance would have definitely bought that platinum for 23 euro however. I will not buy it for 45 euro.

Also I think DE would reap more money if they've done it. Just saying.

Its not just the lines of code, its all the hours you have to have someone, or the money to hire an outside agency to get you the data which can be quite expensive, sit down and research "ok, how can we price things in this country vs that other country?"
And how many countries do you want to have this done for?
And remember, its not a one time cost either, things like this would take fairly regular reviews and changes which is more and more and more money spent on it.

And sure they would make some more money from doing that.  But would it be enough money to make up for all the money spent doing the research at regular intervals?  That's really the most important question.
And for most businesses the answer is that it wouldn't improve profits enough and would essentially be a money sink for the company.

Beyond that though breaking it down to a country level makes it easier to have a grey market, which could lead to further money loss.
Regional levels of marketing make it easier to block out a customer and go "Ok they are obviously in region X and bought plat using the pricing from region Y..." and go after them.
At a country level though?  Quite a bit harder.  Take someone from Austria.  They could more easily pass themselves off as someone from Slovakia and get much cheaper prices while being much harder for DE to detect.

Its a hard balancing act to strike.

[Zi-Sui]

9 hours ago, Katinka said:

Perhaps direct currency exchange isn't all that they consider.  Apparently the average monthly wage in Slovakia is 91% more than the average in Brazil but most things are a bit cheaper in Brazil, reflecting that reduced purchasing power.  Source

This. I bet they consider the purchasing power because it just makes sense. If nobody could afford the prices that would be neither profitable for DE nor fun for players, and if they were too cheap DE would lose money because the market would be oversaturated with platinum and it would be easier to just farm it and people would stop buying after a certain amount.

[svegurok]

@Tsukinoki During my time playing the prices on platinum did not change once for Europe. So no the argument it takes time to review does not hold. You just need to do it once and maybe review it once every 10 years. Also you just can't pass yourself from different country that easy if you played most of your time with Austrian IP and suddenly you bought platinum with Slovak IP that would be very suspicious and its same now. Most of the countries if not all have main hubs (don't know exact name) through which you connect to outer world from your country.

@BoarWarrior You don't get it if its the purchasing power then Europe is took as one country or region. There are like 20 countries in Europe with vastly different purchasing powers.

 

Edited October 10, 2018 by svegurok