Australian consumer analyst predicts local video game prices will go down in price from around A$120 to A$70 by 2012.
In July this year, Macquarie Bank's Equities Research arm released a consumer sector report into the rise of online spending in Australia. The report, compiled from the results of various studies and surveys into the online retail market, sought to debunk the myth that the growth of e-commerce will negatively impact traditional brick-and-mortar retailing.
According to Rob Blythe, consumer analyst for Macquarie and one of the report's authors, the Australian dollar moving toward and beyond parity with the US dollar is the major catalyst for the Australian growth in online shopping. But when it comes to the video game market, online video game sales in Australia are significantly lower than in the US and UK. According to the Macquarie report and information sourced from Forrester, UK ONS, the US Census Bureau, and Screen Digest, the combined category of toys and video games makes up roughly 3.7 percent in Australia, compared to 24 percent in the UK, and 19 percent in the US.
Blythe recognizes that Aussie gamers want to shop at overseas online retailers due to better pricing, but he says there are a lot of factors that come into play that stop many from doing so.
"Firstly, a lot of console games are region locked, so if Aussie gamers buy a game from Play Asia, they end up with the Asian or US version and therefore can't play online with their Aussie friends," Blythe said. "Secondly, maybe around 50 percent of sales of a big, AAA game are in the first week. Core gamers don't like to wait; they want to be part of the whole experience of lining up for the title on the day of its release at a brick and mortar store and then going home to play it."
Blythe thinks the pricing issue won't be an issue for much longer. He believes game prices in Australia are slowly becoming aligned with other territories, as a result of publishers understanding that exchange rates will always fluctuate.
"Australia has been slow to adapt to international pricing for games, yes, but I think in the second half of this year or at the very least by early 2012, we will start to see game prices in Australia coming down. From my estimates, I predict they'll drop from around A$120 to somewhere around A$70.
"That said, Australian pricing will still be at a premium to offshore, due to things like distribution and shipping costs, but the gap won't be as significant. Economists are predicting that our currency will normalize and eventually come back down below parity with the US dollar, and when that happens, the attractiveness of buying video games overseas will be eliminated for Aussie consumers."
Laura Parker is the Associate Editor of GameSpot Australia. She loves adventure games, sparkly stuff, Trivial Pursuit, cake, Master Chief, earthworms, and rhetorical questions. She once stole a sandwich from Peter Molyneux.
This would be very welcome. If $70 is the EB Games price, then it's safe to assume Big W will be selling gamjes for $60 or less, which would be fantastic. I'll still import a fair amount though, just when I'm really eager to get a game I'll fork out a little more for the Australian copy.
I hope this is bloody true! It's about time that game prices go down. I always thought that the max price for any game should be $79 - but $70 is better ;) And I reckon sales would improve. I'm sure a lot of aussie gamers pirate because of the high prices (especially when it comes to digital downloads, like Steam gouging). I'm really hopeful this is true!!!!
@Karnya, its greed because the wholesalers insisted on price gouging. Even to the point the bookstore chains went bust due to a high price point. If they charged a more fair price similar to the US/UK ammount we wouldn't of seen both big bookstore chains go bust.
@ evilkenshin1 Just a heads up the book issue it is totally separate and not an issue of greed. Australian law maintains that if a book is to be sold in Australia it must first be offered to Australian printers, meaning most companies can never take advantage of cheap international prices and just import.
I've always said if games at retail were $70 on release day I'd buy locally every time. I'm sure most Aussie gamers would feel the same. We do want to support you, local economy, we really do, but until the price drop actually happens that 3.7% won't increase.
A$120 to somewhere around A$70. ^ if that turns out to be true, my wallet will be extremely happy.
I agree with corp-hicks1 , its very doubtful that they will lower prices unless a major game chain goes bust. We saw what happened with books (mainly due to parallel import laws refusing to allow stores to purchase from overseas) that due to high RRP and price gouging there was a collapse of two of the biggest bookstore chains in Australia at the time of their collapse there was news articles on several sites from smaller bookstores saying they had asked the wholesalers to lower the price but the wholesalers dug their heads in the sand & didn't listen. Now look at whats happened due to their greed. Both angus & robertson aswell as borders are gone.
This is absolute bull%#*t, the prices will never drop. It would be GREAT if they would, but they never will. The publishers and retailers have already got it into their minds that Australians will pay up to $120 for a game, so why would they even think about lowering the prices? I would really like to see the source for this story, as I'm have quite a hard time finding it on Google.
I'll believe it when I see it. Aus $ has been strong for quite a while with no price reduction.
First the R18 rating and now this. Seems like gaming in Australia is starting to pick up it's game. This is great news and I guess I'll be picking more games from retail than normal. Edit: Then again this from an analyst so finger-crossed but I do hope this happens
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