Feldon The American prices for the Destiny of Velious digital downloads are well known — the regular edition is $39.99, while the collector’s edition runs $59.99. We are very happy to see that the days of preferential treatment for the Retail version are over. Last year’s 7 day retail headstart and the confusion leading up to the launch for European customers was the source of much frustration, so we are quite satisfied with this year’s simplified options. So then all is wine and roses, right?
Well, it may surprise American players to learn that customers in some other countries are seeing prices up to 33% higher for the collector’s edition than US customers are seeing. Here is the current pricing for the digital collector’s edition outside of the US:
- UK current price is £49.99. That’s $79.96 USD, a 33.3% markup.
- Europe current price is €54,99. That’s $74.90 USD, a 24.9% markup.
- Australia current price is $74.95 AUS. That’s $74.18 USD, a 23.7% markup.
VAT or Value Added Tax is a sales tax on nearly all goods and services in Europe and the EU (not the same thing!). In fact the USA is one of the few countries without a national sales tax. VAT varies in the EU and non-EU countries from 18% to 25%. Given this reality, it is unclear how SOE is able to figure a single price for all of Europe.
- UK should pay £44.76 or $72 USD (20% VAT as of January 4th of this year).
- Europe should range from €51.92 or $70.80 USD (18% VAT) to €55 or $75 USD (25% VAT).
- Australia should pay $59.36 AUS or $60 USD (no GST or VAT).
It’s worth noting that Direct2Drive is offering the EQ2 Destiny of Velious regular digital download for £29.95. That’s $48.20 USD. That’s almost exactly $39.99 USD plus 20% VAT.
A Search for Answers
Over the last 3 weeks, a pointed but mostly polite discussion has developed on the EQ2 Forums in two separate threads. Players have been trying to get to the bottom of the issue, debunking a few myths posted out of ignorance, and seeking a response from SOE .
- Why is DoV pre-order far more expensive for International players?
- Who should international players contact about inflated prices?
Today, we have at last seen a statement from Brasse at SOE on the issue:
A number of our international consumers have communicated concerns as to our conversion pricing for products such as EverQuest II: Destiny of Velious. Our objective is to serve our international consumers by offering fair and competitive pricing in all the countries we serve.
We want to share with you some of the details that factor into our process for international pricing.
The most influential factor beyond the exchange rate itself is the tax rate charged in most markets. For example, our European prices are inclusive of a 20% VAT Tax that SOE must pay on all orders, including subscriptions. The VAT rate is inclusive in the price, whereas US players pay applicable sales tax in addition to the price. In other regions, taxes range from 8% to 20% as well.
We also take into consideration the pricing of similar products in the market and do our best to ensure that our prices are competitive. It is our belief that a review of competing MMO pricing in other markets will show that SOE’s pricing is very competitive. Finally, SOE bases its conversion rates off of a 6 six month average of rates, on a quarterly basis. This allows us to keep pricing consistent. In many cases over the past year this process has actually created an overall exchange loss for SOE.
We welcome your feedback on this matter, and we are listening. As a result of feedback we have already received from you, we are in to the process of reviewing pricing for the Australian market and will report back in the near future. SOE expends a considerable amount of effort to ensure that we treat all of our valued customers equally.
What Should it Cost?
The point that seems to be missing here is that these are Digital Downloads. There are no manufacturing costs, shipping costs, wholesale price structure, etc. SOE gets the whole enchilada, the entire $60.
In years past, customers in Europe have either had to pay a fortune for overnight shipping from the US, or have someone buy the box in America, rip it open, and read the product code over voice chat. In all these cases, SOE probably got about $25 a head for the regular edition and $50 a head for the collector’s edition from each European or Australian customer.
Even if SOE lowered the price outside the US by 10%, SOE would STILL make more money per customer than they have in the past.
A key point to these discussions has been the ability to pay in US Dollars and let their bank sort out any currency exchange rate differences or taxes. This ability was lost over 18 months ago.
It seems we’ve gone from “We can settle for $50 per person” to “We must get $60 per person, plus VAT, plus exchange rate, plus any other fees”. Just personally, it seems a bit foolish to be so rigid with the price at this point.
What Are Other Games Charging?
So how much is the upcoming Rift by Trion Worlds going to cost?
- $59.99 in the US
- £39.99 in the UK ($64.25 USD) including VAT
Trion Worlds have clearly chosen to take a small price hit to offer a more equitable and attractive price for customers in the UK.
It’s Not Just Taxes
A curious footnote to this story is the two different Customer Service Representative responses that one customer received. First, the standard boilerplate response that most people get:
Hello,
International prices are based on currency exchange rates as well as international tax and trade laws, and other factors. We aren’t charging different prices for different areas just because we think nobody will notice, in fact it would be much easier to just charge a flat price everywhere. Unfortunately that’s just not possible.
If you have any further questions, please feel free to contact us back for further support to your questions.
Thank you
Customer Support Representative
What follows is the startling revelation provided by a different CSR (whose employment status it’s best not to speculate on):
Greetings,
I’m sorry for the incorrect information in our last response, but the price does vary between different regions. The prices are set by the marketing department and isn’t something we control here in customer service but I will make sure to forward your concerns to the appropriate party. While I can’t say whether or not this will change in the future, I can at least make that group aware of your concerns. Let me know if you have any questions.
Regards,
Customer Service Representative
NOTE: These comments were submitted to a customer by a CSR without any confidentiality or other privacy agreement. They were originally posted in the Why is DoV pre-order far more expensive… thread by the customer who received them until they were deleted 72 hours later. I provide a screen shot of the post in question.
Special thanks to M and Daffodil.
It is common knowledge in Australia that GST does not apply to online purchases outside the country. Infact there has been alot of commotion in the news from our local retailers about it.
Also if your charged gst you need to be issued a receipt stating the gst, as a business can claim back that gst charged etc. No gst receipts issued here.
In short Sony isn’t showing any signs of charging the gst, and if they are they shouldn’t be as they aren’t supposed to under Australian law.
Steve,
Thanks, Fixing that part of the article immediately. Do you know what the cost and any applicable taxes in NZ are? Also the cost of Rift digital CE?
Just checked Rift is $49.99normal $59.99collectors – Doesn’t say aussie currency specifically (though our 2 currencies are so close conversions no issue atm) It is a aussie specific page I viewed though as it has a aussie rating logo https://au.riftgame.com/en/products/index.php
As for NZ not a clue of their laws sorry. As for Aussie gst – only an Australian Business has to charge gst. Purchases made by aussies to overseas are gst exempt up to $1000. For example I import from amazon all the time and legally there is no tax on the product. Retailers over here have had a whinge about it last month.
Our laws are likely different to Europe I hope they aren’t confusing SOE and giving them an excuse to pocket another 10% from us for no reason.
Rift looks very interesting – of note their subscription plans are much cheaper to. Not sure if they are US or AU but $15/month is good (and $10/month for 6 monthly).
SOE recently launched DCUO charging AU $20/month to play.
I think its time for me to try something new – was already thinking of dropping eq2 after many years this may have sealed it if its a good game.
and those rift prices for subscriptions are on the au.riftgame.com site so thats what we’ll be charged
Its funny I hadn’t done any research on Rift and hadn’t intended to get it – then just from reading their website I got much more excited for it than I was for velious and ordered it. And its cheaper for the new game to than it is to get an expansion – rediculous.
Here in Sweden, prices are
Collectors Ed. 499 SEK or $77.40 USD
Standard Ed. 349 SEK or $54.13 USD
The big question they should be answering is, does SOE (have to) actually pay even one cent VAT on Digital downloads outside the US?
The whole VAT claim is a load of bull as shown by SteveT (and applicable to other countries). For Swiss customers, the current markup for a normal subscription is 28%. Now, the subscription services are provided outside of Switzerland since the SOE’s servers are outside of Switzerland and they are not providing the network access to those servers themselves (that’s a service of the ISP). This means that no VAT applies to SOE for their subscriptions. But anyway, even _IF_ they had to pay VAT, the VAT is only 8%, leaving a markup of 20% that is unaccounted for.
They just rip us off, there is no legitimate explanation.
I could be wrong since I’m no lawyer, but doesn’t this somehow constitute fraud? I know that as a company, SOE can charge whatever they want for goods and services, but to indicate that a markup on price for international customers is bacause of tax, and then not paying the tax in the case of AU customers, and others mentioned (charging a markup of 28% VAT when it’s only 8%). Curious indeed.
So they want an extra $5 in the UK and an extra $15 in Australia. If they want to be greedy that’s one issue. But to try to plead helplessness against government taxation is nonsense.
NZ is the same as Australia as far as GST goes, no GST on internet purchases. Strangely, although I’m based in NZ I get charges subs and was able to buy the expansion through SOE in USD… lucky me I guess?
I can’t help but think it’s just another sign of SOE getting greedier and greedier. Pretty ridiculous.
To me it’s not just the £5. It’s the statements that SOE are somehow powerless to adjust prices. They have more latitude than you think.
They do have to pay VAT which is 20% on average for most EU countries, other then that they have a moving exchange rate. If the markup is 15-20% then its a bit fishy, but 8% is just statistic noise over 6 months of exchange rate changes.
I know for example that last year the dollar went from 1.4 to 1.65, before that it went 2.1 to 1.4, its been fairly stable recently and bounced 1.52 to 1.62 recently.
Despite that the UK is a bit of treasure island for most companies (at least that’s what car companies call us since they wildly overcharge for new cars in the UK compared to the continent). Companies like Blizzard also charge a lot more for digital services then the exchange rate seems to show, although the VAT is a bit fierce, I reckon they err on the side of greedy in general with their prices vs the US.
btw I can confirm rift prices are in US dollars to aussies – didn’t say the currency on the page but got charged $US when I preordered it. (Since Aussie dollar slightly over US atm comes out equalish after conversion cost)
That I like to see – I much prefer paying for services in america in $US – let the markets decide the conversion rate for us.
This is not just a sony issue btw – some (and only some – Activision is 1 that comes to mind) companies on steam prevent us buying product in $US and charge rediculous mark ups for being Australian. Others charge the US cost and is very fair.
What people conveniently forgot to mention is how much more expensive ALL games are here in Aus than in the US. Typical new release console games, for example, retail for around the $110-$130 range. Pc games are usually $25-ish cheaper. We even get many of them AFTER they are released in the US. We also pay more taxes and checkout chicks can make $23+ per hour. If you pay in Au$ (or your local currency) be prepared to pay local market prices.
As for comparing prices for Rift: compare to an established game like WoW, not a venture hoping to get enough subs for a part 2.
From memory you used to be able to “home” your account to the US and pay in US$. It might be worth checking out, or just buy from D2D.
The pathetic part has 2 pieces: SOE trying to justify regional market pricing, and people expecting them to. This would be the cheapest entertainment for my wife and I at twice the price when two movie tickets set us back $46 (3d Vmax @ Event).
D2D doesn’t have the Collector’s Edition.
I don’t buy retail games anymore for that reason Striinger. Even importing new console games from the UK saves a fortune and they are the same region us us. Also JB/Big W usually mark new releases down to $80. Which still sucks but not in the range of $110-130 only people with no sense of money pay those prices. But that is off topic and doesn’t matter here so much those are other campaigns.
I know I used to pay in $US for EQ/EQ2 till sony changed it a few years back. Much preferred that.
Just don’t buy the expansion then guys. I won’t be, nobody rips me off wether I like their product or not. Vote with your wallets, it’s the only vote that counts i’m afraid.
Annoying thing is that it is not impossible for SOE to charge in USD. While my account information says my currency is Euro, my subscription is still charge in USD and when going to the pre-order page the price of DoV is shown in dollars as well. The only thing being charged in Euro is SC…
When pre-ordering it shows the usual price of $ 59.99 for the collectors edition and $ 12.00 VAT (even though my country has a 19% VAT-rate). This shows that SOE is perfectly capable of charging international customers in Dollars, but that they choose not to (apparently I have slipped through the cracks).
As for the comment that VAT does not apply because the service is not provided in the country of the customer (because servers are abroad), I do know that at least in my country the location of the servers does not matter. For deciding if VAT applicable the country where the service is enjoyed is the relevant factor, which in this case is the country where you play the game. Not sure how much this differs between European countries, but I suspect that this will be largely the same.
SOE could easily drown out this topic by posting a bunch of info about Velious. 🙂
SOE have acted on the pricing for UK and AUS consumers http://forums.station.sony.com/eq2/posts/list.m?start=0&topic_id=494768�
Quote from the linked thread:
——————-
UK Customers:
The DoV collector’s edition is now priced at 44.99GBP. The standard edition remains at 29.99GBP. Both prices include the required 20% VAT Tax.
Australia:
The collector’s edition is now priced at 67.95AUD. The standard edition is now priced at 45.95AUD.
NOTE: Customers who have already pre-ordered will be charged at the new lower rate.
————-
Note perfect but more akin to the aussie surcharge we are used to (Our subscription is a few $ more per month too)
EQ1 is too expensive to play. I seriously think that Sony should charge all player $5 USD for normal servers and $10-15 a month for special servers. All expansions should be $10.
If Sony doesn’t change they will lose the potential of their game branding or even the department that runs MMORPGs.
Sony needs to do the price scheme I have suggested and put it in concrete. People will take it or leave it. Eq1 is still a good game even though the graphics is dated. Eq1 is the most sophisticated MMORPG on the market.