The crime/problem is deceptively simple to commit; it's the consequences where the controversy arises.
*If your product, in its current, legal form is not being sold to another market for whatever reason, then that market cannot lose out, because it was NEVER SOLD THERE TO BEGIN WITH.
(anime and manga fans should know precisely what I mean, and I don't even like anime)
*Price fixing/gouging in other, non-primary (usually very poor) countries is tricky.
If a product is being sold there and at a grossly inflated price, there are a few reasons for this:
1) It's to prevent resale arbitrage. If a company sells a hot product in another country at a different price than in my country, it's automatically possible to exploit arbitrage. If I'm a retailer and the products are otherwise the same (assume common language), why wouldn't I attempt to purchase the cheaper product, and sell it elsewhere at a higher cost?
2) To combat #1, we invented Regions. Local governments also tend to interfere with commerce (usually because they want a cut of the action too. Taxes are legal theft, no matter how one rationalizes it.) in some way or another.
I'm sure our resident Australians can attest to that much.
3) Why price-fix in the first place? Not all markets are equal. The United States offers a powerful commercial force; being able to compete at all in the US retail market is extremely profitable, even today. But other markets lack money, either because the country itself is poor, has low commercial output, or even just a weak currency. Compounding this is the legal element; again, many governments will attempt to act like crime syndicates, and regulate everything.
How does this tie-in to piracy?
And thus, we arrive at this tangled mess of ethics and economics.
*If your product, in its current, legal form is not being sold to another market for whatever reason, then that market cannot lose out, because it was NEVER SOLD THERE TO BEGIN WITH.
(anime and manga fans should know precisely what I mean, and I don't even like anime)
*Price fixing/gouging in other, non-primary (usually very poor) countries is tricky.
If a product is being sold there and at a grossly inflated price, there are a few reasons for this:
1) It's to prevent resale arbitrage. If a company sells a hot product in another country at a different price than in my country, it's automatically possible to exploit arbitrage. If I'm a retailer and the products are otherwise the same (assume common language), why wouldn't I attempt to purchase the cheaper product, and sell it elsewhere at a higher cost?
2) To combat #1, we invented Regions. Local governments also tend to interfere with commerce (usually because they want a cut of the action too. Taxes are legal theft, no matter how one rationalizes it.) in some way or another.
I'm sure our resident Australians can attest to that much.
3) Why price-fix in the first place? Not all markets are equal. The United States offers a powerful commercial force; being able to compete at all in the US retail market is extremely profitable, even today. But other markets lack money, either because the country itself is poor, has low commercial output, or even just a weak currency. Compounding this is the legal element; again, many governments will attempt to act like crime syndicates, and regulate everything.
How does this tie-in to piracy?
Well, in these weak markets, to legally purchase a good, your average person will have to spend an extremely large portion of their income. The Publisher/Legal Owner/Distributor of that product cannot lower their price to match the local economy, or it will be bought out by others in stronger economies and exploited. This greatly lowers the profit potential for the Publisher in the weaker region AND it harms their profits more directly in other, much stronger regions.
This is why that game costs 3 times greater, even after adjusting for the change/value of the local currency.
Since games are luxury items, few/no sane people will do this. There's still a demand for the product, and because of piracy, there's also a supply that anyone can afford.
Now, the relationship is even worse than if the publisher hadn't gone into that weak market at all; they're spending money on product they will almost NEVER legally sell.
Now if the story stopped right there, and the Publisher decided to withdraw from that lossful-market, there would be no argument. But the story doesn't end there.
Rather than withdrawing from the market, like any sensible firm normally would, the publishers became creative, and leveraged this disadvantage against their STRONGER markets (global piracy charts are hugely inflated as a result of this) like the USA and Japan.
Piracy still occurs there as well, but nowhere near to the same degree (% of population) as in those weaker markets. Why? People can afford the luxuries there. Piracy is still common, but it's almost always among those who are either technically inclined, or kids who could not otherwise afford it (makes one wonder how so many 14 year olds ended up with R4s).
Many older hardcore gamers, besides having more disposable income are also aware that their money goes in part to the developers, and that this is supposed to encourage more games that they like. (at least, that's the philosophy I follow)
Furthermore, the effective price for those weaker markets is greater than those in the stronger markets, so the numbers on those reports are even MORE inflated!
With "global piracy" on the rise, and hundreds of millions in "losses", why it's just the perfect excuse to cut content and raise prices. The strong markets pay more for nothing, and they can't call them out on it because, hey, the Publisher is just protecting their interests!
We now have DRM that effectively spies on you and gathers info for marketing purposes. All publicly accepted (and despised) because of this HUGE piracy catastrophe!
The weaker markets? They get to stick around doing nothing but padding out those yearly piracy reports. Even though the Publisher is taking a loss there, it absolutely PALES in comparison of the gains they are making in the stronger markets as a result of this farce.
And the irony of it all, is that by going public with software piracy, and keeping it in the spotlight, these Publishers have in fact made more people aware of it, and that it exists as a possible, cheaper alternative for them.
This is why that game costs 3 times greater, even after adjusting for the change/value of the local currency.
Since games are luxury items, few/no sane people will do this. There's still a demand for the product, and because of piracy, there's also a supply that anyone can afford.
Now, the relationship is even worse than if the publisher hadn't gone into that weak market at all; they're spending money on product they will almost NEVER legally sell.
Now if the story stopped right there, and the Publisher decided to withdraw from that lossful-market, there would be no argument. But the story doesn't end there.
Rather than withdrawing from the market, like any sensible firm normally would, the publishers became creative, and leveraged this disadvantage against their STRONGER markets (global piracy charts are hugely inflated as a result of this) like the USA and Japan.
Piracy still occurs there as well, but nowhere near to the same degree (% of population) as in those weaker markets. Why? People can afford the luxuries there. Piracy is still common, but it's almost always among those who are either technically inclined, or kids who could not otherwise afford it (makes one wonder how so many 14 year olds ended up with R4s).
Many older hardcore gamers, besides having more disposable income are also aware that their money goes in part to the developers, and that this is supposed to encourage more games that they like. (at least, that's the philosophy I follow)
Furthermore, the effective price for those weaker markets is greater than those in the stronger markets, so the numbers on those reports are even MORE inflated!
With "global piracy" on the rise, and hundreds of millions in "losses", why it's just the perfect excuse to cut content and raise prices. The strong markets pay more for nothing, and they can't call them out on it because, hey, the Publisher is just protecting their interests!
We now have DRM that effectively spies on you and gathers info for marketing purposes. All publicly accepted (and despised) because of this HUGE piracy catastrophe!
The weaker markets? They get to stick around doing nothing but padding out those yearly piracy reports. Even though the Publisher is taking a loss there, it absolutely PALES in comparison of the gains they are making in the stronger markets as a result of this farce.
And the irony of it all, is that by going public with software piracy, and keeping it in the spotlight, these Publishers have in fact made more people aware of it, and that it exists as a possible, cheaper alternative for them.
And thus, we arrive at this tangled mess of ethics and economics.
