I do wish the Wowsers would at least try to understand capitalism

All that, and it cost $100 USD less, too, coming in at $399. It seemed like Sony could do no wrong. But for all this fanfare and literal standing ovation, there\’s a problem for Australian gamers. The PS4 is set to retail at a tooth-grindingly expensive $549 because of… reasons? That\’s too much. I\’ve checked. You can too. Sony haven\’t explained their unique pricing structure yet, but it seems like a fairly arbitrary dollop of Australian tax.

Because they can.

Really, that\’s it.

A capitalist, a profit seeking corporation, will always set prices at the maximum they think the market can bear. There is no other reason for these price differences.

Both Sony and Microsoft have looked at the people of Australia and concluded that they are the sort of dorks who will pay more for a gaming machine than people in other countries will.

They may be right and they may be wrong but that is what they\’ve done and no more than they\’ve done.

12 thoughts on “I do wish the Wowsers would at least try to understand capitalism”

  1. Which is fine provided that they allow people to purchase the machines and games anywhere else in the world and play it in Australia; or not complain about people pirating rather than paying the Australia tax. But you can’t have it both ways (well you can, but the law shouldn’t protect you from pirates if you try to).

  2. Oddly the same price discrepancy doesn’t exist with iPads.

    A 32GB Apple iPad is (at today’s exchange rates) $599 in New York, $750 in London, $820 in Paris and $610 in Sydney.

  3. The Australian government has always been willing to aid companies like Sony by making it illegal (or at least legally difficult) for Australian consumers (and for Australian retailers) to buy products like this and their software directly from abroad. The single local official distributor has thus had rather more pricing power than it would have had otherwise. They have presumably received favours in return.

    I don’t find this especially attractive.

  4. The Australian dollar has fallen quite a bit compared to the US dollar in recent weeks, and certainly since those prices were set. Apple tends to set prices in local prices based on exchange rates that exist at the time a new product is released, and then not change the local prices until the next new model is released, unless exchange rate fluctuations are absolutely enormous. This means that the price of older products can vary a bit from country to country, whereas the price of newer products varies rather less. This means that Apple’s prices in Australia look cheaper than in other countries now, but they probably won’t after Apple revises its product line in two or three months, as is likely.

    (Also, there are tax differences. US sales taxes aren’t included in quoted prices. British VAT is 20%. French VAT is 19.6%. Australian GST is 10%)

  5. I wonder why they are talking about the PS4, there are more serious examples. Cars for one!

    There are also plenty of examples of distributor with sole rights extracting 100% or more on top of the US street price for various products, then forcing US online retailers not to ship to Aussie.

    One example, MSR hiking stove, $79 in the US, $150 in Aussie. It’s often cheaper to buy from the UK, paying the VAT and shipping!

  6. Michael,

    Yes, many are actually very good. Wiggle is very good for bike bits for example. Lot of good specialist online operations in the UK really. Of course, none are paying tax in Australia the tax dodging bastards etc…..lol

    In the 12 years I was away, Australian retail doesn’t seem to have moved more than an inch.

  7. UK retailers ought to take the VAT off when sending stuff to Australia – a sale outisde the EU is outside the scope of VAT, so there’s no basis for charging it.

    It’s the sort of error that HMRC tends not to mind, of course 🙂

    Presumably there’d be Australian GST on import, though? Not my area…

  8. The problem with this is arbitrage – like the Brits who do their Christmas shopping in NY, which is about 50% cheaper than London (despite the price level there being 225% of the US average).

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