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back to article What do you mean WHY is Sony PS4 so pricey in Oz?

You'd think that Guardianistas would know something about capitalism: they are so critical of it after all. But no, in the G's new Oz site we find the same gormless no-cluebat ignorance that we get in our own dear and beloved home version of the paper. To quote the Down Under edition: Why is the PS4 so expensive in Australia …

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Errrrm

I think the point that The Guardian Down Under was that general capitalist greed was the reason for the higher cost. Or was it too subtle for El Reg?

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Joke

Re: Errrrm

The extras for the BBQ and Fosters Gold included with every purchase.

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Re: Errrrm

Indeed.

And I think The Guardian's point might be that it's not a good reason. Just a thought.

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Anonymous Coward

Re: Errrrm

You don't do irony much then?

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Re: Errrrm

"And I think The Guardian's point might be that it's not a good reason. Just a thought."

Problem with a 'good reason' is that it differs from entity to entity. To Sony a good reason is because the market will bear it. To the Guardian, a good reason is any story that sells more papers. To the consumer a good reason is a low price.

When deal with morals or what is 'good' or 'bad', it is entirely dependent on your viewpoint and your position in the transaction.

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Re: Errrrm

"And I think The Guardian's point might be that it's not a good reason. Just a thought."

And I think El Reg's point was that it is a good reason for Sony, regardless of how outraged it might make the journos at the Graun. As a business, Sony's raison d'être is to make as much money as they possibly can.

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@Mad Mike

Fosters?

You wouldn't be caught dead with that muck down under. You'd be turned away from the barbie if you turned up with a six pack of Fosters mate!

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FAIL

Re: @Mad Mike

> You wouldn't be caught dead with that muck down under. You'd be turned away from the barbie if you turned up with a six pack of Fosters mate!

So to summarise: Australians don't mind selling piss water to other countries, but complain when they themselves get screwed over. Oh well.

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Re: Errrrm

"As a business, Sony's raison d'être is to make as much money as they possibly can."

That was a pre-requisite of the point being made - something Mr Worstall appears to have missed by some distance. These are getting a bit tedious...

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Law
Pint

Re: @Mad Mike

Australians wouldn't give a Castlemaine's XXXX for anything else... !

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Are you being ironic?

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Anonymous Coward

Re: Errrrm

I'm assuming the Xbox One pricing in Oz will get equal coverage...

You might have noticed, Oz is the assend of nowhere, everything is expensive. The PS4 will be cheaper than the Xbotch DRMone.

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Re: @Mad Mike

Bogan tax :-)

As for aussie food and beer (think fosters is piss, try 'bud'). They have pretty high standards for freshness \ quality, most wouldn't touch the shit for sale in the US.

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@Justin Stringfellow

"Australians don't mind selling piss water to other countries, but complain when they themselves get screwed over."

No sense wasting decent beer on plonkers who wouldn't realise the difference, is there?

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Re: @Mad Mike

>> > "You wouldn't be caught dead with that muck down under. You'd be turned away from the barbie if you turned up with a six pack of Fosters mate!"

>"So to summarise: Australians don't mind selling piss water to other countries, but complain when they themselves get screwed over. Oh well."

I seem to remember when Fosters was first around, it was imported and (at least to my adolescent tastes buds) better than the later non-imported version.

'Brewed in the UK under licence....' typically seems to indicate something a step or two worse than the original product, whether that product was good or bad.

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Re: @Mad Mike

Got it in one

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Two reasons

On the first reason, you're spot on: charge what the market will bear. The second is to wall-up "the" market so it has no alternative via anti-free-market laws: i.e. ban grey imports.

So free-market pricing set the price, but requires non-free-market laws to maintain it.

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Unhappy

Re: Two reasons

You have hit the nail on the head. Big business likes the free market, but only as long as it favours them. If it starts to favour the consumer then they get their tame politicians to introduce artificial constraints on trade.

Or introduce their own constraints (such as region coding) and then get those same bought-and-paid-for politicians to back it up with draconian law (DMCA, for example).

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Re: Two reasons

>>"You have hit the nail on the head. Big business likes the free market, but only as long as it favours them. If it starts to favour the consumer then they get their tame politicians to introduce artificial constraints on trade."

That does rather depend what version of 'freedom' you choose to consider the definitive one, something which, despite appeals to 'principles' will, for most people*, be likely to include a meaningful element of personal bias.

(I'm not excluding myself here, though I do try and avoid claiming 'principles' as if they were some sacred standalone things when in fact they seem to largely be post-hoc generalisations attempting to support one or other person's particular opinions at a particular point in time.)

Unless they're abusing a monopoly on something people actually *need*, rather than on some non-essential luxuries, why should a company not be 'free' to make calculations for any particular market about expected returns at various prices and choose prices accordingly, leaving consumers 'free' to choose whether to buy the product or not?

If a company was making perfume which was sold in the UK expecting to go for ~£50/bottle, why should they not be free to sell it cheaply enough in Colombia to retail for $10/bottle in Bogota if they can make extra money doing that, and free to refuse to supply Colombian wholesalers who were going to export it?

It's not as if anyone actually needs expensive perfume, or that there aren't other perfumes around, and if a meaningful amount of the perceived value in the UK comes from expensive advertising, why should the company let someone else make money on the back of advertising they haven't paid for?

If something is a luxury and perceived to be a rip-off, then people should:

a) not buy it

b) make it known why they haven't bought it

If the people are sufficient in number, that may get taken into account in future pricing decisions.

Pretty obviously, just doing something like buying a games machine for a little less from elsewhere isn't actually likely to make manufacturers see much need to change to equal pricing even if they're aware of it happening, since they still made decent money from the complainer as well as making money from the rest of their purchasing countryfolk at the higher price, and so dropping the higher price would necessarily have involved making less money.

If I don't have a monopoly on some essential products or services, why should I not be allowed to choose who I sell them to, and at what price, based on whatever criteria I choose, as long as I don't fall foul of discrimination laws?

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Re: Two reasons

> If I don't have a monopoly on some essential products or services, why should I not be allowed to choose who I sell them to, and at what price, based on whatever criteria I choose, as long as I don't fall foul of discrimination laws?

You're talking about choice though.

The grey import laws are about reducing choice.

It's a long reply, but I think you missed the target by a mile. If a company wants to charge different prices for their products in different regions, they're free to do so. That's free-market economics. The poster's point was that in a global market, that only works if the law intervenes to prevent competition from setting a market rate for the product by allowing importation by others. That's really a step too far for a lot of people, including me.

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Not just Australia

http://www.bbc.co.uk/news/magazine-22868787

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Re: Not just Australia

USA$399 ~ UK£254

Add 20% and that gives us an on-the-street price of about UK£305. I don't think anyone would moan about a few pounds here or there (transport costs, slightly different regs etc). But £45 (13%)?

In the past I have bought bike parts from the USA for a Japanese bike. Including courier and import duties it still works out about 33% cheaper. Madness. Utter madness.

And why does it happen? Grey imports are often blocked at the EU level. Competition and free trade are not permitted.

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Boffin

Re: Not just Australia

There's also the nuances around EU warranties too. The US tends to get a bit of a raw deal when it comes to warranty periods (I think it's less than a year?), whereas the EU gets 2 years. The UK gets the convoluted 6 year version too, but a lot harder to prove.

This instantly increases the cost to global manufacturers

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Re: Not just Australia

US warranties for the majority of things I have owned are 30-90 days(unless you purchase a ripoff service contract). Some companies like Nintendo give longer if you register(I think its 6 months).

Its always amazing how many times something will break down like 2 days after the warranty is up.

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Re: Not just Australia

Sony usually gives you a year.

At least the Warranty on my Vaio was a year and IIRC the PS3 was also a year. They didn't give me any shit when I had to replace my LCD in the laptop twice either, which was nice compared to the hoops Id had to jump through with HP a couple of years before.

I did buy both products from a Post Exchange though, and their warranty may be different for the Armed Forces than for the general public.

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FAIL

Re: Not just Australia

The warranty issue is a major red-herring.

Seriously, how many consoles fail in the second year?

If it were a lot, the manufacturers would deserve a good beating. My Core2 has lasted for years with a very hot graphics card inside in a room which hits 38C regularly in summer. If consoles, which normally sit under the telly in the most temperature-controlled room of the house can't last that long then there is something wrong with QC.

I simply don't believe it.

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Re: @Mad Mike

It goes beyond VAT, theres also possible import duties and as others have mentioned warranty \ support costs and volume. Plus then they round to the next highest 'pretty' number. Plus there is the issue of American consoles being subsidised by other markets due to it's size, i.e. win the american market and win the world (if it makes you feel better drug pricing is the other way round, the American health system subsidises the rest of the worlds drug r&d).

If you don't like the price don't buy it. It's a luxury, you don't need one. If it doesn't sell at the release price they will drop the price. If it does and you think it's too expensive then it isn't for you. They price by region differently because theres some cost difference but also because they can, and they can because people let them. They complain about it being expensive or price inequalities but enough still buy one. Capitalism works both ways, if you want to change it, don't buy one until it hits a price you think is fair or buy a different console. If it sells like a steaming turd you can bet they will change the pricing. If it sells like a cookie at glastonbury do you think they will change anything?

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Ugh

Sony needs to keep the goodwill of gamers on their side.

If they balls up - I admit it would have to be a sizeable balls up - then Microsoft with their pools of money are going to catch up.

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Re: Ugh

To be fair, the Xbox One (surprised I'm sort of defending it) is similarly overpriced @ $599AU, so it's not just Sony that this article should be aimed at, even thought the increase in price is greater on the Sony console.

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I read as far as

We gingers are supposed to be bright to make up for our hideous genetic deformity.

*that's the precise point I spat food all over my desk

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Happy

Re: I read as far as

I managed as far as:

" the rush of blood to the head from spending your lives upside-down"

Great stuff.

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Happy

Re: I read as far as

Cost me a keyboard too!

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So?

When you're dealing with basics that everyone needs, there might be some point to the story. When dealing with luxury items, the answers simple. If you want it and are willing to pay that price, buy it. If you're not, don't. Nobody has the right to a product at the the price they're willing to pay. Of course, there is an alternative. Move to where it's cheaper, but I suspect that will be more expensive.

If you don't buy the console at this price, Sony will quickly reduce the price or decide they don't care about the Australian market.

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Re: So?

The problem is this:- it will sell.

Yet they probably won't have a real debate about selling more at the correct price. They'll just assume they're making more money by gouging the Australian people.

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Re: So?

That's up to Sony then. If they dropped the price a bit, maybe they would sell 10x more. That's up to them and their gain or loss depending on whether they make the right decision or not.

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Re: So?

You think they haven't thought fairly hard about what price point to set in order to generate the maximum profit? I think they probably have, they've probably even factored in how they will drop the price in 6 months time, just after xmas, and again some time after that.

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Re: So?

If there's any evidence we need to see that companies don't think fairly hard, look at the Xbox One's reception.

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JDX
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"they probably won't have a real debate about selling more at the correct price"

Yet they probably won't have a real debate about selling more at the correct price. They'll just assume they're making more money by gouging the Australian people.

There IS NO "the correct price" you idiot. That's the whole bloody point. Even if there were, it wouldn't be the same price everywhere... if you sell it for $500 everywhere then it is cheaper for people in countries with higher salaries, that's not fair for people in poor countries...

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Re: "they probably won't have a real debate about selling more at the correct price"

@JDX

It's got nothing to do with fairness. If a company is selling its product at a rock bottom price in some poor country then that price is usually the bare minimum the product can be sold for whilst still making a profit for the company. There are some complications such as poorer countries having lower standards of consumer protection so money can be saved on warranties as well things like lower distribution costs. Overall though it's rare that a company sells its product at a loss in a poor country simply to gain some market penetration / brand awareness / do the poor buggers a favour. My point is, if you're paying extra in a rich country most of that extra cash is pure profit to the company and they charge it simply because the market will bear it.

@Mad Mike

I'm inclined to agree with most of what you said. However, I don't think people should be forced to move to where luxury items are sold for less. They should be able to buy their goods from regions where the products are sold at a lower price. More specifically, resellers should be able to source goods from regions with the lowest price without being hindered by artificial trade barriers (i.e. grey-import bans).

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Re: "they probably won't have a real debate about selling more at the correct price"

Don't consoles make f*ck all profit anyway because it's all in the games?

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Anonymous Coward

Re: So?

You need to read up on market segmentation. If you lower the price, the people that would've paid more will be paying less. If you can keep them paying more, and lower the price later , you'll get even more sales than just having a fixed lower price

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Facepalm

Re: So?

I've spent a bit of time in Oz, and the raw "Charge what you can, whenever you can get away with it" runs the range from luxuries to necessities.

Funny how petrol prices (and just about everything else connected to them) rise significantly around the holidays when everyone is gallivanting about on family visits and the like. Rent? You'd think you'd get solid gold taps for what is charged down under. Etc.

And funnily enough the few politicos who do try to impose limits on this behaviour get shouted down by the people who complain the hardest about the cost of living in Oz. Funny old country....

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Re: "they probably won't have a real debate about selling more at the correct price"

I'm not sure that you can say its logical to suggest that there is "no correct price" and then suggest that selling at the same price everywhere is "unfair" to poor people.

The point is that companies have to operate within the law. It would be quite easy to fix the problem. You just make companies honour transferable warranties on kit bought anywhere and don't give governmental protection to official vendor channels.

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JDX
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Re: "they probably won't have a real debate about selling more at the correct price"

I was being sarcastic, to highlight that even if they did sell it the exact same price everywhere, some people would still complain.

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@Piro

>>"The problem is this:- it will sell."

Then the 'problem' is really that not enough other people decided a product is overpriced enough to be worth avoiding. Or in other words, the 'problem' is that the opinions of the majority outweigh the opinions of the few

>>"Yet they probably won't have a real debate about selling more at the correct price."

The 'correct' price is whatever they choose to sell it for, not what you want it to be sold for. It's their product, not yours.

They may not be 'fair', but that is their prerogative.

And why would they want to have a debate with a bunch of Kevins?

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Landfill devices

Yup. Apple charge over the odds for the iPhone down under, but there's no "Australia tax" on unloved landfill Android devices. They've worked out that Australians are willing (and able) to pay more for premium products.

Thanks to your higher wages you still end up better off. Whinging Aussies....

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Anonymous Coward

Re: Landfill devices

Thanks to your higher wages you still end up better off. Whinging Aussies....

Though a commentator on a business program I listened to recently pointed out that after around 20 years of uniterrupted growth along with the accompanying rise in living standards and expectations then Australian had started to reach the point where it was pricing itself out of the market!

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Anonymous Coward

Re: Landfill devices

Obvious fanboi troll is obvious

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Re: Landfill devices

Obvious fanboi troll is obvious

I wish people would stop repeating these pat little phrases. They add nothing.

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