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The EU says Steams current store geoblocking system will break the law when it changes in 2020, asks them to change it before that happens

Master Disaster

Because of the many varied currencies across Europe and their varying values Steam employs a geoblocking system where keys bought in certain regions can only be used in those regions, this is done to prevent users from buying cheap games from other regions. The EU has said that this is wrong and customers should be free to find cheaper deals from inside the EU if they wish. They've also named 5 publishers who have geoblocking deals with retailers in place.

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European Steam users’ game-buying experience may be about to change, as the European Commission has taken aim at Valve’s regional European pricing schemes and practice of geoblocking activation codes obtained from other countries. They’ve also singled out a number of major publishers, including Bandai Namco, Focus Home Interactive, Koch Media, and ZeniMax Media (parent company of Bethesda) for making geoblocking arrangements with Steam and other game distributors.

Here's the statement...

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“In a true Digital Single Market, European consumers should have the right to buy and play video games of their choice regardless of where they live in the EU. Consumers should not be prevented from shopping around between Member States to find the best available deal. Valve and the five PC video game publishers now have the chance to respond to our concerns.”

Current rules only apply to physical sales however this will change in 2020 to cover digital sales and when that happens these deals will be illegal in the EU. Valve could face a potential fine of 10% of their annual worldwide turnover in they don't act before the change.

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Currently, EU anti-geoblocking regulations only cover physical media, but the European Commission will likely expand the laws to cover digital media in 2020, so they’re basically warning Steam to make changes now, before things get ugly. If a company like Steam is found in violation of antitrust laws, they can face a “fine of up to 10 percent of [the] company’s annual worldwide turnover.” So yeah, Valve is going to be taking this seriously.

This could be bad news for poorer countries in the union as the likely result is every game will cost the highest amount in every region. It could also end the huge grey market key reselling business as a lot of those keys are bought in cheaper regions and resold.

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What this will mean for European Steam customers isn’t yet known, but, in all likeliness, it will mean standardized prices across the EU. This might be a good thing for many Euro buyers, but others, particularly those in places like Poland, may end up paying more. This will also hopefully alleviate some of the confusion surrounding key resellers and retail key boxes.

Source - https://wccftech.com/steam-geoblocking-eu-antitrust/

 

God damn the EU is on a huge powertrip right now, meddling in everything. RIP cheap game keys from 2020 I suppose.

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There is only one currency in Europe.. that’s the euro.. (besides UK with the GBP and CH with Swiss franc)

 

But I say let us! Finding cheapest deal is always rewarding !

 

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6 minutes ago, Stormseeker9 said:

There is only one currency in Europe.. that’s the euro.. (besides UK with the GBP and CH with Swiss franc)

 

But I say let us! Finding cheapest deal is always rewarding !

Nope...

 

The Pound, the Euro, the Swiss Franc, the Danish Krone and the Swedish Krona.

 

Also 1 Euro in Poland is worth more than 1 Euro in Germany because the cost of living is higher.

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24 minutes ago, Master Disaster said:

Nope...

 

The Pound, the Euro, the Swiss Franc, the Danish Krone and the Swedish Krona.

 

Also 1 Euro in Poland is worth more than 1 Euro in Germany because the cost of living is higher.

Yes, but you could also argue the games are overpriced in Germany - they cost 60€ when in the US they would cost 60$. I think this will result in some sort of middle of the road solution where games are a bit cheaper for richer countries and a bit more expensive for the poorer countries. Of course, I hope the prices just go down to match the lowest EU price. Or maybe it will be exactly like it is now, but you'll be able to buy games from different regions of the store for a lower price... if nothing else it cuts out the middle man in gray market reselling, which you can't really stop.

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Woohoo, now everyone pays the expensive price.

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1 hour ago, Master Disaster said:

God damn the EU is on a huge powertrip right now, meddling in everything. RIP cheap game keys from 2020 I suppose.

That is not the Problem!

I see that there is a value in it and a good reason to do that.

 

BUT: I also see the downside!
Just look at for example the Wolfenstein franchise!


Because that would mean that the EU forces their rules on everyone!!
And the German Version is what you all have to endure...

 

 

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I can see the problem here, but IMO it's once again question of greed. It's not a new thing (actually one of the oldest things) that one of the corner stones of EU is the free movement of goods and services and people already use it a lot for their gain and so far quite few companies are really mad about it. Like I just booked a trip to Estonia for May just to get some cheaper beer and other alcoholic drinks because it's far more cheaper than buying them from Finland (24 cans of III-beer costs around 20-30€ here while in Estonia the same beer packs but with more alcohol (A-beer) costs 15-20€ (exactly same packs would costs in Finland around 30-40€ easily, but because they would be that expensive they are not in sale)). And apparently it oesn't even hurt the Finnish breweries that Finns go buy their beers from Estonia with around half the price. And what I have heard it's not that rare for people living near borders to go do their shopping in neighbour countries for the same reason (what I have heard Finland and Norway share this a lot, Finns working in Norway and Norweigians shopping in Finland).

 

I can see that companies keeping the same price scheme would be loosing a lot of money, but then again the 60€ pricetag for games is so much bullshit today in the first place. Even the most voiced supporter of that pricetag, Extra Credits (from who I have seen writing or making a video), has stated how much bullshit it actually is, you don't neet to sink three times the development budget of a game to market the game today, it's magical how easy it is to get marketing today and it doesn't have to include pop-up restaurant in the most expensive place on earth.

 

@Stefan Payne Can't see that happening. In that case Germany would need to get their laws EU wide and you can see how well other EU countries took the UK porn pass in the 2008 when it was presented first time by UK to be EU wide thing. And what I have heard germany has already started to loosen up those laws and this probably would be the last straw to ditch them completely just because they would be impossible to enforce.

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What's hilarious to me is that this will just default to the most expensive price.

 

The spirit of this is to make it easier for people to get cheaper games, or at least a more fair deal, but it won't result in that. Because, why would they? Companies will just default their games to the highest price in the region, and eat the loss in sales in poorer areas, or areas where the game might be older, and the price having been reduced over time.

 

To me, just another example of how governments routinely don't understand how businesses work, and end up hurting people more than helping.

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Yet another way the EU will end up fucking people over: forcing countries where the keys are cheaper for valid reasons to become more expensive because Valve will have to comply with those laws.

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Thats good. I hate geoblocking. We live in a global economy, these companies need to stop acting like global trade isn't a thing. Imagine not being able to buy anything on ebay from another country. I just bought some stuff from an online international market a few days ago.

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8 minutes ago, poochyena said:

Thats good. I hate geoblocking. We live in a global economy, these companies need to stop acting like global trade isn't a thing. Imagine not being able to buy anything on ebay from another country. I just bought some stuff from an online international market a few days ago.

Except that the geoblocking is in place to make the content affordable for those in poorer regions.

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3 hours ago, Master Disaster said:

God damn the EU is on a huge powertrip right now, meddling in everything. RIP cheap game keys from 2020 I suppose.

 

2 hours ago, Stormseeker9 said:

There is only one currency in Europe.. that’s the euro.. (besides UK with the GBP and CH with Swiss franc)

There are many, many currencies in Europe, and even within the EU there are more than two.

 

 

2 hours ago, PrinceNorris said:

I hope those regulations don't destroy the country economics from inside. Oh well… we all know how that will end.

Which regulation? I think many of you are missing the point: this isn't regulation, this is companies exploiting a gray area because internet. The EU is, above all, a unified market. It applies to goods, services, and labor. Roaming was done away with for this reason. Workers can move around and work everywhere. Cross-border trade is just within-border trade inside the EU. Geoblocking within the EU is insane from every possible angle. From a market perspective, the EU is (legally) as integrated as the US, and while charging different prices is allowed (like charging different prices across US states), restricting cross-borders buyers is as crazy as restricting New York buyers from using goods they bought in Pennsylvania. It's basically re-instating restrictions to trade, except this time by a private company on its own. It's a company decisions prevailing over laws. It's crazy, it really is. This move (I'd say, this "clarification" that no, serving digital content does not put you above the law) is long overdue.

 

2 hours ago, 79wjd said:

Woohoo, now everyone pays the expensive price.

Citation freaking needed.

Because, you know, Steam isn't selling games at a loss because poor Changrucians or whatever. I'd love to see the IO model you're basing your predictions on, though.

 

1 hour ago, handymanshandle said:

Yet another way the EU will end up fucking people over: forcing countries where the keys are cheaper for valid reasons to become more expensive because Valve will have to comply with those laws.

Dude, I suggest you go back to square one and work this step by step because you're really hammering without hitting a single nail...

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Here's a though:

 

They remove GEO blocking, everyone from the countries with higher prices decide to buy their products from countries with lower prices, so far so good.  Steam suffer a loss of revenue from the shift of sales from a higher priced country with a higher tax margin and larger population base to a country with a low tax margin/population and corresponding lower price tag (revenue stream).  This results in a net drop in revenue so they put their prices up for everyone, now the people in the counties who can afford the higher prices pay slightly less while those who live in poorer nations pay more.

 

This may not turn out entirely this way, however it is still a group of nations with varying economies and populations and one reason why geo blocking is a thing.  I would say there is no more merit to the EU "studies" and conclusion than there is to the greedy people who just want to pay the least they can regardless of the consequences that might have.

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11 minutes ago, 79wjd said:

Except that the geoblocking is in place to make the content affordable for those in poorer regions.

It's called price discrimination. It's in place to maximize the profits of a "monopolist" (the exact degree of market power is irrelevant for the argument, what matters is that you can't do it under perfect competition) by appropriating as much consumer surplus as it can. In its absence, said monopolist will be forced into a "pooling equilibrium" in which they have to trade off margins vs. quantity. The final pricing will largely depend on the price elasticity of their customers, which typically is none of the prices set in the separating equilibrium.

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Why does the EU always have to meddle in things just to fuck it up for everybody.

 

Steam will just adjust their prices across the board to be the same, no way they will keep selling them at adjusted pricing without geoblocking. Because not only will steam lose money, but publishers will as well.

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8 minutes ago, SpaceGhostC2C said:

It's called price discrimination. It's in place to maximize the profits of a "monopolist" (the exact degree of market power is irrelevant for the argument, what matters is that you can't do it under perfect competition) by appropriating as much consumer surplus as it can. In its absence, said monopolist will be forced into a "pooling equilibrium" in which they have to trade off margins vs. quantity. The final pricing will largely depend on the price elasticity of their customers, which typically is none of the prices set in the separating equilibrium.

In other words, "charging as much as the market will bear", for each and every market segment.

 

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I wonder how many people hate on this just because it's the EU doing it. My guess is quite a few. 

 

Fact is that geoblocking is bad. It's terrible. It doesn't make sense that the games I bought in my home country of Sweden can't be played when I am in for example Denmark. Geoblocking in and of itself has 0 benefits to the consumer, only drawbacks. I am really glad to see it die. 

 

However, I don't think people understand economics if they think this will lead to higher game prices. The prices are lower in some counties because they can't afford more. Game prices aren't determined by throwing a dart at a random price. For each dollar you increase the price, the fewer copies it will sell. Companies tries to get as close to the sweet spot as possible because that makes them the most money. Publishers do not want to raise the price of their games in regions which already has lower prices. This will not be an opportunity for publishers to raise prices because they already have the prices they want. 

 

What I believe will happen is that prices will more or less stay the same, and your IP will keep determining the cost of games. The general public will not go and change their location with things like VPNs just to get cheaper games. The group of people who will go through those extra steps is most likely very small, and trying to stop them from getting slight cheaper games will do more harm than good for the publishers. Remember, they want to keep the same price structure they already got. 

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6 minutes ago, 79wjd said:

Except that the geoblocking is in place to make the content affordable for those in poorer regions.

It's a question of principle and one of the main principles of EU is the free movement of goods and services and geoblocking is highly going against it. Steam is completely free to bind the store location of the user (as it has done) and completely free to have different pricing in different countries, but it shall not restrict movement of the goods from one country to another. With physical goods this is more simpler matter because restricting their movement is much harder and usually not worth the trouble, why should it be any different with digital goods?


And quite frankly, looking at how unsensible most of the gamers are, those who are using G2A (*gough* shit hole *gough*) and other services like G2A (*gough* shit hole *gough*) are using them already and this probably don't skyrocket that userbase just because most of the gamers don't know about those services and couldn't care less.

 

And to polish the point. Steam already locks your store location (country) when you create the account. You can change your store location but you can do so only once in 14 days and you must not have any store activity for 14 days before changing your store location, you must also have valid payment method (credit card) from that country and valid address in that country if Steam decides to check up. And this is not in the question, this is completely OK for EU. So, even if the geoblocking is removed, it's not as simple as use VPN and start buying games cheaper, and even if it was, how many from general population knows how to use VPN or even knows what VPN is?

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1 minute ago, Thaldor said:

It's a question of principle and one of the main principles of EU is the free movement of goods and services and geoblocking is highly going against it. Steam is completely free to bind the store location of the user (as it has done) and completely free to have different pricing in different countries, but it shall not restrict movement of the goods from one country to another. With physical goods this is more simpler matter because restricting their movement is much harder and usually not worth the trouble, why should it be any different with digital goods?

 

Do steam stop you from playing your games if you move to another country?   I have never stepped foot outside Australia (with my PC).

 

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34 minutes ago, 79wjd said:

Except that the geoblocking is in place to make the content affordable for those in poorer regions. 

It can still be sold cheaper in poorer regions.

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13 minutes ago, LAwLz said:

What I believe will happen is that prices will more or less stay the same, and your IP will keep determining the cost of games. The general public will not go and change their location with things like VPNs just to get cheaper games. The group of people who will go through those extra steps is most likely very small, and trying to stop them from getting slight cheaper games will do more harm than good for the publishers. Remember, they want to keep the same price structure they already got. 

This is just another greedy thing the EU is doing, and I doubt prices would stay the same without enforced pricing adjustments, game publishers are going to want to charge as much as possible.

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So what happens if valve doesn't comply?  What if they don't pay the fine's?  Does the EU have any recourse they can do to shut them down in the European market?  Or is it up to the Country's that make up the EU to enforce the policies?  I'm not to sure how this stuff works across the pond.  I know in the States for example marijuana is an illegal substance from the stand point of the federal government. However certain states have legalized marijuana and chose not to enforce the Federal regulations.  Not sure if this is a similar situation or not?

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17 minutes ago, mr moose said:

Do steam stop you from playing your games if you move to another country?   I have never stepped foot outside Australia (with my PC).

 

As far as I know they don't. Also they don't change game versions depending on your country after purchase (like the Wolfenstein doesn't install or change to the German version if you have bought it from elsewhere and move to Germany). There's only that store location bind and then key bind (when you're bound to Australia, you cannot activate Russian/EU/NA keys) and only that key bind is now in question.

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