OPINION: Why it’s hard to argue with EA’s decision to raise PC game prices in India

A lot has been said about EA’s increased PC game prices in India thanks to the#EAPCIndiacampaign. While the intention behind it was to establish an open platform rather than simply an outlet for people to complain, the majority of opinions expressed have been negative. In amongst all those dissenting voices, however, there has been a minority that didn’t really see much wrong with PC and console prices being the same. Those opinions were of course drowned out by the vocal majority, but that minority does exist in India, and to some extent, I’m part of it.

The secondary purpose of the #EAPCIndia campaign was to hopefully get EA to talk to us about its reasons for raising prices, but we still haven’t heard from EA on the matter, which is unfortunate. So it leads us to once again debate the reasoning for this dramatic price hike and speculate on what it means for PC gaming in this country. One of the possible reasons is that EA would like to price PC games in India at the same price that it charges in developed markets (i.e. $60). Rampant re-exports of CD keys from India, and outsiders using VPNs to buy from India on the cheap may have also contributed to this. The second possible reason we’ve been hearing is that EA didn’t see PC game sales increase at a rate that justified keeping those low prices anymore.

While it is true that EA is pushing towards a digital future, I find it hard to believe that it would increase prices so sharply in a healthily growing PC market. If the intention was to unify prices across all Origin stores, it would still leave the door open for lower prices for the local retail versions of their games, which could then be ramped up over a period of two to three years to soften the blow on gamers. But hiking prices by 133% from one year to the next is absurd anywhere, let alone in one of the world’s most price-sensitive markets. And if outsiders are using VPNs to access the Indian store and depriving EA of sales in other countries, it’s on EA to fix the system.

The other side of the coin

While ganging up on EA seems to be the easiest thing to do right now, it’s the second scenario that has me interested, and of the two, this is the one that seems more to blame for the price hike.

I’ve been hearing from distributors and retailers for a few years now that PC game sales in India were flat. They’re growing, sure, but not nearly quickly enough considering the pace at which PC penetration is growing in this country (17% growth in 2012 according to Gartner), and especially considering the low PC game prices. I was told by a distributor a while back that AAA multi-platform games like FIFA and Assassin’s Creed sell only slightly more on PC than they do on PS3 at launch. Let that sink in – a platform with an install base of around 200,000 sells nearly as many copies of a game as a platform with an install base of 50 million (conservative estimate). Let’s assume even 5 percent of that 50 million (that’s 2.5 million PCs) is connected and capable of playing games, there is still no way that PS3 game sales should come close to matching PC game sales. Add to that the fact that the same game costs Rs 2,799 on PS3 and Rs 999 on PC and it paints a gloomy picture for the Indian PC games market.

So that means that either:

1. Most PC gamers in India are still pirating games
2. Most PC gamers only buy older games/wait till they get cheaper, or
3. There just aren’t as many PC gamers in India as we’d like to think

Lower prices equal growth?

The argument in favour of lower prices is that without lower prices, the Indian gaming market won’t grow. Console gaming is growing in India, and that’s at Rs 2,799 per game, so that pretty much invalidates that argument. Moreover, store owners in India are actually against stocking PC games at these low prices, and you need retailer support in a country like India. Aside from the lowering demand in comparison to console games, store owners just don’t see much profit in selling PC games. At an MRP of Rs 999, retailer margins are too low for any of them to bother, especially when they can devote that shelf space to a console game with nearly as much demand and a bigger cut on each copy sold. That’s not to say that retailers will jump at the opportunity to stock PC games priced at Rs 2,499. There’s still the Indian PC gamer mentality to contend with, which I’ll get to in a bit. At least now retailers will know that they can make some real money when they sell a PC game, and that could mean more shelf space for PC games.

It’s console gaming that’s gaining in India despite the higher prices, and if there’s a platform that publishers like EA should be supporting here with lower prices, it’s the PS3 and Xbox 360. With a growing market even at the Rs 2,799 price point, it’s these platforms that will benefit even more from price reductions, and we’re already seeing that with Microsoft and Sony now releasing older games at Rs 699 and Rs 999 price points.

https://twitter.com/mojorojo/status/353068730298798080

Console vs PC

Lamington Road in Mumbai is a well known hub for PC hardware and software, and for years, its many stores were the go-to spots for PC gamers to find the newest games. I’d been a regular customer at Computer Culture. They’ve had the widest selection of PC games over the years, but walk in today, and its shelves are packed with PS3 and Xbox 360 games, with PC games resigned to a shelf towards the back of the store. For console games to get this kind of preference at Lamington Road is telling, and this is the situation despite PC games being priced at just Rs 999.

That brings me to the ‘console versus PC’ argument. If an Indian console gamer can afford to pay Rs 2,799 for a game, why can’t a PC gamer do the same? Some say it’s because console gamers can resell games and therefore recoup those costs. India doesn’t have a thriving or organised used games market as seen in the US, so that argument is only valid to a limited extent. The reality is that if you can afford to own a PC capable of playing Battlefield 3, you should be able to afford to pay a higher price for your games. If anything, games like Battlefield actually give you the best experience on PC, so why are Indian gamers unwilling to pay for that? It’s because we’ve been conditioned to believe that we’re entitled to cheap PC games. On one hand, we love to talk about how superior PC gaming is compared to consoles, but on the other hand, we’re unwilling to pay for that superior product. For all the angry comments in response to the price hike, it’ll be interesting to see how many of them are actually unable to buy at these prices, and how many are simply unwilling.

"All the PC gamers who have started buying original games after so many years will go back to piracy."

That’s the most popular argument against higher prices. Let’s be very clear – the only thing pushing someone towards piracy is their mindset. PC game prices tend to drop drastically after release; faster than they do on consoles. Waiting till the games become more affordable is an option; looking for discounts and sales is another option. Piracy is not the only alternative, and so rather than portraying India as a country that’s always teetering on the brink of piracy, it’s better to show people that there are other ways to get their games without stealing them.

Back catalogue country

Game distributors love talking about how India is a back catalogue market, and it’s true. While many of us like preordering games, waiting in lines at midnight launches, and getting games on Day One, we’re a small minority, and that holds true whether you game on consoles or PC. Games in India sell the most when they drop in price. On consoles that acceptable price point is Rs 1,499; on PC, it’s Rs 699.

For much of 2013, Assassin’s Creed 2, Brotherhood and Revelations figured regularly amongst the top ten sellers on the Flipkart sales charts, while the latest in the franchise, Assassin’s Creed 3 remained absent. It wasn’t because Indian gamers were still catching up on the series; it was because those games were priced anywhere from Rs 299 to Rs 499, while Assassin’s Creed 3 was (and still is) at Rs 999.

So in the overall picture, it’s probably how EA will reduce prices post-launch rather than how much it will price them on release date that will decide the fate of its PC games in India. Considering that FIFA 13 and (shockingly) Medal of Honor: Warfighter still carry their launch sticker prices means that EA has a lot of work to do in this regard.

Is it good that EA increased prices? Absolutely not! No one likes paying more than they’re used to for anything. Something’s not right in a market where you can buy Watch Dogs and Batman: Arkham Origins for the price of Need for Speed: Rivals. But this is the situation we find ourselves in, and it’s probably a truer reflection of the Indian games market than we’d like to admit.

Next week, we’ll be discussing the possible impact of digital distribution on the future of regional pricing, with insights from Indian game distributors and expert views from a former Sony executive who worked closely with the Indian market.

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