Australian video game prices will drop by the end of the year, according to Rob Blythe, consumer analyst for Macquarie Bank. According to Blythe, the Australian dollar moving towards parity with the US dollar is the major catalyst for the Australian growth in online shopping. But, he claims, when it comes to the video game market online sales in Australia are lower than in the US and UK. According to the Macquarie report published in July (and data from various sources including Forrester, UK ONS, US Census Bureau, and Screen Digest), the toy and video game category make up roughly 3.7 percent in Australia, compared to 24 percent in the UK, and 19 percent in the US.
While Blythe notes that Australians want to shop at overseas retailers online due to better prices, he also points out that there are several factors that come into play which stop many from doing so.
"Firstly, a lot of console games are region-locked, so if Aussie gamers buy a game from Play Asia they end up with the Asian or US version and therefore can't play online with their Aussie friends," Blythe said. "Secondly, maybe around 50 percent of sales of a big, AAA game are in the first week. Core gamers don't like to wait; they want to be part of the whole experience of lining up for the title on the day of its release at a brick and mortar store and then going home to play it."
The good news is that Blythe thinks pricing won't be an issue for much longer in Australia. He posits that game prices in Australia are slowly becoming aligned with other territories, as publishers begin to take into account that that exchange rates between different territories will always fluctuate.
"Australia has been slow to adapt to international pricing for games, yes, but I think in the second half of this year or at the very least by early 2012 we will start to see game prices in Australia coming down. From my estimates, I predict they'll drop from around A$120 to somewhere around A$70."
"That said, Australian pricing will still be at a premium to offshore, due to things like distribution and shipping costs, but the gap won’t be as significant. Economists are predicting that our currency will normalise and eventually come back down below parity with the US dollar and when that happens, the attractiveness of buying video games overseas will be eliminated for Aussie consumers."