I searched through previous topics to see if something similar came up, but I had no luck finding anything. So I'll just start my own topic, and hopefully someone can help me out :D . 

So I was calculating today how much I spend on video games every year. I purchase roughly around 15 games, and games normally cost $100, with the exception to some being $110. Anyway, so $100 x 15 = $1,500 I spend on video games each year. Now what pisses me off the most is how much video games are in america ($60). The currency today converts $60 US to about $65 AUS. So I took $65 from $100 to get 35, then I multiplied that by my average 15 games to get $525. So what I'm trying to get at, is that I'm spending an extra $525 each year for video games. Is there a reason why video games cost more in Australia? 

(End rant XD) 

many other countries include taxes in prices automatically, and not at the register. In some states in the US we have sales tax that can add 5-10%, and most other countries benefit from more government support (free health care) which is reflected in higher taxes. We also pay an income tax, I have no idea if other countries pay an income tax, but if they do not than there is probably a higher sales tax (VAT in europe i believe)

You also need to take into consideration that the minimum wage in Australia is 14.31/hr. The Federal minimum wage in the US is 7.25/hr which varies from state to state. You factor in the minimum wages, and you're paying roughly the same per game.

The biggest reason for the cost difference is Australia is an island. Islands require planes or boats to ship goods, which increases the costs of things. It's not THAT bad. ;)

Wow @ Australian minimum wage.

:D Thanks for the info. Glad to know there is a reason behind the extra $525 rather than thinking it's a big rip-off.

The real reason there is a cost difference in Australia is the higher minimum wage. Everybody working in a game store has to be paid twice as much in Australia. Everyone working at the loading docks, driving the trucks, everyone. That alone can account for a significant increase in price.

I'm an economics major in college, by the way. You can't just compare Australian dollars to American dollars, using the exchange rate as a measure. There are entire fields of economics devoted to this very issue.

There are also tons of taxes. Australia also has a Value-Added Tax, which is usually added directly to the price, and not assessed at the register: in the US, if something costs $50, you will be charged $50 plus a 5-10% sales tax on top of that. In Australia, the price is added in, and set to be a constant 10% (I believe this is how it works). So, basically, assuming they use the same currency, a game that costs $60 in America would cost $66 in Australia, but they would really cost the same amount!

But yeah, you can't just convert directly using the conversion rates. You have to take into account a ton of other factors.

Lol, I'm terrible when it comes to economics, mostly because my knowledge lies in arts. Though I do know how important it is to understand economics; which is why I asked the question :D. So yes, thanks for the help Showertea. I might read up a bit more to educate myself so next time I can answer my own question XD.

woot woot for 12.5% soon to be 13.5% sales tax in quebec.

Those are all good reasons but there is another good reason why game prices are high in this country (Australia). Oligopolies. The ACCC has slowly been bringing change to the table in the form of allowing "grey" importing. They did this with the music retailers. The average price of a CD in Australia use to be $30AU. It is not uncommon and is almost normal to get a new release CD for under $20AU. What changed? The ACCC allowed mass importing of CD's from foreign sources.

I looked at opening a Sci-Fi book store. In Australia we have a limited range of Sci-Fi/Fantasy compared to in the US. For example, only recently was Brandon Sanderson's books published in Australia (he is finishing Robert Jordan's Wheel of Time series). I had to import a few of his books.

I contacted US publishers of Sci-fi and was told they are not allowed to sell to me. The reason why is because of "regional copyright". In other words, they are maximising revenue streams by restricting supply of product to other regions. This protects local publishers with their various business structures. The side effect is that the consumer pays more. The local publishers will argue that it is due to economies of scale, higher basic wage in Australia, etc. But in reality, the price of books in Australia is unnaturally high. It's just wrong.

The ACCC is reviewing the "grey import" policy for books in Australia, just like they did for music CD's. The same emotional arguments are being raised by the Oligopoly such as, we need to protect local creativity and artists/authors. It's crock. Hopefully the ACCC will make the same ruling with books as they did with music.

Now, video games. A bit more complex but also many of the same issues as books and CD's. Firstly, games can be distributed to you electronically, yet we pay much more for that content. The vast majority of games are not developed in Australia so no loss to local "artists". The only group that is protected is the local profiteering distributors. There is not really a "regional copyright on games.

Basically the price of games in Australia is farcical, IMO.

What I don't understand is that 10 years ago when Sydney hosted the Olympic games - the Australian dollar was about 0.55USD, recommended retail price (RRP) for videogames was $100. Today in 2010 the Australian dollar is about 0.94USD games still retail for $100. Games have had absolutely no roll-back on prices why is this?