RE4 Rip-Off!!!!!

[GotchayeX]

Origin, that's not how things work at all.

Corporations are profit maximizing. You suggest that they make more money by selling games for higher prices in Australia, and this is true, but you also say that they only do this because $5 profit per copy isn't enough to be worthwhile. The implication here is that $5 per copy is 'worthwhile' in the US, so they don't jack up prices. This, however, is nonsense. Why wouldn't they also jack up US prices if it means more profit?

If there's anything to economic theory, then it's simply the case that gamers in other markets are willing to pay more than US gamers. Much of this is probably just differences in preferences across markets.

Taxes certainly account for some of it, though, and it should be noted that a small increase in the per-unit tax can have a larger effect on prices. Ultimately, it depends on the supply and demand curves, but consider this scenario: the supply curve has a generally negative slope, because decreasing marginal costs allow producers to break even at lower prices on larger quantities, while the demand curve (this is the special part) exists at $50-$60, drops somewhat sharply to about $70, and is then fairly flat to around $90 before falling off completely.

What happens if an increased per-unit cost (from a tax, say), which would act to shift the supply curve upwards, pushes the intersection of supply and demand to the right? If demand falls sharply but then is rather flat, a $10 tax-driven cost increase could easily result in a $30 increase in retail price.

Of course, I can't guarantee that demand works that way, but it does make some sense. We all have this conception of $50-$60 as the 'right' price for games, and I doubt that most in the US would really have a different reaction to $90 pricing than they would to $75 pricing. It's only noticed as being 'more expensive than it ought to be' - no one is driven out of the market by the $15 increase from $75 to $90 that isn't already gone when the price goes up to $75.