Thursday, September 5, 2013

Xbox One: Regional Difference in Price, Free Games, Etc

Recently, it has come to light that the Xbox One will be bundled with a free game (FIFA 14 or Forza 5) in some countries.  This has lead to some amount of discussion on how countries like the UK and the EU deserve a pack-in game more than the US - I have my doubts.

On the subject of pack-ins for the US (probably won't happen).  I think Zoo Tycoon makes the most sense.  It is rated E, Kinect enabled, and won't likely sell that well anyway (under 500K).  I thought it was supposed to be a retail title, but no place seems to have it available for pre-ordering. 

I wanted to see if they really do pay more.  So, what I did was to convert the console for a more US comparison.  This means that I am taking out the VAT (US adds sales tax after, not part of the price) and then convert some currencies at semi-current exchange rates.  Let's do this for three countries: US (baseline), UK, Germany and Australia. 

Prices (in approximate $US):
US: $499.99

UK: $670.18 (429.99 GBP)
DE: $655.78 (499.99 Euro)
AU: $547.78 (599.99 AU dollar)

Well, that definitely looks like a big spread, but there is one thing that might inflate it a little (or lot)... VAT.  The current rates I found for VAT are 20% UK, 19% Germany (DE), 10% AU.  That seems like a pretty steep "sales tax" in Europe (and much more reasonable in Australia).  The US adds sales tax to the purchase price, it is not included in the sales (gross) price. Here is my estimated price before taxes (US style). In parentheses after the countries is the pre-tax dollar value minus a $60 game pack in

US: $499.99

UK: $536.15 ($476.15)
DE: $531.18 ($471.18)
AU: $493.00 ($433.00)

So, what did we learn?  If you want to blame the price difference on someone, blame it on the government.  Yes, there is still sticker shock at the price. 

I guess if you want to take it to the next step... prices in US dollars with tax included (i'll use my home area's tax rate of 9.5% (though I used so much store credit my effective tax rate is about 1%):

US: $547.49
UK: $670.18
DE: $655.78
AU: $547.78

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