I've seen a lot of people commenting on game prices in Australia being so high, so I thought I'd try to explain.

You see, this isn't anything to do with the games industry; it's entirely to do with economics in general.

Every country has two GDPs: a nominal GDP, measured in US dollars at the current exchange rate, and a PPP-adjusted (purchasing power parity) GDP, measured in theoretical "international dollars" (set at the 'normal' - as opposed to current - value of the US dollar).

When a country's currency is strong (as Australia's is right now, due to Australia being one of the countries least badly hit by Moneygeddon), the nominal GDP per capita can seem high, but this is just a function of the US dollar's relative weakness.

In a nutshell, a currency's strength doesn't affect the domestic purchasing power of that country's people (at least, not in any simple 1:1 direct way). Australia's PPP-adjusted GDP per capita is therefore far less than its nominal GDP per capita.

Basically (and this is the short version), the purchasing-power-adjusted value of the Australian dollar (how much in terms of goods and services you can buy for it) is about 71% of the nominal value of the Australian dollar (how many US dollars you can buy for it) by 2010 figures*, which is, I don't need to tell you, a pretty huge difference.

So if you're looking at how much you're paying for a game in terms of US dollars, then you're looking at how much it would cost an American to buy enough Australian dollars to buy the game, not how much it costs an Australian to buy that game in real terms (which would be currently less than 70% of that value).

So my point is, don't blame Steam or retailers or publishers or whatever. Blame the way global economics works if you have to blame anything, though there are some rather good reasons for it to work that way. And please, if you understand what I just said, try to explain it to other people. I hope it's at least halfway understandable.

(Also check out the data smuggling ring thread if you want to take advantage of the strong currency.)


*Because the value of the AUD against the USD continues to climb while the intrinsic value of the AUD in purchasing power terms doesn't change much, it's even less than 71%, now.