Friday, 11 February 2011 19:54

Why Nintendo IS price gouging on the 3DS

By

An article from Current.com.au suggests transportation, waiting and postage costs are good reasons why Nintendo's extra $100 cost above US pricing isn't price gouging Australians, but does this make sense or is it a load of tosh?

 

Nintendo's 3D handheld gaming console, the Nintendo 3DS, was previewed at a launch party earlier this week, with hand-picked attendees getting a special preview of Nintendo's latest and greatest.

Although the US dollar price for the Nintendo 3DS is US $250, Australians are being asked to pay AUD $349, which is $99 or with rounding, $100 more than the US price, something that seems odd in an age when the Australian dollar is effectively worth the same as a US dollar, with the past few days even seeing Australia's dollar worth more than a US dollar.

With China quite far away from both the US and Australia, the article over at Current.com.au explains that the much bigger population of the US, coupled with existing distribution channels, means it is cheaper to ship and sell a Nintendo 3DS to the US, although an astute commenter at the Current article noted that the Hawaiian US Dollar price of the Nintendo 3DS was the same as the US mainland price, making the Current.com.au argument somewhat moot.

There were also protestations that waiting time (which was quoted at 'weeks' in the Current article, even though it is possible to get express international postage, albeit at a higher price) is something you can put a pricing value on, as well as the postage costs itself.

Nowhere in the article was the explanation that GST adds 10% to Australian prices, nor was there any explanation that many US States charge an additional sales tax over and above the quoted recommended retail price, both of which are factors in deciding the true cost of a product to consumers.

There's also the issue of lower wages in the US, because things are cheaper there, which means that wages are higher in Australia, as are the cost of goods and services, which is a very important factor in deciding how much to charge in a particular country.

Indeed, if you have to pay more for your staff, offices, taxes, distribution, advertising and even those nefarious percentage deals that Aussie retailers demand from suppliers, it should come as no surprise that higher costs in Australia mean higher prices for consumer electronics.

However - do all of these extra costs equate to needing to slug Australians an extra $100 over US consumers?

I'll just have to do the same as Current.com.au and pull a decision out of the thin air between my nether regions.

I say that Nintendo IS price gouging Australian consumers compared with US consumers, despite the higher Australian costs, which probably mean that it isn't price gouging.

See what happens when you make strange decisions without really thinking about it, oh peeps of Current? I think my reasons for why prices are higher are more real and more valid reasons as to why prices could be higher down under, unlike the tosh about waiting times, distribution centres and post offices that Current.com.au seems to have come up with.  

Ultimately, dear reader, $100 is $100, so, whether Nintendo is price gouging, or not, is a decision I'll leave up to you. You know what I think!

 

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Alex Zaharov-Reutt

Alex Zaharov-Reutt is iTWire's Technology Editor is one of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

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