Commentary on Euro Pricing Flamefest

[Tribaldemon]

I get the impression that the people who are doubting the cost of shipping being such a large factor haven't tried sending large boxes to and from Europe. A 500g 50cmx20cmx10cm box cost me 30 Euro to ship here, and a 20cmx20cmx20cm box cost me 20 Euro to send there. The rock band box appears to be about 1mx0.5mx0.5m, and even factoring in bulk freight discounts I would expect around 40-50 Euro per box in shipping alone, minimum.

Contrast that to similar boxes I send to and recieve from the US, which cost around 15-20USD, and I for one was not suprised that shipping paid a large role in driving up the cost of this game in Europe. Ultimately, I hope the game sells enough to warrant a full PAL region release, because the thought of the extra costs involved with personally shipping a 360 pack from the UK to Australia makes me shudder, heh.

[hip]

The rate I quoted was for a full 53' storage trailer. To my knowledge DHL does not offer freight services. Primarily they are a package delivery service like UPS and FedEx. This would be a great way to get Rock Band from warehouse to stores. Gamestop uses UPS for all their store deliveries in the states, but these come from regional warehouses. They are moved by semi's into the warehouse to move mass amounts of products at one time is way more profitable then using package delivery services. I would assume the same recipe would have to work in Europe because Chinese manufacturers will not ship small quantities, they want to ship containers out as fast as possible to keep the machines moving. So, in the states to move freight via Schnieder, Warner, Conway, etc etc. currently its a quote based on mileage and size of load plus 30% for fuel. So lets say they give you a quote of $2000 to move a trailer 800 miles by the time you pay the 30% on top of that it costs you $2600. Now I base my 50%-60% figure on the movement of these rates in the US in the last 5 months. An influx of .50 a gallon on diesel has jacked that 30% up, it used to be about 18% 4 months ago. So, with the insane prices of fuel in Europe I thought I gave a conservative estimate on the fuel surchages at 50-60%. I wish one of my logistic counter-parts in Europe would enlighten me on this, because I am dying to know.

i saw these numbers on the Freight part of the DHL website...
and your 30% US surcharges may also come from the fact that US have very long distances to cover on road, while in Europe, even if we have high fuel price (50% more expensive) the distances are FAR FAR FAR shorter.

[terRize]

what could really have an impact is to convince retail stores to not buy the game, because it is them that pay EA before us gamers...
or we could try to convince gaming magazines and website to give a low score, as their score should reflect a fun-value/price ratio, and their score is what the casual reader sees first.

Exactly, anything you can do to drive down sales (i.e., boycott the game) is much much more effective then screaming on these boards.

I like the first idea of trying to convince the stores to not even purchase the game for sale at that price. The second option isn't bad, and were I reviewer in Europe most likely that would be part of my review.

For example, I just bought the Orange Box today for the PS3. I got it for 30 dollars at Target. I'm not a big FPS person so at 60 it wasn't of value to me, but all those games for 30 was.

This (boycotting) is the kind of thing companies hate to hear

[hip]

I really am enjoying the totally rich comments here. I do believe that the ending statement from Glo about the game said: "it’s not magically going to get cheaper because you wish it to be so." Is it that hard to accept? You say the company is greedy but really who is being greedy here? You guys are wanting the price to be cheaper even though you're given a statement saying it won't be able to be sold any cheaper.

i think people have already given up on the price, all they want is primarily the truth about the price, and also an explanation about why the game is not bundled with any instrument at all.

[The_Little_Buster]

i think people have already given up on the price, all they want is primarily the truth about the price, and also an explanation about why the game is not bundled with any instrument at all.

Fair enough and understandable then.

[zDisturbedOnez]

i saw these numbers on the Freight part of the DHL website...
and your 30% US surcharges may also come from the fact that US have very long distances to cover on road, while in Europe, even if we have high fuel price (50% more expensive) the distances are FAR FAR FAR shorter.

No the 30% is cost of fuel alone. The distance is covered by original quotes. So when you want to move a trailer 800 miles lets say, a shipping company will tell you a figure for the mileage. So for $2000 quote you pay $2600 so you wind up paying $600 for fuel alone.

[hip]

Hip, math was never my strongest subject. History was, but that's neither here nor there. Besides...never trust my math to the crappy Windows calculator.

The point of my post was that the fuel cost alone was going to play heavily into the price of the product.

All consumer goods in the U.S. are seeing a mark up due solely to the rising cost of fuel. I'm almost positive Europe is no exception.

Granted, I think the numbers Harmonix and EA are coming up with are a bit inflated, but I do think that fuel costs, customs costs, and taxes are what's adding to the majority of the mark up. I still don't think it's right, but it's still basic economics. Profit = Sales - Cost. In order to turn a profit, they have to drive up the sales price in order to offset the shipping and manufacturing costs. Unless EA is shipping a uniform Rock Band disc with a language option, there's cost involved with translating every version, whether it be German, French, English, Spanish, Polish, Russian, etc... There's instrument manufacturing costs. There's shipping costs. There's development costs.

Is 240 Euros a bit much to pay? Yes. They could probably still be profitable at 200 Euros. But, they still have to sell X number of units just to break even before we even discuss profitability.

not necessarily, because, like i said in previous post, Europe may have 50% higher priced fuel. but US have more than 50% longer distances, which means 50% more consumed fuel...

development cost should have already been covered during the 7 months "head start" the US had. they chose a domestic cost compensation.

Shipping cost, China to US, and China to Europe should be close.

Transportation Cost : Europe, fuel cost more, US more fueld consumed... close call here too....

Manufacturing costs : exact same for both !

so we are left with translation and the 9 additionnal songs for 200 dollars for most European countries, and 9 additionnal songs for 200 dollars for the UK and other english speaking EU countries...

YAY

[zDisturbedOnez]

I dont work for EA or Harmonix nor do I understand the Logistics process that they use. Although I do handle logistics daily at work. Here are a couple of scenarios that may explain Europe not getting bundles.

1.) The game and all instruments may be produced in several different factories and the bundles may very well be packaged somewhere in North America. Possibly Mexico because labor is much cheaper there to package everything, they then could import them from Mexico to the States duty free because of NAFTA.

2.) If each instrument and game are comming from various sites in China logistically and financially it would make sense to import each one seperately into Europe. Labor is rather high in Europe to bundle and repackage everything at a central plant. The Chinese are a manufacturing country anymore, so it could possibly be hard for them to get all instruments and game sent to one location in China for packaging to ship to Europe.

3.) The price will be higher if there is no bundle. I am shocked now at the $169.99 price point in the states. With the drums being sold at $80 at my local Wal-Mart and the game at $60 by itself, that brings it to $140 just to play drums but the Special Edition bundle was only $30 more for the guitar and mic added in. I havent checked local stock lately but there could be a possibility they may not be producing bundles at all anymore and the stock build up in the States could very well be whats left at regional distribution points.

These are all just possibilities but it could explain why bundles are not available for Europe.

repost from page 6 this is my theory on the bundle situation

[zDisturbedOnez]

I thought it was all about the exchange rate.
The Euros they pay get converted to USD. When doing that you only get 50 cents in USD for each Euro. So if Europeans paid 170 Euros once it converts to USD it's then only $87.50. Isn't that how it works?

Our UK brethren are not on the Euro though

[SirAhenobarbus]

Now with taxes levied in order to pay for the socialized health care system in Europe [...]

Can we leave the family diner-level political commentary aside?

I see several people assuming EA is facing the same kind of shipping costs as Grandpa shipping a shirt and a book to Europe through Fedex. This is wrong, please don't bring that up again. Shipments are in bulk, hundreds of units at a time in containers, and therefore, product for product, an order of magnitude less costly.

I also read "pricing" estimates taking the price of a bundle in the US, which already factors in US shipping and the RMA program (to name two aspects that keep on being brought up), and then adding other costs for the shipping to Europe and the RMAs there, and then concluding that the price difference is therefore accounted for. This is wrong: you'd be assuming EA is making Europeans pay for the shipping/RMA handling of US customers on top of the shipping/handling in Europe.

If by any chance all Euro bundles are indeed being shipped from China to the US, then shipped to Europe (and Euro RMAs would be sent to the US and back), then we're back to Bollo's comment: "Someone, somewhere is showing a large degree of incompetence".

A word on the comments on the cost of doing business in Europe (warehouses, fuel, labor, etc.) as a cause of the mark-up: you guys make it sound like it's so expensive that it almost can't happen. I suppose that goes with the stereotype of the average European driving a Mercedes and paying $10 for a cup of coffee. Anyway, there's plenty of business over there, packages get shipped and sold in all sectors of activity (including games and peripherals, including from American companies) and not at that level of mark-up compared to the price of the same product in the US.

I don't think EA is trying to rip-off European customers (though you never know I guess, it must be damn tempting to try to recoup some of the costs from the the defective instruments at launch fiasco ), and I'm pretty sure that HMX is very much bummed at the price tag, so the most probable explanation to me, at this point, is incompetence on the part of EA.

Anyway, good luck to you guys in Europe. Crossing fingers for a somewhat lower prince in stores...