Friday with Means - February 6th, 2009

[Mikenche]

This isnt really any complicated - we are paying a lot more, for the same product, and there isn't any good reason why we should.

What's worse, exatcly how much more we are paying depends on the fluctuations of exchange rates. At worst we've paid a 75% premium (1 EUR was 1.5 USD, plus 17% VAT). Currently it's "only" around 50% (1 EUR = 1.3 USD).

[NoGoal]

Guys, you don't pay more. US pay less.

[ArienSky]

This isnt really any complicated - we are paying a lot more, for the same product, and there isn't any good reason why we should.

I have to disagree on that, actually it is complicated..

My only concern is that they charge the same for all European countries.
Poland, Ukraine, Latvia etc. should pay less.
Why you ask?

Here is the answer:
It should be about the same percentage of a months pay, so it is equal to all.

Europeans in average earn more, but expenses, for the same goods are higher also.. in average, over the whole union.

Here is a thing or two about about Purchasing Power, and it seems like $ to € is a rough conversion according to the Feb 1st 2007 The Economist's Purchasing Power Index (The Big Mac index)

Country		Local	 	US$	+/- % cost	Purchasing Power
United States	$ 3.41		3.41	--- (0)		--- (1.000)
Euro area	€ 3.06		4.3324	28.713		0.9091

Iceland		Kronur 469	7.5745	155.1741	158
Norway		Kroner 40	7.3666	137.5734	12.9
Switzerland	SFr 6.3	 	5.3594	66.7376	  	1.96
Denmark		Dkr 27.75	5.2447	62.9151		8.62
Sweden		Skr 33		 5.062	52.4727	    	9.94

United States, Euro area and top 5 most expensive Big Macs.

The european fee might translate into being more US$ (2nd column) when currency is exchanged, but it looks like the overall Purchasing Power(4th column) for Europe is the same as United states, if the price is changed from $ to €. A rough estimate..

As it is visible from this index, the European price actually is less than a clear $ to € exchange, further more these numbers are a year old now.

it is something that is always in the mind as it were. I would imagine it would have to be a very long term situation before we would consider a change in relation to exchange rates.- Silirrion

You can go to this link(Purchasing Power Indexes going back to 1998) and decide for yourself if that is a "long term situation"..
I am glad to hear they are aware of the issue and are always considering/thinking about it ("always in the mind").

Kind regards Ariensky


Wikipedia on the Purchasing Power Index

One suggested method of predicting exchange rate movements is that the rate between two currencies should naturally adjust so that a sample basket of goods and services should cost the same in both currencies. In the Big Mac Index, the "basket" in question is considered to be a single Big Mac burger as sold by the McDonald's fast food restaurant chain. The Big Mac was chosen because it is available to a common specification in many countries around the world, with local McDonald's franchisees having significant responsibility for negotiating input prices. For these reasons, the index enables a comparison between many countries' currencies.

It runs on the good old "what are people willing to pay", if they charge too much they will get less costumers, if they charge too little there is room for more profit. Hence McDonald's adjust the prices in each country accordingly.

Maybe FunCom should start Up-selling like McDonald's do, asking Fr00bs sighing up:
"Do you want Prepaid Points with that?"
"We have a rebate on The Longest Journey this week for people with Anarchy Online accounts."
"Are you sure? The Longest Journey got good reviews."
"Remember to stop by our Age of Conan page; here is the link."

lol, so the price of a Big Mac has became a comparison tool for purchasing power? OMG, learn your facts before doing these kind of comparisons. purchasing power is totally different amongst the countries of the EU. there are countries in the EU where the minimum monthly wage is still 150 EUR, while others have ~1000 EUR/ month minimum wage.

for all you who don't get this:
I can take a 10 EUR bill, go to the first bank i find and walk out with 15 USD.

Yes it sounds funny first time you hear about the Big Mac index, but it is actually a tool used in economy.
With the opinion of "learn your facts" please write a letter to The Economist and tell them to study further before writing there newspaper.

I can be accused of mis-representing the data, but the survey itself and the implications of it is not my invention, it is indeed an economic tool; an indicator of Purchasing Power.
I have listed the top 5 together with the European average to show that Europe is not just one place, one price, as you argument. So I can not see what you are trying to say.. (the top 5 countries are all in the EU, except Iceland [which is a part of the single market through the European Economic Area])


Why a burger?
We need something that is the same all over the world, with approximately the same production cost.
Nothing is perfect for comparison, as there ALWAYS will be differences, if not in product costs, then in transport, but for a good standardized thing a Big Mac will do fine.

Would you buy a Big Mac if you thought it was too expensive?
No.
Hence you can use the Big Mac to see how much people are willing to pay.
You could use cars as well, but.. cars are not the same all over the world, the Big Mac is.


For the last line " I can take a 10 EUR bill, go to the first bank i find and walk out with 15 USD."
Yes, but you are also willing to pay more for your Big Mac, hence why McDonald's charge more for it, find your country on this list, to see how much more you pay than Americans.
Then you can go to your local McDonald's demanding to pay 5.5 Ringgit (1.6141 $) as they do in Malaysia, or 3.41$ as they do in USA.

Or you could cash out all your money and move to Malaysia, that is your choice in a free market. If enough do it, the price on Big Macs will fall in your country till the level where people stop moving from your country for cheap Big Macs. But that lower price will still probably be higher than the price of a Big Mac in Malaysia, hence McDonald's will still earn good money in your country.

Replace the word "Big Mac" with anything else; potatoes, cars, rent, HD-TVs etc. You can get it all cheaper in Malaysia, so why haven't you moved yet?

You still pay FunCom (else you would not be able to post here), so clearly the price is not too high for you yet.
With AO you even have the option of playing for free, so you will not even loose your AO friends.

Try looking at the numbers again, have a cup of coffee/coco/tea and think about how much you are willing to pay for various things, then think about, or research what they pay for those things in Malaysia.
I have no worries about paying 1$ for a pound(½kg) of rice, but that would be an intolerable price in some countries.

Each year (I pay yearly) I have the thought, if AO is worth the price tag, and my conclusions this far has been that it is.
But indeed; I did write a mail to ask if I could pay in US$.
The answer was no.

[Hacre]

Except companies like McDonalds also have to consider different running costs per country, different consumer demographic, etc etc.

FC is not presented with this issue, their running costs do not change dependent upon where the customer "buying the Big Mac" is from.

[ArienSky]

Except companies like McDonalds also have to consider different running costs per country, different consumer demographic, etc etc.

FC is not presented with this issue, their running costs do not change dependent upon where the customer "buying the Big Mac" is from.

use the Itunes index then.
But exchange rate is not the same as Purchasing Power, as long as you got that point, you are fine

Kind Regards
Ariensky

[Mastablasta]

Except companies like McDonalds also have to consider different running costs per country, different consumer demographic, etc etc.

FC is not presented with this issue, their running costs do not change dependent upon where the customer "buying the Big Mac" is from.

McDonalds also cheats in their taxes as much as possible. For example they run borderline to the rules here and pay no taxes at all because they don't make a profit, in fact they have red numbers on the bottomline. All the money they make is used to pay for supplies from their own companies abroad, and so they get government funding to help cover the loss.

[IHaveHugeNick]

I dont see any reason why other countries should pay less. Expenses Funcom has are exactly the same regardless of the fact if customer is located in Russia, USA, Poland, Kenia, or if he is playing from Discovery space shuttle.

Same with expecting that pricing should be also affected by how much person earns, it doesnt matter if you are arabian petro-sheik or romanian strawberry picker , Funcom isnt a charity company, they run a business, they have every right to charge everyone the same.

So dont mix it up, and cut that communist crap out, i'm in Poland myself , for the cash that here is reserved only for white collar professionals, {Edited by Venachar: Do not repost this material.} wouldnt even move a finger , but that's just how world works, i dont mind that, i just dont like being overcharged without a reason, all i want is fair prices.

Only reason i mention differencies in wages is because maybe someone thinks paying few $ more makes no difference. It does.

PS. Most of McDonalds (at least here) operate as franchisee, meaning its no evil Yanks riping you off, usually its your own fellow-citizens riping you off

[TheFracker]

Guys, you don't pay more. US pay less.

Oh thank you for that revelation.However you chose to look at it the question "Why?" is still not answered.

I can not think at any viable reason beside greed and desparation.Now lets say that to some extend I understand the 20 Euro charge on this new "Expansion"*cought* addon *cough* LE *cough*,but what annoys me that the greed goes even further and FC decides to take advange of a very large part of their playerbase and charge them with 25-20% w/o any reason.

I have to disagree on that, actually it is complicated..

Your post makes sense ONLY if the only game you ever played is AO.If you decide take a look at other MMO's you'll see that either the payment is in dollars for everyone(Eve online,Astonia and if i remember well same is with Guild wars and City of heroes) or if the game is split on regions the prices are being at the same level (EX: WoW 15 Dollars on US server a month,12(or was it 13) euros a month on EU servers).

[shadowgod]

Oh thank you for that revelation.However you chose to look at it the question "Why?" is still not answered.

I can not think at any viable reason beside greed and desparation.Now lets say that to some extend I understand the 20 Euro charge on this new "Expansion",but what annoys me that the greed goes even further and FC decides to take advange of a very large part of their playerbase and charge them with 25-20% w/o any reason.

so, funcom should set their base prices in USD, and then every day they need to adjust their prices accordingly?

i think you're confusing personal greed, with a company wasting their time trying to figure out some "fair" method of constantly having to readjust their prices due to market fluctuations.

[Hacre]

so, funcom should set their base prices in USD, and then every day they need to adjust their prices accordingly?

Nope. Read the thread. Charge in one currency only. Dollars or Euros, don't give a **** which.

[IHaveHugeNick]

so, funcom should set their base prices in USD, and then every day they need to adjust their prices accordingly?

i think you're confusing personal greed, with a company wasting their time trying to figure out some "fair" method of constantly having to readjust their prices due to market fluctuations.

No one is asking them to keep adjusting the prices, picking one currency will have exactly the same effect and is a whole lot easier to do.

But since you bring that up, i doubt even developing a way of adjusting the prices to market fluctuations on daily basis would eat 30% of their income from subscribers, which is the minimum of what they gain by overcharging European customers.

[reefs1]

Man quit crying over a couple dollars. You people play the game and are posting here everyday saying funcom should do this and that with the game. They are running this game to make money. Think of your couple dollars as donations to a game that you enjoy playing.

[Hacre]

Man quit crying over a couple dollars. You people play the game and are posting here everyday saying funcom should do this and that with the game. They are running this game to make money. Think of your couple dollars as donations to a game that you enjoy playing.

American?

[Omutb]

Nope. Read the thread. Charge in one currency only. Dollars or Euros, don't give a **** which.

Aye, thats is definitely the most sensible option.

Theres nothing that says EU based companies must charge in Euros, just that they must charge Europeans VAT.

[macattack]

You are not looking it from the FC company/marketing/investor perspective. No matter what country you buy from, FC gets a std rate "Pre-order this now for € / $ 19.95" (OK 2x rates) or the std . Based on this they are able to calculate expenses, profits, etc. and report back to investors. They wouldn't be able to forcast effectively nor provide viable estimates with a variable revenue stream. (And don't blame us for your VAT :-)

[reefs1]

American?

If I wasn't, I still wouldnt be posting here about paying the price for a game i enjoy playing. It's a fair price in euros or dollars. Also how many americans in 03 were crying when the euro was lower than the dollar.

[Hacre]

If I wasn't, I still wouldnt be posting here about paying the price for a game i enjoy playing. It's a fair price in euros or dollars. Also how many americans in 03 were crying when the euro was lower than the dollar.

Well if you feel it's fine for us to pay the "couple dollars" extra as a "donation" to the game we play, you go right ahead and send Funcom an extra 2-5 dollars a month on top of your sub fee.

Idiot.

[reefs1]

Quit paying and crying about it all day if it's that big a deal.

[SSK]

If FC will lower price in euro they will loose money, if they'll increase price in dollars they'll loose subscribers (money), so they won't change anything what effects their little profit

[TheFracker]

Quit paying and crying about it all day if it's that big a deal.

Your ignorance is amazing.

so, funcom should set their base prices in USD, and then every day they need to adjust their prices accordingly?

i think you're confusing personal greed, with a company wasting their time trying to figure out some "fair" method of constantly having to readjust their prices due to market fluctuations.

Why did completly ignored the second part of my post?