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Steam Trading And The Problem Of Regional Pricing
Most gamers simply purchase their games directly from the Steam store and think that’s all there is to it. I was the same until I looked into trading some spare games rotting away in my inventory. I quickly discovered Steam’s massive trading community and the effect it had on the sale of games themselves.
Steam trading was first localized only to Team Fortress 2 items but became available for trading gift versions of games in 2011, and now supports many other types of in-game items. Since then, there has been a growing community of savvy traders who use creative methods to turn games into profit – whether that’s hard cash or simply funding their own game collection.
The most controversial practice among the trading community are cross-region trades. Instead of simply converting the price of games into different currencies, each region is given it’s own unique price. Some of the price differences are pretty extreme. For example, Sid Meier’s Civilization V costs $29.99 for US buyers but only 249 rubles (equivalent of around $7.16) for it’s Russian counterpart. However, what most people don’t realize is that, for the majority of games, there’s nothing stopping the trade of games between regions. There’s a growing number of prolific traders from ‘cheap’ regions who will sell games to other countries at a small markup; the seller makes a profit and the buyer gets a game much cheaper than they could via the Steam store.
Many assume that Steam will have measures in place to detect and prevent cross-region trading and so try to avoid it for fear of being banned. This is becoming more and more difficult as other traders struggle to compete with the massive discounts found in some countries. Not to mention that not every trader explicitly identifies where they live, and that many simply buy from cheaper regions and sell them at a higher price anyway, making it impossible to know where any one game originated from.
Steam’s stance on this activity is pretty unclear. The Steam Subscriber Agreement only states that users must use software in a non-commercial manner, however that could cover almost all traders that make some kind of a profit. While there are many anecdotal claims of people receiving bans for engaging in such practices, it’s certainly not consistent and usually instead linked to credit card fraud. The expanding trading scene naturally attracts new forms of fraud and scamming, and Steam will actively ban traders and remove games from libraries when stolen payment methods are involved.
On the other hand, more and more games are beginning to have separate region-locked versions that can only be redeemed in the countries that can purchase it. These tend to be games from big publishers, such as Borderlands 2 and Elder Scrolls: Skyrim, suggesting that cross-regional sales lose money overall, at least for large-scale games. Perhaps it’s less of a problem for smaller games, or else why would they not also opt for the same region-locked system?
A frequent speculation as to why these trades are allowed relates to the money Steam makes from community market sales. Interestingly, traders have adopted items from Team Fortress 2 and a few other games as a substitute currency as it is impossible to directly send Steam wallet funds. The Mann Co. Supply Crate Key, nicknamed the “TF2 key”, is currently the most universal currency used. Depending on the intentions of the trader, they may accept Paypal or other external payment methods to turn their sales directly into real money, or accept the equivalent price in TF2 keys. The keys can then be either traded for other games, or sold on the community market for Steam wallet. However most importantly, Steam takes a 15% cut from these sales, giving them roughly 30 cents from each of the several thousand TF2 sales per day.
Furthermore, some traders have even started to find ways around certain Steam restrictions such as trading 4-packs and the regional restrictions on particular games. This may have contributed to the controversial new lock system applied to Metal Gear Rising: Revengeance and Sonar X3 Studio, in which buyers from South America and Eastern Europe cannot trade or gift the products at all. However, a large amount of countries that are included in the lock don’t actually enjoy the cheaper prices of places such as Russia and Brazil. There’s now a growing anxiety that this practice will spread to cover more regions, and many argue that rather than locking games, publishers should try harder to price their games fairly for all people so that some don’t feel forced to resort to cross-regional trading in the first place. Of course, that’s not to say that many people aren’t simply out to get a quick discount. It’s ultimately up to the publishers to decide, and Konami are already receiving negative feedback for their recent decision.