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Game prices discrepancies

A topic by fazz created Jan 08, 2020 Views: 1,625 Replies: 10

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I don't know if this is an issue with Itch or how a store page is setup, but I've noticed a few different games that report the same price as on Steam, but when I go to buy them on Itch, 20% tax is applied (I'm a UK customer, that's the VAT rate here). This does not happen on Steam, tax is already included, so the game costs more on Itch.

This was the case with Baba Is You (not checked recently), and is currently the case with A Short Hike. When I try to purchase the game on Itch, 20% tax is added for me, that's $7.99 + 20% = $9.59, which pushes the UK price to £7.61. On Steam the price is fixed to £5.79 (which includes tax). I would much rather support Itch and purchase the game here, but how can it compete if the price is higher?

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firecat4 years ago

https://www.theguardian.com/games/2019/oct/02/revealed-global-video-games-giants...

Steam might be tax-dodging because they own games themselfs and the law isnt enforcing it.

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fazz4 years ago

I believe that's related to corporation tax, not VAT. The customer pays VAT and that appears to be where this discrepancy lies.

Itch is NOT including VAT in the upfront price, Steam is - yet both upfront prices are the same, hence Itch charging 20% more in total than Steam. This is a problem I have seen more than once.

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fazz4 years ago (1 edit)

The links if anyone wants to test for themselves - I'm in the UK so not sure if something similar is happening elsewhere.

A Short Hike on Steam costs = £5.79 (which already includes VAT, and is ~$8)
https://store.steampowered.com/app/1055540/A_Short_Hike/

A Short Hike on Itch costs = $7.99 (comparable to the Steam price), but adds an extra 20% for VAT when you click to buy = $9.59 (much higher than Steam)
https://adamgryu.itch.io/a-short-hike

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firecat4 years ago

on steam USA site version the price is $7.99 while UK version is £5.57 plus VAT. So i look around and it does need to be 20% VAT: https://www.gov.uk/vat-rates

And it keep leading back to this: https://www.theverge.com/2019/4/5/18296527/european-commission-valve-antitrust-o...

So yes Valve is breaking the law by making games cheaper at other countrys, something the developer might not be aware of or unable to do anything.

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fazz4 years ago (1 edit)

The article you linked is about how Steam geo-locks activation keys to *prevent* UK customers from purchasing games outside the UK to avoid paying UK VAT rate - that's the exact opposite of what is happening here.

I'll say it again, Steam are *definitely* charging 20% VAT in the UK. https://partner.steamgames.com/doc/finance/taxfaq

In fact, here's my invoice from A Short Hike.

From what I can tell the developer has either set their Itch price incorrectly, or their Steam price incorrectly. And I have seen this happen several times. The mix up means Steam ends up charging 20% less than Itch. This needs to be addressed, it makes Itch uncompetitive.

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leafoAdmin4 years ago (2 edits) (+2)

We ask for developers to price their game excluding any sales tax (like VAT). This means that the final price you pay is the developer’s price + sales tax. Since implementing this we’ve learned that in Europe people tend to expect VAT to be included in pricing, so we did it backwards. It’s likely we’ll change this structure in the future, but it would have a substantial impact on developer earnings so we haven’t started looking into it too deeply yet.

So until we make any changes: Although you may be paying more, the developer is also getting more.

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fazz4 years ago

Hi Leafo,

Thanks for the clarification. I do understand this. My query is not regarding how and when you charge VAT but why there are sizeable price discrepancy between Itch and Steam for certain games.

Regardless of whether VAT is charged upfront (Steam), or on top of the advertised price (Itch), there are large discrepancies in base price. My provided example stands, A Short Hike,

On Itch = £6.12 + 20% VAT = £7.61
On Steam = £4.82 + 20% VAT = £5.79

The fact that the Itch price before tax is comparable to the Steam price after tax suggests to me that the developer has made a mistake when setting the price. Is there not a way to approach the developer and highlight the discrepancy, fixing the mistake (by either increase the Steam price or decreasing the Itch price) and thus making them equally competitive?

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leafoAdmin4 years ago (2 edits)

We don’t have £ prices on itch.io for A Short Hike, so I’m not sure where you’re getting that price. The developer only sets a price in USD and then whatever payment method you use is doing the currency conversion. I’m currently looking at their USD price and it matches itch.io. Do you think they set a regional £ price on Steam that’s much cheaper than the USD version? You can see what prices they have on Steam here: https://steamdb.info/app/1055540/ I’m not entirely sure how Steam does regional pricing for this, if it’s auto generated or the developer’s choosing.

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fazz4 years ago (1 edit) (+2)

The Itch price in £ I'm quoting is simply the converted rate. As offered by PayPal in the UK when going through the checkout.

Steam allows the developer to set regional prices - and presents the cost as per regional expectation (tax excluded in US, included in Europe). This is why the USD price is the same on Itch v Steam.

I assure you the UK final price is different, by some way, I have been through the checkout for both. I have seen this for a number of different games, usually smaller indie games (A Short Hike, Baba Is You). All I can think is when the developer has set the UK price on Steam they have not realised that tax is included in the upfront price, hence the final price being a fair amount higher on Itch.

On that steamdb page you linked it shows the UK price *including* tax versus the US price *excluding* tax. That doesn't seem like a fair comparison.

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firecat4 years ago

you cant trust steam for any information when it comes to tax, they have broken and are in lawsuits from around the around for misleading the government and people. 20% means it will always get a cut by that much, it will always be more than a £1. What you seeing on steam is incorrect price. This can be easy proven by math:

Anything lower than £1.03 with 20% VAT is £0.20 or less

£1.03 with 20% VAT is £0.21

Anything lower than £1.08 with 20% VAT is £0.21

£1.08 with 20% VAT is £0.22

Anything lower than £1.13 with 20% VAT is £0.22

£1.13 with 20% VAT is £0.23

Anything lower than £1.18 with 20% VAT is £0.23

£1.18 with 20% VAT is £0.24

Do you understand now, the numbers are always in prime numbers, every £0.05 makes VAT tax go by £0.01. Steam version of £0.97 is incorrect. They are breaking the law, Steam can not be trusted with anything.

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