Guild Wars 2

Why is it 30% cheaper for me to purchase Gems in American dollars than it is to purchase in my own currency?

Current GBP Price

800 – £8.50
1600 – £17.00
2800 – £29.75
4000 – £42.50

Current USD Price

800 – $10
1600 – $20
2800 – $35
4000 – $50

At the current rate if i purchase $50 worth of gems I get 4000, in GBP that equates to £30.80 give or take… which would only get me 2800 Gems. Work that one out?

One thing that comes to mind is the possibility of VAT Tax.

ANet hated euro pop enough to surcharge you?

It actually is really weird, has been since beta.

It’s generally VAT added but even then it’s still bumped up a bit (VAT is 20% in the UK, difference is 30%). The reason why?, no idea.

What i find weirder though is the lack of a discount for a bulk purhcase, no matter how many gems you buy it’s alway £8.50 for 800 (and that in itself is very overpriced).

The fixed pricing for gem purchases is because they want to establish gems as a real currency with an exchange rate. That’s hard to do when someone could order 50,000 gems that each cost 25% the price as the guy who ordered 500, you know?

The prices usually go down 10% or less (5 to 10% being the normal I see) for the last order as it enoucrages players to buy more gems rather then less. Take PerfectWorld : 50$ nets you an extra 5$ (10%) last time I bought Zen.

I was kinda weirded out that ANet did not do this, as I’d have had 110$ worth of Gems rather then 100, but oh well.

Could it be more expensive to run the severs in Europe? Probably. Would it cost them more than it is worth to set up a dynamic system based off the current currency exchange rate? Yes. So… There you go.

Well I never stopped to consider VAT issues but a little googling give me this:

VAT on services

UK VAT may need to be charged on services performed in the USA, depending on the nature of the service supplied. This is a complex area, but broadly, assuming the supplier belongs in the UK and the customer belongs in the States, UK VAT will need to be charged on most services unless one of the following exceptions applies.

UK VAT does not need to be charged on most services related to a live event or physical activity carried out in the USA. This includes cultural, artistic, sporting, scientific, educational, training, entertainment, exhibition and valuation services.

UK VAT does not need to be charged on services relating to land or property situated in the USA. This includes estate agency, conveyancing, architects, surveying, construction, property maintenance, hotel accommodation, defined exhibition stands, and property management services.

UK VAT does not need to be charged on passenger transport carried out in the USA.

UK VAT does not need to be charged on most ‘intellectual’ services supplied to a customer who belongs in the USA. This includes copyright, royalties, licences, advertising, consultants, engineers, lawyers, accountants, banking and insurance. If the service relates to land or property situated in the UK, VAT still needs to be charged.

I take that its a server provided in the US so shouldn’t be charged at such a rate, and even if you want to consider servers/transactions being operated from the EU it should still not be as god awfully distorted :/ Would be great is someone in the marketing/sales department could explain a little as to what exactly I’m missing regards the difference… I wonder if i purchased the gems in USD would it still work out as cheep?

Note: Worth mentioning that I’m not talking about differences in rate… 30% is nothing to do with flat rate exchange rates as it hasn’t been anywhere near that in the past 10 years.

Cite

Living in the UK I find this really strange as well, would be nice to hear from a-net about this.

MajorMelchett.6042:

What i find weirder though is the lack of a discount for a bulk purhcase, no matter how many gems you buy it’s alway £8.50 for 800 (and that in itself is very overpriced).

Yeah also weird you’d think they would encourage you to buy more by implementing a discount :S

No matter what you do and where you go, it will always be cheaper for someone in the UK to purchase goods in USD — and that is simply because of the currency exchange rate and the reason that you guys pay VAT. Keep in mind, however that in some cases those in the US do pay a sales tax on top of the cost depending on the individual state’s regulation. However, to my knowledge it’s not possible for someone to ‘switch currency’ and pay in USD… if you could that would be interesting, and they’d probably stop that pretty quick. Those paying in Euro, it’s even worse.

Thanks for the clarification John!

But johns answer is wrong (well, not quite right), the difference isn’t 20% across the board like he states, the difference is actully higher than that (easily worked out and already stated int he thread john linked).

So again the question to john is, why do we actully pay more than the 20% vat increase?.

Prices in the US are displayed BEFORE sales tax is added. So a customer in the US will always pay more than the advertised price. Exact amount will depend on how large the sales tax is, which usually varies by state. I have no idea how this is handled for internet transactions.

Prices in Europe/UK are displayed AFTER sales tax is added (VAT).

ArenaNet’s European operation is based out of the UK, so the VAT rate is 20% for both Euro and GBP transactions.

Advertised US dollar price for 800 gems: 10.00 dollars
Advertised Euro price for 800 gems: 10.00 euros
Advertised GBP price for 8000 gems: 8.50 GBP

US dollar price after adding 20% sales tax: 12.00 dollars
Euro price converted to US dollars: 13.03 dollars
GBP price converted to US dollars: 13.72 dollars

So if you use the $12 price as the base for comparison, it’s not such a big difference.

It’s also worth bearing in mind that currency conversion rates vary over time, with the Euro being more volatile than GBP at the moment. When I ran the same numbers during one of the Beta weekends, the Dollar and Euro prices were almost equal, and the GBP price was a little lower than it is now.

It’s not feasible to keep changing the Gem prices as currencies fluctuate. The 1 dollar = 1 Euro ratio makes sense, because this comes out somewhere close depending on what the Euro exchange rate is doing this week.

The GBP to dollar exchange rate has been reasonably stable for the last couple of years though, so on the face of it the GBP prices are higher than they need to be after taking sales tax and currency conversion into account.

This should come as no surprise to anyone given how we’re always shafted in the UK on this sort of thing, but it’s not as extreme a difference as it appears on first inspection. Should be more like £7.50 rather than £8.50.

Interesting take on taxes and charges. In reference to internet taxes in the US ..at present there is debate going on about adding taxes to all internet purchases. Don’t know if it will be regulated state-by-state requirements or on the federal level. Either way, if it does go into effect, we will see how and who the taxes are regulated.

ConfusedDave.4271:

Prices in the US are displayed BEFORE sales tax is added. So a customer in the US will always pay more than the advertised price. Exact amount will depend on how large the sales tax is, which usually varies by state. I have no idea how this is handled for internet transactions.

Prices in Europe/UK are displayed AFTER sales tax is added (VAT).

ArenaNet’s European operation is based out of the UK, so the VAT rate is 20% for both Euro and GBP transactions.

Advertised US dollar price for 800 gems: 10.00 dollars
Advertised Euro price for 800 gems: 10.00 euros
Advertised GBP price for 8000 gems: 8.50 GBP

US dollar price after adding 20% sales tax: 12.00 dollars
Euro price converted to US dollars: 13.03 dollars
GBP price converted to US dollars: 13.72 dollars

So if you use the $12 price as the base for comparison, it’s not such a big difference.

It’s also worth bearing in mind that currency conversion rates vary over time, with the Euro being more volatile than GBP at the moment. When I ran the same numbers during one of the Beta weekends, the Dollar and Euro prices were almost equal, and the GBP price was a little lower than it is now.

It’s not feasible to keep changing the Gem prices as currencies fluctuate. The 1 dollar = 1 Euro ratio makes sense, because this comes out somewhere close depending on what the Euro exchange rate is doing this week.

The GBP to dollar exchange rate has been reasonably stable for the last couple of years though, so on the face of it the GBP prices are higher than they need to be after taking sales tax and currency conversion into account.

This should come as no surprise to anyone given how we’re always shafted in the UK on this sort of thing, but it’s not as extreme a difference as it appears on first inspection. Should be more like £7.50 rather than £8.50.

The problems arise once again when Arenanet and others try and justify this all by saying that the UK and EU have VAT on at 20% and then say that figure loud enough to make you think that it is the same figure for the US sales tax calculation. However trawling through the internet looking on multiple website and wiki’s I cannot find any information which supports this.

From the various places I’ve looked sales tax in the USA varies from state to state and can be anything from less than 1% up to around 9-10%. This falls a very very long way short of the bandied about 20% figure that the UK and EU have to live with for comparative reasoning.

So once again the figures go like this:

Prices in Europe/UK are displayed AFTER sales tax is added (VAT).

ArenaNet’s European operation is based out of the UK, so the VAT rate is 20% for both Euro and GBP transactions.

Advertised US dollar price for 800 gems: 10.00 dollars
Advertised Euro price for 800 gems: 10.00 euros
Advertised GBP price for 800 gems: 8.50 GBP

Baseline US dollar price for 800 gems (before sales tax): Still 10.00 dollars
Baseline Euro price for 800 gems (minus the 20%): 8.34 euros
Baseline GBP price for 800 gems (minus the 20%): 7.08 GBP

Or going the other way>>>

US dollar price after adding (1%)-(10%) sales tax: 10.10 or upto 11.00 dollars
Euro price converted to US dollars: 13.04 dollars
GBP price converted to US dollars: 13.72 dollars

So even in the worst case scenario where there are states that have to pay as much as 10% on sales tax they are still getting a vastly superior deal to the UK and EU counterparts. Anywhere between 2-3 dollars cheaper PER 800. Or if you want that in percentages between 16-27% cheaper in dollars depending on what the state sales tax rate is compared to UK & EU.
It may sound like small change when you are talking only 2-3 dollars but multiply that by the potential tens of thousands of EU & UK gem purchasing accounts and then scale it up for those not just buying 800 gems but maybe up to 4000 at a time. Those 2-3 dollars a pop suddenly start looking like tens if not hundreds of thousands of dollars that we are getting shafted over in favour of the US.

@Rhovannon
Why would ArenaNet want to convince you that U.S. citizens pay 20% sales tax? If you want to complain about U.S. citizens having lower sales taxes than you do, then complain to your government, not to ArenaNet. Still, if you’re going to make that comparison, you also have to consider the things that citizens of many countries in the EU have that U.S. citizens do not, such as universal healthcare. If you think the higher taxes aren’t worth it, move to a different country.

If you want to compare prices, do it before taxes, not after taxes.

The solution to this and earn it in game. Bad enough paying tax on everything but now its on game items too? LOL

@lackofcheese – I’m not quite understanding your point – why would we complain to out govenments when we aren’t actully complaining about the sales tax. We’re complaing that Anet is asking for more over the sales tax, most can understand the sales tax increase but the fact remains that there is an extra cost added on top of that.

Compairing prices before tax and after tax show the same thing, no matter what the US gets gems are cheaper. I would have no issue at all if the UK was simply paying 20% more (the UK tax rate), but we actully pay more than 20%.

As for the bit about healthcare etc, that has nothing to do with this at all (because as said, most aren’t complaining about the actual tax increase).

@MajorMelchett
My comment was aimed at Rhovannon’s post. I guess perhaps you didn’t read it, but in short, that poster was effectively complaining about sales tax rates. I thought that this was clear enough since no one posted in between us, but I have now clarified this in my previous post to avoid any confusion.

Comparing the prices before tax and after tax does not, in fact, show the same thing. In one case the price difference is ~15%, in the other it’s ~25%. If you think 15% and 25% are the same thing, there’s a few really good deals I would very much like to offer you.

Considering that the poster above me explicitly brought up the figure of 16-27% with an after-tax comparison, issues like healthcare and such are entirely valid in a response to that post.

It is true that the numbers show that, if you consider the numbers before tax, UK citizens are actually paying something like 15% more than U.S. citizens for the same product. The numbers are easy to work out – £8.50 = ~£7.08 pre-VAT = ~$11.43.

This, I agree, is a legitimate question that deserves a proper response from ArenaNet, but if you’re going to use numbers, make sure to use the right ones.

@lackofcheese, ahh ok no probs then.

Just to clarify thought when i said “Compairing prices before tax and after tax show the same thing” i simply ment they both show a lower price in the US, not that they both showed the same percentage decrease in price (i thought that was clear as afterwards it stated “no matter what the US gets gems cheaper”).

Anyways, back to waiting for an Anet response.

I am by no means an expert at maths but given that 20% of 8.50 is 1.7 isnt the GBP price actually 6.80 not 7.08? o.O and approximately 60p off the USD given exchange rates? ($10~£6.2)

So slap 50p off the price of gems and i’ll be happy as they’re more accurately matched :p … or is this a service charge you enjoy? Pft racists

@Kindeller
Adding 20% and taking 20% away don’t cancel each other out.

Adding 20% = multiplying by 1.2; the inverse operation is dividing by 1.2, which is the same as multiplying by ~0.833, or subtracting 16.67%.

That’s where the 7.08 number comes from.

First let me start out by saying that the cost of Gems in Australia is the same as in America – $10 = 800. This means that what follows is not directly related to the specifics of the thread, but it’s very much worth mentioning.

The Australian Dollar (AUD) has been at parity with the United States Dollar (USD) for quite a while now. In fact, for most of the last couple of years, the AUD has been worth more than the USD.

According to the first site listed by Google, the current exchange rate from AUD to USD is $AU1 = $US1.01890. In other words, $1 Australian is the equivalent to $1.02 US.

Here’s the thing. While the $-Gem conversion is the same in Australia as it is in America, the game itself costs us 50% more. In the US it sells for $60. In Australia it sells for $90. GST is included in that price. This is, in fact, the norm. Skyrim, Diablo III, Civilisation V, Shogun 2, any major game you care to mention that was released in the last few years costs $60 in America but $90 in Australia even if you purchase a digital copy from Steam or directly from ArenaNet/Blizzard/CA, etc.. This is not limited to games, with similar price discrepencies visible in business software, DVD/BluRay movies, and pretty much any hardware to do with entertainment. There is even one piece of “professional” software, from either MicroSoft or Adobe (I don’t remember which), that sells for $1000 more in Australia than it does in America.

And there is no reason for it.

A parliamentary inquiry is due to start investigating this subject later this year… so maybe by 2022 we’ll be paying the same for these things in Australia as the Americans do.

Yeah, Australian game prices are ridiculous at times, and it’s something that needs to be fixed. With respect to Steam prices, though, it’s not done by all game publishers across the board – certain ones like EA, Activision and Sega are the most to blame for the situation.

You’re overreaching when you make this claim:

Skyrim, Diablo III, Civilisation V, Shogun 2, any major game you care to mention that was released in the last few years costs $60 in America but $90 in Australia even if you purchase a digital copy from Steam or directly from ArenaNet/Blizzard/CA, etc..

For a start, Australians can in fact buy GW2 for the same $60 as Americans do – I bought my copy from https://buy.guildwars2.com/en-gb/ for that price.

Similarly, there are a number of major games from the past few years that have been fairly priced on Steam for Australians – CS:GO, for example.

On the other hand, there’s games like CoD:MW2 that is $90 to Australians and $20 to people in the U.S. I don’t even know what to say to pricing like that; my only response is to treat such games as though they don’t exist at all.

A good place to look if you want to get a feel for the overall situation is http://www.steamprices.com/au

If i was you lot i’d be more concerned with why 2-3g in game is equal to your £8 i don’t think thats an even remotely sound conversion rate.

but hey, there is more to the difference in price than just vat, avg earnings come in to play and some other economics stuff that is way beyond most, there is a reason you have to go through years at university to study economics and still manage to screw up the bloody awefull debt run economy we currently have.

The UK always seems to get hit harder in the wallet when dealing with other countries, our currency is much stronger so maybe they think we can afford it.

Even noticing we get taxed as well but still pay more after the tax add on is stupid.

Yup, it’s VAT.

If you don’t like it, vote. VAT makes sense on some items, but not digital goods.

No, the point being made is that VAT doesn’t fully account for the price difference, especially not for the UK prices.

The UK prices are ~36% higher, but VAT is 20%.