Valve Locking Out Gamers Who Buy Orange Box Internationally

Via Opposable Thumbs, a post on the Consumerist site notes that some enterprising gamers who bought the Orange Box in a territory different than the one they lived (to save a few bucks) have now found themselves unable to play the game. "One user, Todd, explains that thousands of crafty North American gamers looking for a deal have 'bought the product (and hence, the serial numbers) at well known international game stores' at a significant markdown. Activation of the purchased titles went off without a hitch. However, Valve apparently has taken issue with the region-specificity of some international versions and has begun locking out accounts of those living in North America, but owning international serial numbers with the message that the purchased game is in the 'incorrect territory.'" Worse, folks who tried to 'make it right' by buying a local copy have found they're basically SOL. I've been a big fan of the Steam concept since it launched, but this is the sort of thing you need to communicate to your users before you sting them.

Comments

Silly users

[Anonymous Coward]

Buying what you want, where you want, when you want at the lowest price you can find is for corporations. Why do users keep thinking globalization should benefit them. It's really silly.

And this...

[bigstrat2003]

...is why I didn't like the idea of Steam the first time I heard of it (not this specifically, but the idea of things like this happening). If I bought the game, it's mine, jackasses. They have no right to be disabling people's games after taking their money.

Re:And this...

[setagllib]

Sure they do, they specify it in the EULA. What do you expect from proprietary software? When will you people learn? You seriously think closed source is for keeping secrets? It's for keeping control.

Re:And this...

[bigstrat2003]

Get off it. I own countless pieces of software which are closed-source, and not one of them (well, except Windows, I'll grant you that one, but we don't judge most companies by Microsoft's actions) can be taken away from me at a moment's notice. Not only are many EULA's supposedly unenforcable (I am neither a lawyer, nor caring enough to research properly, so this is just repeating slashdot hearsay), but they would have to PHYSICALLY COME TO MY HOUSE AND REMOVE THE PROGRAM. If they can do that with impunity, then I hate to point out to you that there are far bigger problems in the world than the open or closed-ness of the software.

In short, closed source does not fucking mean that you're going to get bent over by every company that makes a program, stop pretending it does.

Way to burn goodwill

[Interl0per]

Glad I wasn't swayed by all the glowing reviews.

Probably a requirement

[Shivetya]

to protect deals with distributors.

Reading some of the various "deal" forums it amazes me what people will go through to save a few dollars, yet turn around and brag about their $300 cases, water cooling, and thousand dollars worth of video cards.

Re:Probably a requirement

[Anonymous Coward]

So what? Globalization is the antithesis of shutting off markets to foreign participants. "Deals with distributors" just means that the product markets remain closed while the source markets are opened up.

Re:Probably a requirement

[cubic6]

"I also find it amazing that in the UK software (and other computer stuff) will retail for the same price as in the US - only in POUNDS. So it's double the price nowadays. Sheesh, I guess CD's are really really expensive to burn in the UK! There's no excuse for this, it's just greed. Valve should not be protecting greed. But then again, it's a racket. Just like the music industry. /rant"

Considering that this whole situation is because Valve IS adjusting their prices for the local markets, you really have no idea what you're talking about.

They have retail distributions agreements in Russia and Thailand to sell boxed products at competitive local prices, rather than trying to get people who might earn $300 USD a month to shell out $50 USD for a game. In order to stop people from buying Russian copies en masse for, say, $10 USD a piece and selling the keys online for $20 USD each, they lock the keys to the geographic region in which they're sold. I can't say I've seen the boxes myself since I live in the US, but I've read that they SAY on the box that they won't play outside of country X. Of course, they export the keys anyways and sell them to stupid people who think they're getting a great deal, and that's why we have this retarded article claiming that Orange Box is region locked everywhere.

Don't give me that shit about "I didn't know it was imported" either. If it seems too good to be true, it PROBABLY IS. The only fault I have with Valve for this is that they should let people unregister so they can register the copies they bought afterwards.

Re:Probably a requirement

[Opportunist]

Of course it's territory protection. But, bluntly, why is this legal? I can't go to a company and force them to keep my job here instead of outsourcing it to China. Why is it legal for companies to benefit from a global market but not for the customer?

And yes, what's wrong with buying abroad to save money and spend that money on something else? That's like saying that companies do something wrong when they produce dirt cheap in the far east and brag that they had another record profit year and could seriously increase the benefits for their shareholders.

Re:Probably a requirement

[Anonymous Coward]

I understand what you're saying, but why is it fair for companies to get cheap labor from other countries when it isn't fair for us to get cheap video games from other countries?

It all amounts to the same thing, and if it is allowed in one context, it should be allowed in the other. Conversely, if companies insist on being able to do price fixing like this, it shouldn't be legal for them to go over to China and pay somebody 10 dollars a day to do the work when there are Americans over here willing to do it (although the American will of course want a higher wage).

Re:Probably a requirement

[RonnyJ]

Your point is that in Russia and Thailand they sell the products at significantly lower prices due to lower average incomes.

His point is that, in the UK, prices are significantly higher, even though incomes are not drastically different than those in the US.

Re:Probably a requirement

[Marful]

The problem is, that apparently to Valve, the product is worth $10 USD in wherever, but some how $50 USD in the US.

By selling the product at $10USD in a foreign market, it is shown that the product still generates profit (or they wouldn't sell it that low).


So the issue becomes that of "How much can they rape the local market for?"

Violating Regional Licensing or whatever cannot possibly "hurt" a company, if the company would lose money selling it in the US at $10 a copy, there is no way they are going to sell it for $10 a copy in Russia. At worst the company won't make as much profit as they want. Either way they still make some profit.

Re:Probably a requirement

[Marful]

No, they'd lose money if they sold it at $10 EVERYWHERE. They make maybe $2-3 per copy sold in Russia... almost not even worth the effort. If they only made $2-3/copy sold everywhere, they'd need to sell 15-20 million units just to break even. That would be an astouding number of sales for ANY game, and unachievable, even for Valve.
If it was "amost not even worth the effort" it wouldn't be done. And $2-$3 profit on something that costs $2-$3 to manufacture (in america, I bet it would be cheaper in 3rd world countries) is 100% profit.

By your logic, they should either sell it at $10 everywhere and lose massive amounts of money (i.e, they get screwed), or not sell it in markets where they have to mark it down to make it affordable (customers in those markets get screwed). They are not "losing massive amounts of money" by selling at $10, else they would not be selling it at $10. The only things sold as a "loss" are "loss leaders". Things that go on special a lot at grocery stores, video game consoles such as the xbox and crappy sports accessories. Valve has no need of "loss leaders" and in the PC gaming market there isn't much sense for loss leaders as a business model outside of actual retail establishments (gamestop, brick and mortar stores, etc.)

God forbid your sense of entitlement be trampled on by a company wanting to both make money by offering you a great product for a good price, and to only make a tiny profit offering that same great value to others who can barely afford it. Whoops! There goes a little ad hominen! Obviously *I* have a "sense of entitlement" *rolls eyes* considering I purchased it from vavle themselves via steam because I wanted to support valve despite knowing I could get it at a reduced price from another country.

Your basic position is that not making A LOT of profit and instead making LESS THAN A LOT of profit is the equivalent of "losing money."

Never mind the fact that by regionally isolating a product you can bypass normal Supply & Demand dynamic.

Re:Probably a requirement

[mrchaotica]

but there's also nothing wrong with a company selling abroad with terms of its choice, including licensing restrictions you might not like

WRONG! The company in question has to, at the very least, disclose those licensing restrictions! And even then, since they're selling (not "licensing," regardless of their BS claims), such restrictions aren't legal anyway!

Imagine if you bought a shirt while you were on vacation in another country. Then you try to wear the shirt after returning home, and the manufacturer comes and rips it off your back and refuses to let you wear it because he thinks you should have paid more by buying it locally. Is that wrong? Fuck yes, it is! AND VALVE IS DOING EXACTLY THE SAME THING!

Re:Probably a requirement

[Monkeyboy4]

Umm...It is either sold for a profit at 10$US or it is not. If the lower price is subsidized by the higher price in other countries (say it costs 15$US) than it is not being sold for a profit at 10$US. It is sold for a loss, but they deem the loss acceptable. more likely, they have made the cost of production and are now just selling it for whatever they can get from everywhere. It's not subsidized - that is a model from selling physical goods, not software. Video games sales works like movies sales - once costs are covered, all it is is profit.

Re:Probably a requirement

[Anonymous Coward]

No, by his logic, he should (and by all rights is) entitled to find the lowest price and buy the game for that price. It's a little thing called capitalism. Sure, companies can choose to charge whatever they wish in whatever region they wish, but capitalism, and certainly globalized capitalism, also means that a consumer is able to "shop around" for a lower price as well. Just as producers look for lower priced commodities with which to create a marketable good.

However, the producer, in this case Valve, has decided to make sure that consumers in region "A" cannot simply purchase goods from region "B" at a lower price, just as they too are entitled to do. Yes in such low-costed regions they don't make as much, but it's simply a matter that they cannot sell it at A's higher price because at that price it is too high for local consumers. After all, you cannot sell a game for US$50 to a region of people who don't make enough to ever consider that reasonable or even a luxury, but you can put safeguards in to make sure that a region of people who can afford that price readily can't pay US$10 or so because the goods came from that lower priced region.

As a consumer, yes I am entitled to do the research and purchase lower priced goods, but in the same breath I'd say, yes, Valve is entitled to shut down any operation that would attempt to sell such lower priced goods to higher priced regions. So... yeah, capitalism is really the act of everyone screwing everyone else as best as possible, with one caveat, the more you have, the more you can actively screw others.

Re:Probably a requirement

[MaineCoon]

Bullshit. Utter and complete bullshit. They may make less of a profit, but they're damn sure making a profit. You know why they're making less of a profit? Because, as you noted, the economy there can't sustain a 50 dollar per game rate. What about initial development costs? You, like the grandparent poster I originally responded to, seem to assume there is no cost of development, only a small cost of production per unit. My initial statement still. If they sold it for $10/unit everywhere, and stores take half of that sale, cost of production is $2-3, so they see $2-3 revenue per unit. If they have $15 to 20 million dollar initial development cost to recoup, they're going to have to sell a lot of units just to recover initial development costs, excluding other overhead (such as the TV ad, which probably cost a few million). A million units sold on a PC title is actually a very large number to sell on PC, even though it pales in comparison to what some console titles manage to sell.

Re:Probably a requirement

[kocsonya]

Well, I thought that was globalisation? I am Mr. Gamer and I want to buy product GAME that is $$$ here and $ there. Due to the regulation you praise, I must pay $$$ for the product. Fine. Now I am Mr. Company and I want to buy product PROGRAMMER that is $$$ here but only $ there. Should not the same regulation apply? I mean, Mr. Company off-shores their administration, the pressing of the DVD, the making of the booklet, the customer service center and chances are, part of the programming as well - because it's cheaper to buy it there.

They want it both ways: they can buy stuff on the global market at the lowest achievable price. Then they come around and mandate that humans can not do that. Why? What makes a company more important than you or me? Companies scream around that regulation is bad, everything must be totally deregulated - except their customers, who must be heavily regulated to guarantee profit to the company and preferably executed if they do not comply.

Once I read in old book, that a long, lo9ng time ago there was this crazy idea that we elect governments and give them certain powers in order to make *our* lives better. We also allow the government to give certain rights to non-living entities, such as corporations, *as long as* it helps the government's primary goal: to make our lives better. What a silly, pinko-commie sentiment! Fortunately, we know it better: it must be the other way around. Corporations are the ruling class and they give power to the government to control us so that our behaviour furthers the corporations' wellbeing. We call it democracy, which is some ancient word for the power over the people!

Re:Probably a requirement

[fractoid]

The only things sold as a "loss" are "loss leaders". Just a thought - here you're talking about the manufacturing cost, not the total cost of production. Development cost is amortized over a product's life cycle, hence a particular price point could constitute 'at a loss' or 'at a profit' depending on the volume of sales. This effect occurs with all products, but is especially noticeable with software because the per-unit manufacturing cost is trivial compared to the amortized per-unit development cost.

Re:Probably a requirement

[Antity-H]

Let's make the following excercise:
Valve wants to make a game, it costs $100 million to make.
That means they have to sell 2 000 000 copies at $50 to break even. If they only sell at $50 then in countries with lower wages they won't sell any copies.
According to their market studies, if the global market is 20 million players 75 percent of which have a low income ($400/month) they will likely only make marginal sales in the low income part of the market because for most of these potential players the price is just too high(let's say they stille make 10 000), and they will have to make the bulk of their sales in the high income part of the market which is only 5 million people. Their market study says they will only be able to sell 1.3 million copies in this market, because of piracy, second hand sales, other games etc. 1.3million * $50 is only $65 million and they loose money, so they don't make the game.

Ok so $50 is too high, let's tap the low income market and price everywhere at $10 :
they will sell 7 million in the low income market and maybe 3 million in the high income market that's 10 million sales for only $100 million dollars revenue. as much as valve love it's gamers it doesn't want to make a game to only break even it wants to make money

Now their marketing officer checks out to see what happens if they have two pricing policies : say $10 for low income segment and $50 for high income segment. Suddenly the market study indicates they will be able to make a huge amount of sales in the low income segment say 7 million out of the 15 million people and they will sell 1.1 million copies in the high income segment (because the game is more widespread in countries that don't have as strong copyright laws there will be more piracy, they are still able to prevent high income gamers from buying at low income prices since they have this nifty activation system).

7 000 000 * $10 is $70 million !
1 100 000 * $50 is $55 million !

Total sales : $125 million suddenly they make $25 million! instead of loosing money, they almost make twice as much money as they did with the first scheme and %25 more than the second scheme!

Now which option would you choose ? Sure my numbers are completely made up so that the sum work out in the end, but don't doubt a second that it is exactly the kind of reasoning that went behind the creation of the regional lockout and the different pricing schemes.

Re:Probably a requirement

[Eivind]

Legally this is pretty obvious: It's artificial barriers to trade.

"region coding" of any sort is not legitimate in a free market economy. The entire *point* of a free market is to benefit society by improving efficiency, efficiency improves since buyers will choose the best supplier for their need, and suppliers will have to make competitive offers, or else not sell anything.

Transporting something from a place where it's cheap, and to a place where it's worth more and sell it there is a fundamental function of trade. We'd all be a lot worse off if that wasn't possible.

Frankly, I don't see why the US govt or the EU hasn't cracked down on this bullshit a long time ago (at the very least when the DVD-standard was launched with artificial barriers to trade baked-in)

Two words: charge back

[mattbee]

If you didn't get what you believe you paid for, ask the vendor for a refund. If the vendor refuses or ignores you, ask your credit card company to charge it back to them, and they can pick up the tab for their DRM silliness. I happen to love Steam, but not more than my rights as a consumer. Steam is working very nicely for me now, but I know my rights and if Valve take away my games (which they can certainly do if they feel like it), I am within my rights to charge back everything I've paid them in the last two years, and there's nothing they can do about it. This is the only way to tell companies that their DRM isn't working - be on your guard and don't let vendors forget their responsibilities to play fair.

Re:Methinks Zonk needs to work on his woriding...

[harrkev]

Wow. You basicly have to ask permission from the company before you can use their products. It is not a matter of "if" this would happen, but more a matter of "when." If you give big companies powers like they, they WILL eventually abuse them.

I would describe myself as more of a casual gamer, but crap like this (and what happened with Bioshock) makes me want to completely avoid PC gaming entirely and stick just with consoles. My Gamecube will happily play any game I stick into it, without requiring an internet connection.

I recently re-played my old copy of Fallout (great game, BTW). I would have been completely pissed if I couldn't play it because of some sort of hare-braned activation scheme. What happens if you want to pull out your copy of Orange Box and play it ten years from now? Will you be able to?

Valve Reality Distortion Field

[Tackhead]

Ah, the Steam/Valve Reality Distortion Field rears its head again.

It doesn't matter how evil the DRM, when Valve does it, it's OK!

More than a decade after MPAA invented region-coded DVDs explicitly to protect deals with distributors, it's still an affront to us. But when Valve does it, hey, it's "just something they put something in to protect deals with distributors".

Product activation and phone-homeware is just as bad an idea when it's called "Steam" as when it's called "Windows Genuine Advantage".

Cozy deals to fuck over the consumers in favor of artificial segregation of distribution channels are just as defective by design whether they're called "Steam" as when they were called "Region-coded DVDs".

The Steam may be delicious and moist, but it's still a lie.

Steam is no triumph.
I'm making a note here - EPIC FAIL.
It's hard to overstate dissatisfaction...

Valve's DRM scheme,
It does what it must, because it can.
For the good of none of us, (except the ones who wear suits.)
But there's no use crying over software that breaks
You just keep on paying 'till you run out of cake
And the damage gets done, and the DRM's won
For the people who are selling lies.

Re:Misconceptions running rampant

[Anonymous Coward]

Steam games are sold in those countries at a tiny fraction of the US retail cost.

So the fuck what? Chinese labor costs a tiny fraction of the money that you would have to pay a US worker. That doesn't stop anyone from buying manual labor where it's cheap and selling products at insane markups at home. If you put that genie back into the bottle, we can talk about not buying your products where we want and using them somewhere else. Can't have it both ways.

Re:Misconceptions running rampant

[NMerriam]

Do you think people should be able to buy 500 copies of the the Thai version for the equivalent of $5 USD each, and turn around and sell the keys online for $20 a piece, and have them work just as well as a $50 US key?

Well, yes, why not? Wal*Mart can buy shoes from Thailand for $5 and sell them here for $20, when American-made shoes of the same quality and materials would cost $50. That's supposed to be a good thing, at least that's what we tell the Americans when we close down all the shoe factories here because the shoes are cheaper from Thailand.

Re:Misconceptions running rampant

[cubic6]

This is false -- they bought keys from companies that bought Thai/Russian retail boxes and sell them online. The deal that I found (Already bought the 360 version, so I didn't get it) was from a well-known Thai vendor selling the key at the regular Thai price -- and they would ship the disc/box to you with it if you wanted it. There was no scam, there was no middleman, and no indication (other than in the novel-length EULA) that this was anything other than a good deal.

The scam was that they didn't tell you that the keys were region-locked, which is stated ON THE BOX in those regions. It's possible that they didn't even bother to look at the box, but in that case they're just idiots, not scammers.

Re:F Globalization!

[anlprb]

I am well paid and I have lots of disposable income. Guess who lost a nice chunk of that revenue stream? They haven't had me as a customer since steam. I have the first version of Half-Life that doesn't require steam. That was where they lost me. Treat me like an equal in the transaction, we can talk. Treat me like a thief at every turn, I walk away. And they won't know how many of my friends and relatives I have convinced that way as well. Word of mouth is wonderful advertising, or a horrible fire you can't stop.

You want to know why it's legal for them, not you?

[Torvaun]

Because you can't afford a politician. That's why.

Re:Methinks Zonk needs to work on his woriding...

[rabiddeity]

So what happens if I'm a U.K. citizen vacationing in Germany and I happen to buy Orange Box online while I'm there? What if I'm a U.S. service member stationed in Germany (yes, there are still U.S. bases there) and I buy Orange Box online with my U.S. credit card, from Germany?

We have a word for products that "don't work" out of the box. It's BROKEN. Nonrefundable doesn't apply if you sell me a retail product that is broken. I wonder what EU and German common contract law have to say about this...

Protectionism or free market?

[mcvos]

It's obvious that they make more money this way, but the question here is: do you really want a free market or not? Suppose I bake bread. One customer is rich, and can easily afford to pay $5 for my bread, another is poor and can pay only $0.5. Should I sell each for what they can afford or should I set one price for everybody?

Are free market and globalisation only for the big players, or should they be for everyone? Suppose a company is looking for labour, and they can buy it here for $50 an hour or overseas for $10 an hour. They think they can save some money by importing labour from abroad (or having their work done there), but when they import the goods, the government suddenly says: "since you didn't buy your labour in the local market, you can't sell those goods here." That's basically what's happening here. It's a kind of protectionism.