In the upcoming presidential run-off, Argentines will decide between a candidate who wants to keep the peso as the national currency and another who vows to abolish it in favor of the US dollar. But on the day after the elections, one significant sector of the economy will be dollarized for Argentine customers no matter who wins — video games.
Starting on November 20, American digital video game store Steam, the biggest in the world, will start displaying its prices in US dollars for Argentine users for the first time since 2017. The decision will also be enforced for Turkey.
According to an official communiqué by Steam, the reason is that “exchange rate volatility” in both countries has made it hard for developers to appropriately price their games. “Constant foreign exchange fluctuations, fees, taxes, and logistical issues” have given the video game platform a “hard time” keeping their payment methods up and running.
They are not wrong — in Argentina, inflation for the first nine months of 2023 was 103.2% and the peso (as per the official exchange rate) plunged by 96.5 % in the same period.
Gamers all over the country know exactly what’s coming for them — not only a currency change but a huge increase in prices. That’s why some are buying every game on their wishlist.
“I just bought ‘Days Gone’ for AR$2,800,” Santiago Diz Besso, a 19-year-old gamer from San Luis, told the Herald. The same game — a 2021 action-adventure zombie slasher — costs US$16.50 in the United States. That’s quadruple what Diz Besso paid, coming to AR$12,135 at the “card dollar” exchange rate. He’s planning on hoarding video games before dollar doomsday.
“We have to make the most of it before everything goes to shit.”
Loose cannon currency
“Steam is not very prepared for countries with high inflation like Argentina and Turkey,” Javier Otaegui, co-founder of Argentine video game company Tlön Industries and director of the Per Aspera video game.
Otaegui, who published his share of games on the platform, knows first-hand how the Steam pricing system works. When games are released, the platform recommends the price for every country based on purchasing power parity. But a country like Argentina represents a problem for that equation.
“The value of our price has run away from us,” Otaegui said. When his company released Per Aspera in 2020, it was AR$330. At the time, that was US$4 at the official exchange rate whereas now, it’s worth slightly less than one dollar. The company updated the price once to AR$500, but that value also dwindled as the Argentine peso continued to depreciate.
“If I updated the original price factoring inflation now, the game should be AR$2,000 in Argentina. But we can’t afford to change it again.”
There are several reasons for that. First, due to Steam’s policies, game prices are not automatically updated. “You have to do it yourself,” Otaegui said. “They are not going to install an automatic inflation algorithm for Argentina.”
Second and most important, when a developer makes any price changes, Steam forbids them to promote their games on the platform for 30 days. “After the second year since its release, 80% of any game’s income comes from promotions. And Argentina is only 0.5% of the worldwide video game market, so most developers leave their prices for the country unchanged.”
That’s not all — Steam recently forbade any game from costing less than one dollar. “We are kind of scared,” Otaegui said. “If the official rate goes beyond AR$500, we will be effectively banned in Argentina. We already can’t sell it in Argentina when we have a worldwide sale.”
The fact that prices in Argentina lag behind other countries creates an extra problem. “A lot of gamers from other countries are using VPNs to pretend they are in Argentina and get lower prices,” Federico Espósito, CEO of Argentine game company Sureksu, told the Herald.
Developers all over the world complained about these issues, Steam said. “We have heard this loud and clear in our developer meet-ups and round table chats,” the platform said in its press release.
In response, Steam decided to eliminate both the Argentine peso and the Turkish lira from their payment methods and created two areas encompassing twenty-five countries. The “Latin American US dollar” (which includes Argentina) and the “Middle East-North Africa US dollar” (which includes Turkey). To calculate the prices, they will take into account the economic situation of the countries in those areas, but will use the US dollar and not the Argentine peso or the Turkish lira.
Espósito says that since Argentina is a small portion of the market, national video game studios won’t be affected, except for games that are specifically designed for the country. “Latin America as a whole represents less than 5% of the world’s video game purchases.”
However, both Espósito and Otaegui agree that gamers will suffer. “Pes Aspera will increase its price by 15,” Otaegui said as an example and said he expects a rise in piracy. “Steam was too cheap, and PC piracy was virtually non-existent.”
“The mega-party is over.”
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