By Claire Reilly
The man responsible for Harvey Norman’s PC and console gaming division has criticised Australian retailers for creating a “false economy” in gaming, and giving consumers an unfair deal on prices.
Ben McIntosh, the head of Harvey Norman’s computers division, said the gaming market in Australia is overpriced because it had failed to adjust to global pricing. However, he added that “there’s more to it” because the top three gaming retailers in Australia have a vested interest in keeping prices high.
“I believe that gaming in Australia is held up because of the trade-in price and the trade-in market,” said McIntosh. “The retailers that are involved in trade-ins have an active interest to try and keep the price of gaming so high so there's a value in the trade-in market, because most of them make a lot more profit in the trade-in than they do in the new games.
“So Australian consumers are in a false economy. They pay $100 for the new game, because their trade in is worth $30 after a couple of months of using it. Yet we [Harvey Norman] are selling games on our site for $50, so they’re actually worse off."
While it’s only early days for Harvey Norman’s direct import gaming website (which was launched last December), McIntosh said that greater buying power allowed retailers to bring lower prices to consumers.
“The Harvey Norman Ireland buying power is not as strong as it can be, so I’m bringing in games now at this pricing, but it’s only the beginning. Imagine what happens when I build up my buying power in Europe.
"But the Australian suppliers are keeping the price high because the top three gaming retailers want to keep it high – they want to fund the trade-in market. The Australian consumer is much worse off because of that.
“My argument is that Australian consumers wouldn’t need to trade them in if the games were sold more reasonably,” he added. “There’s no issue of warranties or safety on the product, quite frankly.”
It is this perceived fault in the Australian gaming market that led McIntosh to support the idea of direct importing of games, which allows the consumer to access product at a more globally-standardised price.
“The customers are much better off direct importing and that’s why we’re doing it,” he said. “My ultimate goal for gaming is that Australian suppliers sell to the consumer at the global pricing.
“I’ll stop direct importing gaming when the Australian suppliers react to global pricing and the Australian consumer gets a good deal.”