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Ask HN: Why is software priced the same around the World?

1 points by sprafa ↗ HN
Do software companies realize that if they were to offer localized prices for poorer countries (read: not in the top 10 of global income) tons of people from India or even poorer european countries might buy it instead of pirating/ignoring it? If they are why don't they do anything about it?

It seems to me like companies are ignoring the fact that 20 000$ + annual incomes and salaries are common only in America and a few other countries in the World. As soon as you reach Latin America, Southern and Eastern Europe and the Middle East the median income changes a lot. Yet almost all software is sold for exactly the same price in all of these regions, often for prices that make sense for American or highly developed European nations but become prohibitive in slightly poorer nations. Even in Europe and the EU, there are disparities in median income that would justify changing the price according to the country you're selling it in, take a look at this map - https://en.wikipedia.org/wiki/List_of_European_countries_by_median_wage

What are the major costs to simply localizing prices according to median income, considering distribution is free and manufacturing is already (I assume) paid for by the main markets? Aren't companies just leaving money on the table in the form of income from poorer countries by pricing themselves out of the market? The only thing can think of that keeps them from doing this is customer support, in that having enough people to maintain proper support in those regions is more expensive than actually selling the product at 50% off.

6 comments

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detaro
Quite a bit of software is priced differently in different parts of the world.

Managing that and preventing people from just buying it in cheaper countries needs complicated DRM systems, which probably is why only big companies that have those do it (Adobe, games on Steam, Microsoft, ...)

+ all the usual arguments why an expensive product with fewer customers might be better than a cheap product with many customers (support costs, image, ...)

sprafa
They're generally not priced down.

European countries get more expensive versions of software because the price is often converted into the same amount in euros, which ignores the fact the euro is priced higher than the US dollar. And it's not about VAT either - often you pay for VAT outside of the marked price anyway.

detaro
Office 365 is ~40-50% cheaper in e.g. India than it is in the US or EU. Same for Adobe Acrobat. I remember Office 2007 had African pricing at ~50% of US. Steam game prices are all over the map for US/EU/UK (often vast differences, but no clear "winner"), but are very often cheaper in e.g. Russia (which is why Steam stopped people from outside Russia buying steam games there).
pknight
The cost of supporting a customer is typically fixed for a vendor regardless of what price the software is sold at. Supporting customers who paid less relative to the costs can be hard to justify. It could even lead to a net loss, so it's understandable that we don't see that much differentiation in the price for different countries.
sprafa
Are software profit margins really that slim?

How big is customer support in the final bill per consumer ?

pknight
Depends on the software but its easy to overlook. I'm just a solo dev, so every hour I spend on customer support is an hour I'm not doing product development, marketing or generally something that is a leveraged use of my time. For customers who pay less, that time is even less leveraged.

Also, for customers who don't have a strong command of english there's translation work, misunderstandings in customer service communications that are more likely to happen, pressure to provide documentation in multiple languages...all very time consuming and thus disproportionately more costly if you are doing that work with less margin flowing back.