Xbox 360 to launch in Europe on November 25 at 299 UKP

[mesyn191]

Vysez: I'm going from personal experience talking with a friend who worked for a clothes company that sold stuff overseas and in the US, to hear him talk it was hell dealing with the EU tax bylaws, and that was just clothes...

So like I said feel free to call BS but unless you guys bring in comments from a EU Tax expert I'm going have to question the comments that MS is just doing this to be greedy, as even for them this is waay over the top.

Also I was just replying to what PC999 posted re: PS3 costs...

 

[Mariner]

I'm amazed that some on this board think that there are sensible reasons for the way in which big companies rip us (Europeans) off as compared to the US!

Here's just a quick example. If you go to the Adobe store to buy the top end Creative Suite 2 Premium edition in the US, you will be charged $1,199. If you buy exactly the same product in the UK Adobe store it will cost you £ 895 before tax. At current exchange rates this is equivalent to $1,592. Why do Adobe charge British customers 33% more for exactly the same piece of software? Is the packaging hugely more expensive over here or something?

Here's another great one: Buy a Dell 2405FPW in the US and you can get one for $899 + shipping costs. Here in the UK, £729 ($1,296) + tax + shipping costs. This means that we're paying a mere 44% more than our US friends for exactly the same product.

As london-boy says, you can almost guarantee that the price of the XBox360 in the UK on release will be about £300 on the shelves. Removing 17.5% VAT from this figure leaves us with £255, equivalent to $453 - a mere mark-up of 51% over the expected US price.

Even if the on the shelf price was £250, the mark-up compared to the US would still be over 25%. Of course, once we add our sales taxes on top it becomes even less attractive. The big companies perform price-gouging on Europeans to help subsidise the US market.

As the European market is now of an equal size to that of the US, I wonder how long they can get away with this for?

 

[Urian]

The problem is that thanks to the incredible EU laws the console will cost the same in all the European Union.

 

[Titanio]

Yes, the Hungary plant was shut down after the first year.



The US doesn't have very high import tariffs at all. Japanese products are very cheap here compared to everywhere else.

And US companies that have manufacturing done in Mexico or Canada do not have to pay import taxes at all. Thanks to NAFTA, these items are duty-free.



As I said, there are also the shipping costs, and the added cost of localization (Which includes different hardware, as well as language issues), and since every European country has it's own tax, in order for MS, Sony, or Nintendo to offer a single price across Europe, they have to charge everyone the price that the most expensive country in Europe would charge.

I've already covered import duty, VAT and localisation costs.

Again:

Base price: $299
Import Duty: 2.2% (as of the last launch of consoles at least)
VAT: 25% (highest rate in the EU)

= $381.98

= €308.85

If a system was priced at €350, you're talking about a $51 discrepancy vs the US price, after you've factored in VAT and import duty.
If a system was priced at €430, you're talking about a $150 discrepancy vs the US price, after you've factored in VAT and import duty.

In neither case would localisation cost and shipping cost justify that. They don't attach golden wings to each unit and fly them to your door! And let us not forget that the US price is also subject to import duty and shipping costs (and some localisation costs too if all NA units cater for the French language).

How was Nintendo able to introduce GameCube at a mere $16 markup over the US price? Heck, using the above figures, it should have been more expensive than that. ($200 + 2.2% + 25% = ~$255 before you factor in shipping and localisation, but they introduced it for the equivalent of $216). That illustrates that fairer pricing most certainly can be done,a nd that calculations like the above are quite conservative. It seems likely that tax etc. is calculated on ower figures than the standard US price (making the ripoff even worse).

Undoubtedly Europe is used to offset cheaper pricing elsewhere. One wonders what the market could be like here if pricing was on a par with the US or Japan (the market is already quite a bit bigger than Japan, and gaining on the US).

edit - highest VAT rate in the EU is 25%, changed figures accordingly

 

[Tim]

You guys haven't even scratched the surface of all the tariffs involved man, you can call BS if you like as I don't want to start posting about them as I don't know enough to really talk about em', but really go talk to a EU rep about it, they can get pretty crazy...

That is complete BS, I have some experience in imports from outside the EU (both personal and professional). The tariffs are completely public and in usually in the range of 0-5% (some things has higher tariffs, like jeans where you have to pay 12%) there are no additional import tariffs but some administration fees (but they really do not matter with large scale imports). Generally the EU import tariffs are in the same range as in the US.

Something that really can eat some money is if you need to have some certification made, but with millions of consoles the per unit cost will be pretty much non-existent.

 

[Tim]

VAT: 21% (highest rate in the EU)

Actually some countries (Denmark and Sweden atleast) has has a 25% VAT

 

[Titanio]

Actually some countries (Denmark and Sweden atleast) has has a 25% VAT

Yeah, I thought Ireland was highest, but I've edited the above to match that now..

 

[pc999]

Also I was just replying to what PC999 posted re: PS3 costs...

I hasnt talking about PS3 costs, just saying that is easierto sell the ONLY console in the market than 1 OPTION. And once they want a good start (thus lauching early), that goes against that objective.

 

[Platon]

£300??? Didn't they say they will not do the same mistake as they did last time? Well, this time I will wait a couple of weeks until th rice goes down . The absolute maximum I will pay is €350, if nothing else out of principle...

 

[Platon]

Actually some countries (Denmark and Sweden atleast) has has a 25% VAT

And boy aren't we happy about that ...

 

[mesyn191]

That is complete BS, I have some experience in imports from outside the EU (both personal and professional). The tariffs are completely public and in usually in the range of 0-5% (some things has higher tariffs, like jeans where you have to pay 12%) there are no additional import tariffs but some administration fees (but they really do not matter with large scale imports). Generally the EU import tariffs are in the same range as in the US.

Something that really can eat some money is if you need to have some certification made, but with millions of consoles the per unit cost will be pretty much non-existent.

Then I don't know what he was talking about but it sure didn't sound as simple as you guys seem to be saying...

PC999: my bad.

 

[jvd]

That is complete BS, I have some experience in imports from outside the EU (both personal and professional). The tariffs are completely public and in usually in the range of 0-5% (some things has higher tariffs, like jeans where you have to pay 12%) there are no additional import tariffs but some administration fees (but they really do not matter with large scale imports). Generally the EU import tariffs are in the same range as in the US.

Something that really can eat some money is if you need to have some certification made, but with millions of consoles the per unit cost will be pretty much non-existent.

If its publisc can you get us the % on video game systems and games ? Since you obviously show that on some things your looking at 12% . How do we not know that other things aren't 20% or 30% ?

Then factor in shipping , warehouse fees , stocking fees and other odds and ends and you can be pretty high up there in a price preimum .

 

[Titanio]

If its publisc can you get us the % on video game systems and games ? Since you obviously show that on some things your looking at 12% . How do we not know that other things aren't 20% or 30% ?

Unless there were some drastic changes since the last round of systems, import duty on videogame systems is very low (2.2% at the time of the PS2's launch). In fact, it could have been 0% if they classified it as a computer.

Then factor in shipping , warehouse fees , stocking fees

I didn't know shipping, warehouse fees and stocking fees were gratis in other territories.

The Nintendo example should be the biggest clue yet that this kind of markup is not justifiable!

 

[jvd]

Unless there were some drastic changes since the last round of systems, import duty on videogame systems is very low (2.2% at the time of the PS2's launch). In fact, it could have been 0% if they classified it as a computer.

where are u getting this 2.2% fee ?

I didn't know shipping, warehouse fees and stocking fees were gratis in other territories.

If you produce a product in the usa for usa stores. YOu ship the product to the stores warehouse . I.e gamestop has warehouse facilitys . Toys rus has warehouses . Every major chain has them .

If you ship to europe . You have to ship it to a warehouse for storage then to the boat for deliver then when you get the product to that country you then have to ship it to another warehouse till it is shipped to the local stores or other warehouses .

You might be able to skip one of those steps depending on what conditions are like in that country .


There are a ton of factors involved and Since the only company i see not charging more for europe is nintendo where as sony and ms are there is something going on .

I highly doubt they would charge so much more which will only serve to hurt them sales wise if they oculd avoid it .

 

[Titanio]

where are u getting this 2.2% fee ?

That was import duty for the EU on PS2. Sony was trying to get the PS2 classed as a computer so it could be 0%. I doubt things have changed so much.

If you produce a product in the usa for usa stores. YOu ship the product to the stores warehouse . I.e gamestop has warehouse facilitys . Toys rus has warehouses . Every major chain has them .

Thing is, consoles aren't manufactured in the US. Nintendo's/Sony's are made in China and Japan, MS's in Mexico.

There are a ton of factors involved and Since the only company i see not charging more for europe is nintendo where as sony and ms are there is something going on .

Yes, it's called "fleecing the consumer". Nintendo is in no better a situation with regard to import duty, VAT & localisation etc. vs the others.

I highly doubt they would charge so much more which will only serve to hurt them sales wise if they oculd avoid it .

If they're all doing it, what can the consumer do? Unfortunately the lure of Nintendo was not strong enough to break this mould

 

[mrdarko]

hi all,my first post

has someone that lives in the uk i can tell you that we are ripped off on everything!

consoles are no exception.

the best example i can give you to prove this? downloadable software!

a well known image editor in the u.s costs $599 and in the u.k £538 thats $956 at
current exchange rates!

no box,no shipping,no manual,why the difference?

there are also products made not 50 mile from where i live that are cheaper in the u.s!

sorry for ranting

mrdarko

 

[jvd]

That was import duty for the EU on PS2. Sony was trying to get the PS2 classed as a computer so it could be 0%. I doubt things have changed so much.

Since 2000 ? ALot has happend , dollar weakening euro coming about .

Thing is, consoles aren't manufactured in the US. Nintendo's/Sony's are made in China and Japan, MS's in Mexico.

Once again ms's will come strait from the source into the companys warehouses (gamestop has one in south texas which is one of our main warehouses (we also have another one in edison new jersey and I belive one in the west coast )

At the main ms factory they are also housed and shipped there to our places , the same goes with all the big chains . Thus ms pays for one storage and only trucking . There are many more when you go across oceans

Yes, it's called "fleecing the consumer". Nintendo is in no better a situation with regard to import duty, VAT & localisation etc. vs the others.

Yet nintendo is the one that was having a hard time selling thier systems dispite the huge rip off you claim otherp roducts are

 

[Platon]

Since 2000 ? ALot has happend , dollar weakening euro coming about .

So one would think that a strong Euro compared to to the dollar would lead to a cheaper console, but that does not seem to be the case...

 

[DVFtaxman]

Import duty rates can be found at http://europa.eu.int/comm/taxation_customs/dds/en/tarhome.htm

For the EC fiscal member states, VAT is also chargeable on the total cost (including import duty) - in the UK VAT is currently at a rate of 17.5%, but this varies from state to state

 

[Snyder]

Import duty rates can be found at http://europa.eu.int/comm/taxation_customs/dds/en/tarhome.htm

For the EC fiscal member states, VAT is also chargeable on the total cost (including import duty) - in the UK VAT is currently at a rate of 17.5%, but this varies from state to state

Ahh, thank you - the eu.int site is more horrible than microsoft.com when it comes to finding what you're looking for.

So - Video Games import tax (Edit: from China and several other asian countries, where EU XB360 will most likely be manufactured) is zero. Well, one more reason why this huge price difference isn't justifiable IMO with higer costs.

Just take a look at computer (part) prices - the price differences are far lower.
For a rough example, I compared prices for the 7800GTX on pricewatch.com and geizhals.at (prices for Germany and Austria mainly):
Pricewatch
Geizhals

There's only a 3,5% difference between those (after substracting VAT from the latter), if you compare the cheapest model on Pricewatch with the same model on geizhals.
If you look at all available models, there is one (Club3d) that's even cheaper narrowing down the difference to 1%. (Well, and it looks like the Leadtek 7800 has experienced a huge price drop over the last few days - down to 406€. Looks fishy, especially because only a few shops have these extremely low prices - with none available...)

Just noticed: An A64 3000+ is even cheaper over here at the moment...