Grey Market Blues

We, the people who pay for games software, should be able to buy our game media from any region of the world (as we can with the handheld Nintendo systems) and play those games at less total cost than that of purchasing a second (or even a third) console which is essentially identical to the one we already own.

Yesterday, my PS2 died. It just stopped powering up, and its little red power light gave out a weak repeating blink… I immediately went out and bought a new snazzy slimline silver PS2, which is so small and cute it makes the GameCube I own look like a titan, and the Xbox I don’t own look like Galactus.

The death of my PS2 was especially sad as this was a chipped PS2. Yes, I owned a PS2 with a modchip despite the fact that these are illegal in the UK. What is more, I intend to purchase another one – if I can find a way to do so. But I am not a pirate, nor do I have any interest in piracy. By way of explanation, here is the full text of a rant entitled ‘Free the Grey Market’ that used to be on the ihobo website several years ago.

Free the Grey Market

The grey market... broadly speaking it consists of die hard gamers getting modchips for their consoles in order to play imported games. But the modchips also allow them to play pirated games, which is something the console manufacturers are keen to stamp out.

As I write, a landmark court case in Australia sees the ACCC (the Australian Competition and Consumer Commission) going to war against Sony. Sony wants to prevent consumers playing Playstation 2 games they have bought abroad - the ACCC claims there has been a violation of various consumer rights and Australian cartel laws.

Although I would broadly agree with the argument that the regional encoding of games is against the best interests of the consumer, and also concur with the ACCC's assessment that the legality of regionalisation may be suspect, there are issues beyond the consumer's freedom of choice that are worth considering.

In particular, one must bear in mind the plight of consumers from countries where English is not the first language (which covers almost the whole of Europe, with a few obvious exceptions). The cost of localisation into other languages is non-trivial, and indeed forms part of the reason that the large publishers end up delivering content to Europe last.

Without a framework for regionalisation, there is a risk that Europe would become flooded with product from the US territory (since many European gamers speak fluent English) making it unlikely that publishers would then choose to invest in converting to other European languages because the market would be undercut with imports. This is detrimental to both the publishers and the casual market across Europe as a whole.

None of this excuses the publishing world's attitude to the grey market, which largely consists of loyal, hardcore gamers with a willingness to play great (and obscure!) games regardless of which language they are presented in. Nintendo should be careful about engaging iconic hardcore gamer havens like London's Computer Exchange in legal battles over imported consoles. Why impede early adopters acquiring your console as soon as they can? These people are the emissaries for new console formats who collectively can add more to the positive public perception of a console format than any ad campaign, albeit in a behind-the-scenes and largely immeasurable way.

All of these issues would be resolved by simultaneous releases across all territories, which would largely remove the need for regional encoding. But of course, this is an expensive business. There were good reasons that the cinema industry chose to test the water in one region before another, principally aimed at saving the cost of releasing a film expected to bomb after it has failed in one territory. The games industry has simply followed suit.

Another solution might be to separate the encoding functionality into a copy protection element and a regional element. This would remove the publishers complaints that modchips are aimed at piracy and allow for a chip that only overcomes regionalisation. Such a chip would be far less contentious, but could only result from a dramatic change of attitude to the grey market and this seems extremely unlikely at the current time.

By releasing an official 'all regions' adaptor to the consumer market, console manufacturers (and retailers) could gain additional revenue for selling the privilege to accept products from all territories. The majority of consumers would be unlikely to bother with the extra expense, whilst the hardcore gamers would have freedom of market choice for a reasonable fee. This seems a vastly superior solution to the 'brush it under the carpet' approach that has currently been applied.

Prohibition scenarios never stop the activity they are targeted against, they just drive it further underground. The only way to separate black market piracy from grey market globalism is to cater for the needs of the global market in a mature and responsible fashion. It remains to be seen if this can be achieved.

In the end, the Australian courts decided that modchips were in the best interest of the Australian people – because otherwise Australians would hardly see a fraction of the games being released elsewhere in the world. I was so relieved to hear this, because in the UK modchips are now completely illegal, and those of us with a legitimate use for them have been hung out to dry by the legal system. At least one country’s courts are willing to stand up for their people.

It is not reasonable that I am expected to buy an identical piece of hardware to the one I currently own just to play media from another region. Sony already makes money when I buy an imported game (the publisher still pays a platform license fee whichever country I buy it in) – they don’t need to charge me an extra $149.99 for another PS2 when I have already paid them for that hardware.

I am willing to pay a fee for an ‘all region adaptor’. Are Sony willing to make one? Because if they aren’t, then I say – we will modchip them on the beaches, we will modchip them on the internet… we will modchip them until they stop screwing us around.

If Sony want to stamp out piracy then they must first legitimise the grey market. The ruling in the UK is unjust, and places the needs of the corporations above the needs of the people. It should be overturned. But I have no idea how to even begin to do so.

Comments

[lordxixor101]

Well, I live in the states, so releases aren't nearly as bad here. But, this really boils down to a purely economic issue. Anyone who has taken some intermediate economic classes knows that companies love to differeniate customers as much as possible. This is the real reason for the different regions. If the companies can stop importing, they can charge different customers different prices, and each market would have to pay it. If the markets opened up, then the cheapest prices would rule. Because of this, I doubt an all region adapter will be in the works, unless Sony (or anyone else) could charge a fortune for it. And, let's be honest, if you can mod chip for $50 or $75, you aren't going to pay $200 or $300 bucks for an all region adapter.

[Chris]

An all region adaptor would have to be less than the cost of the console itself, of course. I was thinking $50 would be reasonable.

I agree with your point about controlling prices - except that I happen to believe that if we're going to have an open market economy it should be, well, open! :)

Devices to bypass regional encoding of DVDs did not destroy the seperate markets for DVDs, and the same should be true of games. Since the vast majority of people would not own an all region adaptor, shops could not by default import the games from other regions - there's only a strong economic argument if *everyone* buys an all region adaptor, which isn't ever going to happen.

As a case in point, GameBoy and GameBoy Advanced games are *not* region encoded - but European retailers do not import from the US, even though on paper there is a potential cost saving (especially for the UK where dollar prices equate to pounds in retail despite a 2:1 currency exchange rate).

If the problem you allude to does not occur in the handheld games market which is already free of regional encoding, it is surely paranoia to suggest it would occur in the home console market.

[James O]

I never really could understand the purpose of regional coding - it doesn't make the company any more money to seperate regions. It's not like a universal region would cause consumers to buy less - in fact, it would only cause them to buy more; perhaps even buying titles twice, once in the original language and then again in their native language. I'm sure there's a reason for doing it somewhere, but it's not transparent to me.

Of course, one issue that can't be overcome so easily would be the PAL vs NTSC conversions. Even with a universal region, I wouldn't be able to import European console games. There might be a theoretical way to solve that in hardware, but ultimately unless we get a global TV standard I think there will be regional barriers regardless of company policy.

Thank goodness that PCs don't have any of this nonsense, or should have missed out on Richard Burns Rally. :)

[Chris]

In the UK, our TVs now support both 50 Hz and 60 Hz modes (both NTSC and PAL)... and there's plenty of titles we just don't get.

For instance, without my chipped PS2 I currently cannot play Katamari Damacy, Front Mission 4, and Horse Adventures - all of which I was playing until yesterday. These games don't have a European release - and probably never will do.

[Corvus]

*psag* You're not getting Katamari?! That's just... wrong.

I want me some of that PS2 lovin'. I may have to count out the change under the couch cushions and see what I can do this Christmas when the sales are on.

[James O]

"In the UK, our TVs now support both 50 Hz and 60 Hz modes (both NTSC and PAL)... and there's plenty of titles we just don't get. "

But aren't the animations keyed differently (ie for 60fps vs 50fps?) I suppose since you could play Katamari (which is NTSC only I gather) then I suppose that's not an issue (perhaps because the game is written for 30fps?) I could have sworn I read in some post-mortem about the artists having to alter 3D animation keyframes to fit PAL refresh rates.

[Chris]

All I know is that my chipped PS2 ran games from all territories without blinking. If the Messiah chip can fix regional differences, an all regions adaptor could do the same.

As for the break in my Katamari rolling... well, fortunately we were all but finished (just a couple of gifts and comets to go) - I just have to hope EA ships the European version of Namco's 'Everybody Loves Katamari' soon...

[Neil]

Sorry to hear your PS2 died. I imagine the newer slimline PS2's are harder to mod, but I haven't heard much about them as I use the memory card "hack" to mod my PS2. It's nice 'cause you don't need to crack the case or do any of that soldering nonsense... ;-)

It has its limitations, but a side effect is needing a harddrive for the PS2 which I like the idea of...

Even TVs that cannot show NTSC signals here in the UK can be helped with the purchase of "boosters" which allow you to see the picture in colour, even on PAL TVs that cannot show 60Hz properly. They cannot stop the vertical hold issues though, so they only help if the TV shows the game as a stable but black and white picture.

I think these devices should be available the other way around, allowing NTSC TVs to show PAL games. Mine cost 15GBP so, maybe about 30USD??

Now I can play import versions of games (yay to Makai Kingdom!) in glorious color (sic.) should I so desire.