Valve has made changes to its regional price recommendation system that should make life easier for developers, but could also result in higher prices for games in some countries.

Steam currently supports 39 different currencies, which means that developers, especially smaller indie developers, are dealing with a lot of money; as Valve stated in today's announcement (opens in new tab), it's easy to price your latest title at $20, but what would it cost in Qatari Riyals or Norwegian kroner, how much would it be in Norwegian kroner?

"While we think it's a useful guide, purchasing power and exchange rates are constantly evolving, so we had to make significant changes to the recommended conversion rates to keep them current," Valve said in its price recommendation update.

"We are also committed to maintaining the value of this guide by reviewing our prices on a regular basis. We scrutinize these recommendations on an annual basis and make adjustments accordingly."

That all seems very reasonable. However, the new recommended prices shared on Twitter by SteamDB (opens in new tab) reflect some surprising price increases. For example, for the $59.99 game, the recommended price for the Turkish lira jumped from ₺92 to ₺510, a 454% increase. The Argentine peso rose further, from A$649 to A$3800, a 485% increase. Other price increases were not as large, but still worth noting: the Russian ruble, the price recommended by Steam, rose 75%, the Indian rupee 80%, the Kazakhstan tenge 97%, and the Polish zloty 28%. Even my favorite, the Canadian dollar, was up 13% related to inflation.

To be clear, these price increases do not reflect actual price increases on Steam, only the pricing Steam recommends to developers, and developers are free to charge whatever they want in whatever region they want. Nevertheless, some games may be affected: busy indie developers who are trying to release their games on Steam will not want to spend a lot of time setting their own prices for Colombia or Switzerland, for example.

In particular, prices in Turkey and Argentina have risen significantly, possibly due to Valve's efforts to curb region swapping, the practice of using VPNs to purchase games at a lower price (opens in new tab). Some developers have taken individual steps to combat region swapping: Motion Twin, for example, raised the price of Dead Cells (opens in new tab) in Turkey and Argentina earlier this year.

"The percentage of total sales from a country is roughly equal to the percentage of total players from that country. In the case of Argentina and Turkey, the percentage of total sales is three to four times the percentage of total players."

"Not coincidentally, the prices of Dead Cells and DLC in these two countries are by far the cheapest on a dollar/euro basis, so it is extremely likely that they are changing regions to take advantage of the 70-90% price reduction."

Exchange rate fluctuations also affect the recommended pricing for each region, but Valve says that is not the only factor. From the updated Steamworks pricing page (opens in new tab):

It is tempting to treat pricing as a simple exchange rate issue and tie each currency's equivalent price to the exchange rate. However, such a strategy greatly oversimplifies the different economic conditions in different regions. In addition, exchange rates have an impact on the macroeconomy, but generally do not have a short-term impact on individual consumer purchases.

Our price proposal process goes beyond simply pegging prices to foreign exchange rates to the essentials of what players are paying for goods and services in their lives. This includes indices such as purchasing power parity and the consumer price index, which help us make broad comparisons of prices and costs across different economic sectors. In the case of Steam games, however, it is more specifically focused on entertainment purchases, making its decision-making more precise.

All of these factors allow us to update these price recommendations more regularly and to keep them responsive to changing economic conditions over time.

Even with the recommended price increases, many games in these regions remain considerably cheaper than their U.S. pricing: AR$3,800 is about $24.50 and ₊510 is $27.40, each still less than half the price of a game in the United States. However, the rate of increase is significant, and the net profit per capita in these countries (and many others on the list) is significantly lower than that in the United States. Developers who adopt the higher recommended prices may see fewer region swaps, but consumers in the affected regions will experience greater economic stress. [Because] big publishers don't care about recommended prices anyway, and generally set them higher. Redditor SchrodingerSemicolon (opens in new tab) writes: "RE4 remake was 25% above the new price even before the change, and FIFA 22 (yes, last year) was twice as expensive." redditor SchrodingerSemicolon (opens new tab) writes:" This will only raise the overall price of the game, which previously followed [the guide]."

But indie games are a different matter, because, as several redditors noted, indie developers are most likely to follow the pricing recommendations. Indonesian gamer arhcerwartune (opens in new tab), in a Reddit "cry of frustration," wrote, "I took a big hit, +30% to +73%, on games in the $10-$30 indie spot. I understand that it's due to inflation and all, but it's defeating the purpose of regional pricing.

I have contacted Valve for more details on the recommended price increase and will update if I hear back.