It's no secret that software, music and video prices vary around the world. A recent report by the Social Science Research Council with a focus on Brazil, India, Russia, South Africa, Mexico and Bolivia, claims that the inflated prices for media goods, low incomes, and cheap digital technologies are the main ingredients of global media piracy.
Here's an example of the price of Call of Duty: Black Ops (Xbox 360) in the USA, UK, Australia and Brazil in US dollars, and compare that to each country's GDP per capita:
USA (tax excluded)
$54-$60 / $46,000 (0.12%-0.13%)
$52-$60 / $36,400 (0.14%-1.7%)
$80-$115 / $53,300 (0.15%-2.2%)
$96 / $8,950 (1.07%)
The report raises a good point. If you lived in Brazil, would you pay that much for Call of Duty: Black Ops? According to the report, relative to local incomes in Brazil, Russia, or South Africa, the retail price of a CD, DVD, or copy of MS Office is five to ten times higher than in the US or Europe.
The likely reason for all of this is that companies simply price everything at a global level, and then add costs associated with trading in a country to the prices or that country. But as software doesn't actually "cost" anything to produce (after initial investment), surely it would make more sense to set prices based on what people can afford to pay in that country, rather than what people in wealthier nations can afford to pay. There're obviously gray import issues with that scenario, but that's one of the reasons that DRM exists.
Consequently, squeezed out of buying media the legal way, consumers have found themselves drawn to the, erm, grayer end of the market to sate their entertainment needs. There's plenty more to this report, including a proposed solution to fixing these broken economics, but you'll have to check out the links below for the full scoop.
The report also states that piracy rings are no longer making money. It argues that "criminals can't compete with free" -- an obvious reference to the effect the Internet has had on piracy.