UK game retailers facing pricing challenge due to VAT increase

Last week, the UK Emergency Budget resulted in a proposed increase in the country's VAT (similar to a sales tax). When it goes into effect in January, the tax will increase by 2.5 percentage points. Game retailers are mulling over the possibility of absorbing the added the cost, instead of passing it to the consumer.

According to MCV's report, "senior retail figures" are reluctant to increase the price of games above the now-standard £39.99 ceiling. Afraid that the increased VAT will lower sales, retailers must consider lowering their profit margins, by paying for the increased tax. Should that prove to be unsavory though, UK gamers can expect their games -- as the price of many other retail goods -- to increase in the new year.

This article was originally published on Joystiq.