From developers: effect of Steam Sale

I think we all saw quite a while of what Origin and GOG says something about how Steam deep discount devalue games and such (ignoring that Origin did a deep discount not 2 weeks after they said it)...anyway, This is what some developers respond...

Do you agree or disagree with any of either side's argument?

Wait, is this a trick question?

Devs say it's generally good, Steam showed raw numbers that displayed just how good it was.

Given that one of the few naysayers who have any influence at all turned around and became hypocritical moments later, and how games on Steam that had sales still have increased sales for weeks after the sale's over, there's no room for discussion.

^ It's not...just because some say it is doesn't mean that you will have to necessarily agree with it...especially with the argument by some people focus on the cheapening of intrinsic value of games (the race to the bottom problem) and not on just revenues generated...

I already went and pointed out how they've pretty much disproven the "race to the bottom", as noted in that very article. Remember, my post just now said:

From the article itself:

These developers have hard data on this that they aren't even obligated to reveal, I wouldn't go saying that this is false. In which case, why would we think this is resulting in a race to the bottom?

edited 25th Jul '12 8:29:12 PM by burnpsy

I was on a buying halt until the steam sale hit: Before, I simply couldn't afford to give more then a few dollars for any entertainment, but when the sale hit I was at least able to contribute those few dollars.

I guess it really depends on what the product is. For major AAA titles (and just about any title) that have only been released for just a few months or it gets to the point that it sells like hotcakes without the high discounts anyway (eg Skyrim, ARMA II through DayZ), I really couldn't see deep discounts making sense. For smaller indie titles and AAA games that have been out for a while and already marked down anyways, I can see it working.

edited 25th Jul '12 9:03:43 PM by EarlOfSandvich

Well a lot of the developers interviewed in that article happen to be Indies, so their development costs aren't as expensive compared to the games made by bigger companies like EA and Activision. Thus they don't need to make as much money to turn a profit, whereas a larger game would have to make millions just to break even. Perhaps that's what the EA rep meant when he said that?

edited 25th Jul '12 9:21:54 PM by SgtRicko

I don't see how this affects bigger titles more than indie titles. It's a simple multiplier. According to the article, when a game is 75% off it sells about 60 times more than usual. So even with the reduced prices, they're still making 15 times as much profit, no matter what the original cost or price was. There's very little overhead in digital distribution, since there are no discs or boxes to print, and no shipping costs, so there's no reason to value a few expensive purchases over many smaller purchases.

Now it's true that some of those sales were from people who might have bought it anyway at full price, but most of them are going to be from people who wouldn't have bought it in the first place.

edited 25th Jul '12 9:46:37 PM by Clarste

I think the reason EA and GOG are against it is because simply put, they feel they are losing business because Steam is undercutting them during sales, and that pisses them off.

EA are bastards, and offer games years later for high prices still. Plus Origin sucks, it's basically a Steam wannabe.

GOG's problem is that it's very niche, it's for older titles. Steam also dabbles on older titles, but because they have a tighter profit margin, GOG can't really afford to have sales at the same level as Steam, thus it's a problem for them too.

I don't see any problem with the Steam sales. Honestly, I've bought like 30+ games on Steam that I never would have impulse bought if I didn't see the low sales price. I also used to pirate all of my games that I didn't play multiplayer on, now, I haven't pirated a game in like two years, I pretty much exclusively buy games on Steam, with the occasional exception. The only reason I have Origin on my PC is because I play Battlefield 3, and apart from that have no use for Origin.

While I think in some cases there may be a point buried in there(from what it sounds like, developers have to talk with Steam about conducting a sale, so it's not like they can go "Hey we're just gonna give your shit away! HAHAHA!" Then I don't think we need to worry about sales coming too soon and screwing a developer. The general strategy seems to be releasing the game, riding the wave of new sales until it starts to dip, and then doing a slight sale to get more people interested. Then when that period is up, they rinse, wash, and repeat, lowering the sale more and more to snag every not-buyer they can. I honestly feel that everybody wins in this equation.

So in essence, EA just doesn't like the competition. The entire reason they made the Origin service seems to be that they didn't like Steam having a cut of their profits and wanted to have a monopoly on sales for the games they publish. If EA was a little less soul sucking and evil, then maybe I would have a bit more sympathy for them.

^ that's a good explanation...still wonder why CD Projekt still sell games on Steam though...

The most fun thing is about the Bastion sale...it's fun to see that the launch sales is not the best one anymore...I think that'll shake up on how projected sales will work in the future...

It doesn't matter that much if Steam sells games for less than retail price. The developers don't have to have discs and packaging manufactured and distribute the copies, so it makes sense that digital copies are cheaper.

GOG's stuff is already really cheap, so if they did a steam-type sale, they'd be selling quite a lot of their catalogue for less than a dollar. That said, they do put stuff on sale every weekend.

I was just going to observe that the reduced overhead costs associated with digital distribution ought to make Steam the preferred content platform for publishers at any price.

How much of the retail price of a boxed game do the publishers get, anyway? They sure as hell can't be seeing the entire $50 or $60 — most retail channels have a minimum markup of 100% and that doesn't even count the costs of manufacturing and packaging.

edited 26th Jul '12 8:29:49 AM by Fighteer

Yeah, going digital cuts out an extremely expensive middleman in the form of packaging and retail, plus it adds convenience for the consumer, as discs can be lost or damaged.

Which always kind of pisses me off that digital releases of new games are 60 dollars if there's no packaging involved. I miss the days of new titles being like 20-30 bucks back when I was a kid and bought Warcraft 2 for 20 bucks when it first released and I had saved up a ton of allowance.

EA has such a huge stable of big hits from studios that they have sucked in, and despite going digital they still sell that shit for 60 dollars.

Go G is owned by CD Projekt Red. As seen here:

http://en.wikipedia.org/wiki/GOG.com

Steam is an expensive middleman, too. I believe they take a 30% cut of everything sold. Probably not as bad as physical packaging, but still pretty hefty.

That's not too bad when you think about it. If you sell something for $50 on Steam, you keep $35 for yourself? What would you get for a box sold at Best Buy after overhead?

so does that mean that if an indie game is on steam but the price is too high, you can just go to their website and pay less?

edited 26th Jul '12 1:21:45 PM by Tarsen

That would royally piss off Steam and other retailers. Part of the "social contract" of the industry is that, sales aside, you pay the same price on the publisher's site that you would on the box in the store, regardless of the difference in profit margin.

Pull a "it's cheaper on our website" shenanigan and you can guarantee that retailers will never distribute another of your products.

edited 26th Jul '12 1:26:18 PM by Fighteer

^^if the indie is selling it for less on their site, but I'd assume there's some contract that forbids them from that

^^^I see figures like $2/disc for bulk manufacturing of the disc itself, and I can't really find anything about the boxes, but I'd guess around $5. Shipping I have no idea. I think Apple also takes a 30% cut for app store purchases, so maybe that's standard even for physical stores?

edited 26th Jul '12 1:25:52 PM by ch00beh

30% is the standard for online stores.

IIRC, retail gives the publishers back barely anything (I looked it up some time ago, I remember it was a really low number). Selling a game at a 75% discount on Steam would probably earn tons more.

edited 26th Jul '12 4:16:53 PM by burnpsy

An important fact about the sales is that while something like $15 may not be a lot of money going global can mean that due to exchange rate between local currency and dolar/euro/whatever can make that $15 sudenly become $60 or more depending where you live. So the sale and bundles (like the Humble Indie Bundle) also have a globalized appeal allowing for people screwed over by the exchange rates to buy games for reasonable prices rendering some excusses for pirating a game have less weight. I have to agree with Gabe Newell in that service can over run piracy, for example some games are pirated because the publishers decide No Export for You or no one wants to import games due to costs, having something like Steam and its sales make it easier to get a game and support the developers.

I gotta agree. I stopped pirating because of Steam, I'm too lazy to get most games anywhere else.

This brings up an interesting question:

If people in an EU country are willing to pay 10 Euros for a meal that Americans pay 10 USD for, would a developer be making an unfair loss if said EU people pay the Euro-converted price of a game that Americans pay 60 USD for rather than 60 Euros?

(Assuming the Euro is still stronger. I'm not sure what the exchanges are like now.)

edited 28th Jul '12 4:02:44 PM by Recon5

I would say it depends in how much the difference is, acording to an online converter I found it is 1 euro = 1.232 dolars so after using the exchange rates a $60 game would be €48.696 so it is not that much a price difference so maybe they are having an unfair lose. Then again the prices on Steam use $1=€1 and it is one of the common complaint about Steam pricing.