Gaming Steam Sales and Devaluation

As I see it, it is more convenient to buy older games (>1 year) in a digital online sale than in a store second hand.

Second hand / borrowing of friends / piracy = zero revenue to game developer, cheap in sale = some revenue, that has to be a bonus

 

Regarding Dear Esther:

Yup, I'm one of them. Bought it during the Summer 'Seal'.
I found it hard to reason myself out of the 8EUR (10.50USD or 6.80GPB), for a game with almost zero replayability and only about 2 hours of gameplay, that went into profit 6 hours after release (14th Feb '12).

It's all about my(and your) time and money.
If the publishers get all MBA up in our faces, who the hell are they to complain when a chunk of their customers have the audacity to re-evaluate their time and spending?
Heck we all have better things to do and not go for the 4th or 5th installment of a shooter without significant improvements.

On a sidenote: I'm eagerly awaiting HL(EP?)3 and will pre-order if announced.
Same goes for anything Homeworld related, great IP/storyline/scores, but thats just wishful thinking on my part, nothing new from Relic after that 2011 interview...

Manly tears were shed.

"No one's left. Everything's gone. Kharak is burning."

 

I spent over $250 on the Steam Summer sale and picked up a bunch of really good games. Personally I would NEVER EVER have bought most the games I got at full retail price. Like someone stated in the comments already I would only pay what I think the game is actually worth. Most to all games produced are not worth $60, all new games should be $40 or less.

 

If I really want or am hyped for a game I will pay full price for it on release.

I bought Deus Ex 2, Max Payne 3, Mass Effect 3 and Skyrim at full price. I will buy Command and Conquer Generals 2 for full price (I will pre order).

I also have bought many games in the Steam sales that I would never have bought at full price. In the last Steam sale I bought Fable 3, which is a game I would never buy at full price in a million years.

This seems to be the general consensus here...

As others have said, Steam also does great work in expanding the PC games industry, lowering piracy and supporting indie titles.

Remember a couple of years ago there was talk of PC gaming dying because of no sales compared to consoles? This was because analysts did not look at sales through digital distribution at this time. PC ports either did not happen (Red Dead Redemption) or were crap (GTA4).

Now we are seeing really good ports with PC graphics options and support.

Look at the difference in the port quality of Max Payne 3 compared to GTA4.

GTA4 was a crime against nature. Max Payne 3 has high resolution textures, tessellation, high grade anti aliasing options and advanced lighting effects. This could be down to PC gaming now being more visible and profitable which is pretty much down to Steam.

 

Who decides the prices during Steam sales? Does Steam set it or do publishers set it? I get the feeling it's the latter. The reason I ask is because if publishers have full control over it, they're following simple supply and demand economics.

Anyways, for me personally, I find I'm much more conservative with my discretionary spending than I was ten years ago. Ten years ago, I was buying games, DVDs, music, and computer hardware all the time. Now, I spend a lot more time evaluating whether or not I need a purchase. As an individual, this has had nothing to do with Steam sales (the behavior started before I even got heavily invested in Steam sales), and more to do with simply maturing as a consumer.

That being said, I don't think Steam sales undervalue games. It's given publishers the ability to price in a manner that can capture people who have lower price points for entry, including those who buy used or pirate (I'm not trying to address those issues here). The proceeds of the purchase (at least in part) go to the publishers, which are the companies that are taking all the risk in producing a game.

As mentioned in other posts, Steam's digital versions are not quite the same as a hard copy. Just 10 minutes ago when I turned on my PC, I had to agree to a new Steam agreement. The agreement was very clear that the licenses we purchase do not confer ownership. I'm pretty sure that was true before, but in any event, the product we purchase on steam does not allow for the same uses as a tangible copy.

To be honest, I think the reason we're seeing publishers complain more about piracy, used games, and steam discounts, EA in particular, has to do with the traditional model of video games becoming increasingly difficult for larger publishers. Games have relatively short sales lifespans over which costs can recaptured and require increasingly large development costs. The one-time $50-$60 model may simply not provide enough of a return on investment to larger corporations after all the risks are accounted for.

 

It's not just digital sales, all games get much cheaper after release. I mostly game on xbox and being very money aware I don't really play up to the minute releases I play things a couple of months old that I pick up from play or amazon etc for £15-£20 or sometimes less.

I spend money in the steam sales and very rarely buy anything at "full price" and what I do is cheaper stuff anyway. Most of the stuff I've bought in the sales I'll probably never get round to playing but it's either stuff I've played before and don't own a copy of or something I'd like to play should I ever get the chance and buy it on a whim for a couple of quid.

I think the trend is for lower price shorter games with the advent of DLC and season passes for games the publishers will find a sweet spot where the base game doesn't cost a lot (or can be heavily discounted to get people through the door) and then the additional content (maps levels etc) will be to you bit by bit so you'll end up paying much closer to the £50+ of top retail games just spread out of months or a year.

 

I have to say that i actually stay away from the steam sales now. Not because of any objection to them devaluing games or such like, but because i actually waste my money as a direct result of these sales; "Ooh, that game is only £3!?! I'll have that!" *then doesn't even bother to download it*

I have a library of over 100 games, only 15 of which i have bothered to download, and of that 15, i play maybe 4 regularly. I will probably never play most of them.

 

In the steam sales though I buy games I might not ever play or might play only for an hour to get the flavour. Games I would never have bought otherwise. So that's a big boost to sales for more niche or innovative games.

 

The people who only buy games in the sales, are these not (at least some of) the same people who whould never have bought it anyway and possibly just gone on to pirate it??

Isn't "I'll buy that for £5" much better for everyone than "I'll steal it for free!"

 

My thoughts echo many of those already voiced here.

1.

It is hard to feel pity and understand why companies feel hard done by when an physical copy of a game is x amount and then the digital copy is the same.

Digital only copies remove the price of materials, manufacturing and logistics from the cost line.
Also steam does need a large warehouse or shop to store these physical copies in many locations so again this should reduce costs (although I understand that server maintenance costs are added but on the whole I think maintaining a large server is cheaper than maintaining 100 nationwide stores and the staff required to man them.)

2.

Some games are far too expensive £50, £60 and I have even seen £70 for a generic title like MW3!!! I use this as an example as it is quite obvious that no real effort has been put into it. They have taken an old game, old engine and tweaked it. Hardly a' 'from scratch build'.

So I feel more than a bit annoyed at these companies saying consumers are devaluing their games when in reality it is they, through their lack of innovation, imagination and effort who are devaluing their product.

A lot of companies motivation (EA cough cough) is how much can we charge and how little can we spend on development. Now many will say that this is capitalism and I would agree, but it is short term capitalism. Make a quick profit now whilst sacrificing the longevity of the genre.

It is that culture that has also normalized the devaluation of games more than discounts.

3.

I have a family and my own business to run. I cannot afford £30 -50 for a game (wife would go mental too) So I am definitely in the category of people who wouldn't buy games at their normal price.

Maybe I can understand companies being annoyed if a new AAA title was reduced massively 1 month after release but this never happens. After about a year I think 90% of those who would buy the game at full price have done so. Therfore the choice for the company is less money for a no cost to them download or no money at all.

4.

I think that companies should be careful not to bite the hand that feeds them. Without a company like steam I think they would see their bottom line collapse, mostly due to reasons outlined above. Due to companies like steam I don't think that PC gaming has ever been so popular or viable for game production.

 

Looks like I'm with the majority here. I don't see these sales as devaluing the games simply because I already feel them overpriced. Before steam (and years into its life) I was paying £18 for almost every new game I wanted on day of release from Play or Amazon. I choked when I seen new releases on steam for £30, so I continued (when it was cheaper) buying retail, even if only to get the code to link it with my steam account.

The steam sales solved that problem, although Origin has brought it back as I bought both BF3 and Mass Effect 3 retail. The first time I've done that since 2009 or so, well done EA. I don't even have a disk drive anymore so again I just used the codes to download over Origin.

While saying this I am waiting for Orcs must die 2 and Max Payne 3 to go on sale before buying them so in a way they are holding me back from buying games I would otherwise have bought. Well, bad example as one is a third the price of the other. I didn't buy Max Payne 3 during this sale as I have plenty to play until it goes on sale again at Christmas.

 

This is why I love you guys.

I loved how, at the pub quiz, people were able to guess which articles were by me with 100 per cent accuracy in the Quotes round.

 

I have a fairly regular & consistent budget for my game purchases. Reduced pricing might mean I get more games for the amount I spend, but I still spend the same amount. Sales just mean that my money is more evenly distributed between games, 3 games might get £10 from me instead on one getting £30 & the other two getting nothing. But the industry as a whole still makes the same amount of money.

 

If the game sells more than the percentage discount (e.g 50% off, 100% increase in sales) then the profit has gone up. Revenue has increased, sales have increased, and your potential future customer base is larger. Only when dropping the price does not cause sufficient increase in sales volume can a product be thought of as devalued. Up until then, the price is just settling towards an acceptable value from an overpriced one.

If people are willing to wait for several months/a year to buy your product on sale, rather than pay launch price, then sales arent devaluing your product; your product is overvalued!

 

I do not know why much conversation about the steam sales, stores as Amazon also have these sales time, and no one talks about it????

I think that Big publishers such as EA are not comfortable with the Valve's power in the market, so they use lame excuses such as creativity to justify their non-logical arguments against Valve.

The fact is that games are expensive for their quality and longevity, and Steam turns around this tendency. Publishers such as EA want massive profits (that not always reach the producers and the programmers) , and the Steam model is clear a threat to that.

 

For example I love Max Payne and Half Live but I never brought them at full price. Although they are high quality products, I simply do not agree and afford the full price.

 

It's subjective I know but, how can you say the Half Life games didn't warrant their price tags?

The episodic releases were sold at lower prices anyway, but HL2 was groundbreaking!

 

Yes it is completely subjective you are correct, and also some people can pay the full price and others don't, so it is also subjective.
What it is important to look are the profits and how they are distributed between the contributors, my question is who receives the real money when reports show that video games are an industry that moves millions.

Additionally it is also important to look at the percentage of people that pay the full price and the people that pay the sales price and see if one if at least 4 times the other. If so it is proven that sales create more revenue and producers benefit more from these sales.

 

Ok, you lost me.

What has ANY of that got to do with the valuation of the Half Life series?

 

I'd be happy to never have a steam sale if the prices were in line with what I can buy a regular dvd copy for off an etailer. I've been buying games new on ebay, usually fairly priced without the crazy postage charges that you get on Amazon. The fact is steam keeps the prices higher than the rest of the market most of the year and then bring the prices lower than the rest of the market during the sales.

The steam sales are not just about discounts but there is a psychological element to them as well. Those of us with little self control (me) can get caught up in a buying frenzy. Buying things left right and center. For me Dear Esther is a good example. I read great reviews, but given the type of content it was, I wasn't sure whether it was something I would enjoy. I don't think I would have bought that game if it had the same discount on it's own. But since I was buying other games during the sale combined with the heavy discount I said I might as well throw it in the basket. After all whats a few more euros? (man do all those "few more euros" add up) The fervor that the steam sale generates results in much higher volume sales than would occur from simply discounting the game.

I would theorize that business model for steam is to keep is to keep prices artificially high during the year giving a sort of steady baseline income. This baseline income would not be as high as if they kept their prices in line with e-tailers selling physical copies. Then generate mass hysteria and panic buying in it's customers during the sales. During which they sell massive volume at a lower price. The daily deals, 8 hourly deals and community voted deals are all manipulative tactics to generate the panic buying (if I don't buy now I might not get it as cheap again!). It is during the sales then that steam will make its largest amount of income for the year. It might even be at the stage where the regular day to day trade covers the cost and the summer and Christmas sales generates the profit.

The other thing about keeping the prices artificially higher during the year is that your discounts are then artificially larger during the sale. If I look on steam today there is a game called "Transformers war for cybertron". Steam is selling this game for €5 down from €19.99 saying that it's a 75% discount. I can buy the game for €16.41 new on ebay with shipping included. So in reality the discount is 70% on what I can get it elsewhere. It's still a good discount but an example of how they are making you think you are getting a better rate than you actually are. Again maximizing your perception of amount of discount you are getting is another tactic to induce the panicked frenzy buying during the steam sales.

The other big seller for steam would be selling on release day for big AAA titles. They don't even have to work for those downloads. The games marketing department takes care of that for steam more or less. All steam has to do is let the customers know its coming.

Marketing is all about clever psychological manipulation and I think steam have really done it well.

As to whether all this devalues intellectual property or not well it basically boils down to whether to sell few at a higher price versus sell loads at a lower price (stock em high and sell em cheap) Sort of like Harrods versus Lidl. I think that games aren't boutique products. Its all about selling units, as many units as possible. You do whatever you need to do to get those units out the door. When this is what the industry needs to do to make profits I don't think that you can "cry cheapening of Intellectual Property" when Steam Sales does what is essentially volume sale discounts (We will sell loads so we can lower the price). The other approach steam could take is to lower the price of games to more like amazon prices throughout the year and have no sale or at least a tamer sale. Meaning few over all units sold at a higher price. I think they would have switched to this model if it was more profitable for them.


What steam does works. It works for steam and it works for the developers. The customers get good value with the real problem being that they are being coerced into buying more units than they would normally. That can't be bad for developers either. Also it's a free market I'm sure there are other digital distribution methods developers can use if they disagree with Steams practices.

Really I think EAs comments aren't really worth taking seriously. All he was doing was trying to put down a competitor by spouting disparaging remarks. Its not the first time a company representative has done such a thing and it won't be the last.

Bloody hell that was a long one!