While speaking at the DICE summit, Valve's Gabe Newell revealed just how successful the weekend sales on Steam are, with games seeing anywhere from 3000 percent to 36,000 percent jumps in sales.<BR><BR><a href='http://meincmagazine.com/gaming/news/2009/02/left-4-dead-sees-3000-jump-in-sales-on-steam.ars'>Read the whole story</a>
Left 4 Dead sees 3000% jump in sales on Steam
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So...admittedly L4D has been out for a while, but sheesh, can we get over this $50/$60 price point for new games? It's software. I really can't believe, especially when using digital distribution, that $50 is the optimal price for a new game. Clearly, a good product is going to sell like gangbusters at a lower price. Am I just being a bitter anti-economist?<BR><BR>Long tail crowdsourcing blah blah blah...
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"While the prices on Steam are often higher than what you'd find at retail..."<BR><BR>I've never seen this to be true. All the steam games I've bought at launch were $50, same as their retail brethern. Only you don't pay tax or shipping, so it actually ended up being a bit cheaper...
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Khakionion:<BR>So...admittedly L4D has been out for a while, but sheesh, can we get over this $50/$60 price point for new games? It's software. I really can't believe, especially when using digital distribution, that $50 is the optimal price for a new game. Clearly, a good product is going to sell like gangbusters at a lower price. Am I just being a bitter anti-economist?<BR><BR>Long tail crowdsourcing blah blah blah... </div></BLOCKQUOTE><BR>Clearly some people will pay $50/$60 for a new game, so it makes sense to charge that at the outset. If you start at $30, you're leaving $20/$30 on the table for each person who would have purchased at the higher price. This is why it makes conceptual sense to start off at the highest price you can get anyone to pay, and proceed to drop the price over time until you've exhausted the market of all the people who will pay anything for your game.<BR><BR>In practical terms, of course, games (most especially MP-focused games) have giant discontinuities in perceived value based on their popularity due to the network effect, so it behooves the seller to set an initial price that is low enough to immediately encompass a market share large enough to be over the network effect threshold. And it also behooved the seller to hold off on dropping the price for some period, lest you decrease the number of people willing to pay the higher price up front (that is, if they know the price will drop in a week, some portion of those otherwise willing people will wait that week).<BR><BR>Whether the $50/$60 price point is the ideal starting point is, obviously, debatable. But there's no particular reason, based on these stats, to think that companies would necessarily be better off setting their initial price point lower. After all, Valve still got all the money from the people who bought during the sale, plus all the money they got from people who bought at the higher price.<BR><BR>And, really, it seems like the initial price point of $60 may - if anything - be suboptimally <I>low</I>. The increasingly popular "collector's edition" is a simple effort to identify the people who are willing to pay even more than $60 and get that extra margin up front.<BR><BR>Besides, if you compare the trend in list prices of new releases to the trend of inflation from, say, 1985 to now, game pricess have decreased in real terms.
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That undisclosed third party game was almost certainly "Mount & Blade". It's a lesser known game so it would have had low sales to begin with, and then they dropped it from $30 to $7.50 for a weekend. I think those are the perfect conditions to see that kind of sales increase.
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Khakionion, I completely agree with you. This should just go to show that $60 for a new game is too much. Sure, it makes the most money on each copy sold, but these figures just go to show how many more people would buy games at a lower price. I know I don't like to pay full price for new games at all. Something about not being able to even get 2 for $100. For me, drop new games $10, I'm sold, and I'd own a LOT more games.<BR><BR>What's interesting is that there are still old games that sell for $60. Take Ratchet and Clank Future:TOD, for instance. It's been out what, 1.5 years? Still sells for $60, and still sells well. I just find that fascinating. Then again, it was the only game I own that I paid full retail for...but I've always enjoyed the irreverency of the series.
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I thought steam prices were usually lower than retail, that's the reason I always buy from steam if I can. Plus they have amazing sales, HL for 99 cents!
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The Steam price is never, ever lower than the Amazon price for me unless there's a special sale. I'm usually willing to pay the $5-ish more for having the game in Steam, though.<BR><BR>I know four people who bought Left 4 Dead last weekend. I'm one of them.
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Yeah, from my experience the article is off-base in claiming that Steam is more expensive than retail. At least where I live (Alberta, Canada), Steam has always been the same as retail <I>at worst</I>. Usually it is cheaper, and of course there are the sales that never ever happen at brick-and-mortar stores. Bioshock for $5? Yes please! <BR><BR>I think the lack of sales is really hurting game sales, especially these days when there is so much competition for the consumer dollars. For example, DVDs usually come out at $25-30, but after a couple of months you can usually find them in a 2-for-30 sale or something. Games need similar price drops if they want to compete with used sales.
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I'm just wondering when they'll come to their senses and offer Steam for OS X? The Mac market-share may still be relatively small, but it's increasing slowly but steadily, and newer Macs are finally capable of playing modern game titles without a lot of issues. (Discreet video chipsets with decent performance are finally coming standard in Macbooks, for example.)<BR><BR>It's high time some developers realized the Mac is a "viable" market they're ignoring, especially if they leverage digital distribution like Steam.
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"I'm just wondering when they'll come to their senses and offer Steam for OS X?"<BR><BR>As soon as >90% of the Steam catalog is available for OS X? Just my guess.
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">For example, DVDs usually come out at $25-30, but after a couple of months you can usually find them in a 2-for-30 sale or something. Games need similar price drops if they want to compete with used sales. </div></BLOCKQUOTE> I think RoboToque is on to something. The model isn't directly applicable nor is as unsustainable as publishers would like you to believe.
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Steam matches retail prices, but does not match retail 'sales' of new titles. However, they have sales of their own which are pretty good... Like Bioshock for five bucks over the new years, what a steal that was!<BR><BR>Khakionion, it's all about demand. They can charge what people are willing to pay. Was L4D @ $50 too much? Yes. Did I pay full price? Absolutely! I wanted it right then and there, other games don't peak my interest until they get cheap.
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">For example, DVDs usually come out at $25-30, but after a couple of months you can usually find them in a 2-for-30 sale or something. Games need similar price drops if they want to compete with used sales. </div></BLOCKQUOTE> I think RoboToque is on to something. The model isn't directly applicable nor is as unsustainable as publishers would like you to believe. Start at $60, drop it to $40 or make publisher specific 2 for 1 on, say, Ubisoft titles of the same age. I'm sure there is a MBA out there that can make that math work for the industry.
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Are there any significant discounts anywhere for the 360 version of L4D?<BR><BR>I've been waiting for it to come down in price a bit, but the cheapest I've seen it is on Amazon for 58 bucks, which is only three dollars off full retail.
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I think $60 games are a steal, actually. I generally don't buy titles at full price unless I'm going to play the heck out of them (the games you can beat in a weekend I wait until they come down to half price). When I calculate dollars spent/entertainment hour, games usually beat handily DVDs, movies in the theater, and live theatre. About the only thing that is as efficient is my Netflix subscription. And of course my library card. -- View image here: http://episteme.meincmagazine.com/groupee_common/emoticons/icon_smile.gif --<br><br>Remember that when you index for inflation, games have gotten significantly cheaper compared to how much they cost in the 80s and 90s. That $50 Sega Genesis title I bought in 1989 would cost something like $90 today. <br><br>And it's not like it's a secret that prices are (eventually) going to drop. I think you pay a premium for the "latest, greatest," but if you're willing to be 6 months behind the curve you can usually pick up lots of great titles on sale for 25-50% off original retail. Sure L4D for Xbox 360 is still near original retail, but the game is still on the top 10 list for sales for that platform, and you wouldn't expect a drop until the title's sales start to slow. Steam maximizes the manipulation of price points to ensure that everyone can get the product (over time) at a price point they are willing to meet. Steam is also proof that the "long tail" retail model works for games as well as books and other media, as they can find markets for older and rarer titles you won't find in the store. <br><br>More power to 'em.
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ravenpen:<BR><BR>Check ebay...unless you're against buying used games, you can pick up a copy of L4D for the 360 at around $35-$40, shipping included. I bought 3 copies this way for Christmas...1 for me, and 1 for each of my brothers. Best presents ever.
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I think $50 is a fine starting point for a game. There is a difference between starting price and sale price (obviously). Any product in the world will sell more units at a lower price. Unfortunatly for businesses, it's not about selling the most units, it's about making the most profit (putting the "network effeect" aside for a moment). So the best strategy is exactly what Valve did with L4D. Started high, made big chunks on money, then put it on sale to reach the rest of the market later on that hadn't purchased yet. I am the type of person who won't buy a game until it at least reaches the $40 point, usually $30. But for doing that I expect that I won't be able to play the game until its been out for about a year.
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I almost bought L4D last weekend. Chose Fallout 3 instead. Still, I think I want L4D.<BR><BR>The 36,000% increase might have been Bioshock when it went on sale for $5.00. That's a price point you almost have to buy the game if you didn't already own it.
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">75 sale sale </div></BLOCKQUOTE><BR><BR>pizza pizza!
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">"While the prices on Steam are often higher than what you'd find at retail..." </div></BLOCKQUOTE><BR><BR>Especially true if you live in Europe! I found myself at the wrong end of the Atlantic after the controversial Euro price "conversion".<BR><BR>Now Steam prices aren't even close to retail. They're typically 20-30% higher! I'm sick of this regional pricing. We're not all millionaires here.
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Like others, I don't understand why there aren't more discounted sales in video games. I didn't purchase L4D from Steam, but got it from Amazon when they knocked their price to $20 or $25 (don't remember). If I hadn't done it with Amazon, I would have jumped on Steam's sale. <BR><BR>Steam's Christmas-time discounted prices were another sale I was all over. Admittedly, I spent more than I should have, but there were prices I could NOT pass up - Bioshock for $5 being just one example. <BR><BR>As has been posted, $50 isn't necessarily a bad starting point for games when they first come out. I have purchased some games at the $50 price point that I knew I wanted right that minute, while I've waited for the inevitable used, $20 price point on others. I'm sure $50 seems a bit high for folks that have to have every game the day they come out, but seems reasonable to those of us that pick-and-choose which titles we want the day of release.<BR><BR>It's no different than movies - if you have to see it the first couple of weeks it's out, then you pay theater prices. Else, you wait for rental prices ... or even VOD as part of a subscription.
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It's a sale model that makes perfect sense for digital products. Since the seller's cost per unit is essentially zero, they really want to give it to anyone for whatever they're willing to pay for it. However, if they price it super-low to begin with they lose out on the cash from people who would be willing to pay more, reducing their profit margins or at an extreme making it impossible to fund the production of the product in the first place. So, start high and then ramp the price down over time to get as wide an audience as possible.<BR><BR> Also, I'll ++ that Steam prices are generally about what I'd pay at retail at launch. When Steam first came out there were a few that were like $5-10 over retail at launch, presumably due to some sort of agreement to reduce competition with brick-and-mortar, but now they seem to be at parity. Maybe it's a comment more applicable to non-US residents?
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I'd imagine the 36,000% jump in sales was actually one of the older games on Steam during the holiday sale for $0.99 like Doom 2. Given that they were probably not selling many at all prior to the sale, given their retro-ness, and then the $0.99 price tag just made them impulse buys.
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I'm going to stop reading this thread because I keep seeing posts about games that I kinda going on sale for stupid low prices that I would have bought in a heartbeat if I saw the deal.
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So maybe a developer/publisher <B>can</B> compete with piracy and used games?<BR><BR>So maybe $60 isn't the optimal price for all games or at least after a time?
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Allow me to add my <B>Bioshock for FIVE DOLLARS</B> comment. I doubt it's the game that saw the 36000% jump he was referring to but when I saw that price, and the Game of the Year tag next to it, I bought it in a blink.<BR><BR>As for games holding their value, I'm still holding out for a Wii Boomblox sale in the $20 - $30 range. It's down to $38 on Amazon so it's close.
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I don't know about everyone else but at the local EB or FutureShop or what have you getting a PC game is a real pain unless it's a big title. Pretty much have to preorder anything that isn't Sims or WoW. This is where Steam steps in for me, I have bought all of one game in the last 2 years that wasn't on Steam, just how it is for me now.
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Allow me to add my Bioshock for FIVE DOLLARS comment. I doubt it's the game that saw the 36000% jump he was referring to but when I saw that price, and the Game of the Year tag next to it, I bought it in a blink. </div></BLOCKQUOTE><BR><BR>I'd buy Bioshock for the 360 for $5 bucks.
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<B>BIOSHOCK FOR FIVE DOLLARS</B><BR><BR>The Holiday sale was god damn nuts. I bought the Rockstar Pack that weekend it was $70. I bought the Ghost Recon pack when it was $20. I refuse to buy a game if it isn't on Steam.<BR><BR>Steam is the greatest form of DRM to exist because there is nothing but upside to using it.
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The only problem I have with any digital distribution is that I can't transfer my license to someone else (most of the time...) once I'm done with the game, I'd like for my PC games to be trade-inable just like my console games, or at least I'd like the ability to sell 'em when I'm done. Last time I checked Steam wouldn't let you do this (with the exception of the orange box thing they did...)
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<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content"><BR>Daveosis<BR><BR>The only problem I have with any digital distribution is that I can't transfer my license to someone else (most of the time...) once I'm done with the game, I'd like for my PC games to be trade-inable just like my console games, or at least I'd like the ability to sell 'em when I'm done. Last time I checked Steam wouldn't let you do this (with the exception of the orange box thing they did...) </div></BLOCKQUOTE><BR><BR>Amen to that. I bought a physical copy of Fallout 3, played it, hated it, then resold it on eBay at a $13 loss (roughly the cost of a console rental). I almost bought it on Steam and then would have been stuck with $50 worth of non-transferrable bits.
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++ when marginal cost is negligable you price your worthless trash to maximize revenue, and when it's something like dynasty warriors 33, or extreme cribbage tour '09 just count yourself lucky if people 'll take it for free.
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Anyone else wondering why valve didn't care to mention how many copies were actually sold? I know a lot of people here like steam but this really smells like marketing schmooze. My guess is that the market for pc games like left4dead has been shrinking over the past few years which is why valve is tight-lipped about actual sales data, especially since it is in their own financial interest to make the market appear healthy.
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