The actual Effect of Steam Sales - or putting that one EA argument to rest

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http://www.gamasutra.com/view/news/174587/Steam_sales_How_deep_discounts_really_affect_your_games.php

Valve's Steam sales have always proven a great time for consumers to score some cheap PC games, but over the past several months, there's been some debate over whether these promotions are good for game developers. Some have argued that the major discounts devalue games, and end up hurting the industry in the long run.

But according to a number of developers that took part in this year's Steam Summer Sale, that doesn't seem to be the case. The teams who've discounted their games during this or previous Steam sales have found that the promotions not only attract more sales, but also generate more revenue and breathe new life into aging products.

Runic Games CEO Max Schaefer, for instance, tells us that while it's been almost three years since his studio launched Torchlight, Valve's Steam promotions have helped the game maintain healthy sales to this very day.

"We find that we get several thousand percent increases in units and revenue on the days of the Steam sales, and unit sales are usually about double the normal for a few weeks after the sales are over," he says.

This year's Summer Sale (which ended July 22) was particularly noteworthy for Runic, as it helped Torchlight hit its second biggest day ever in terms of overall unit sales -- not bad for a game that came out in October 2009.

And Runic's case doesn't seem to be an anomaly; Supergiant Games' Amir Rao tells us that these Steam sales have proven more lucrative than his game's initial debut.

"A lot of times we judge the success of a game -- and predict its sales -- by looking at its launch day numbers. Steam sales have made that delightfully impossible. Our launch day [for Bastion], which we viewed as very strong, is only our fifth best day of sales ever on Steam due to the power of the promotions we've had the opportunity to participate in," Rao says.

According to indie developer and Super Meat Boy co-creator Edmund McMillen, these promotions can increase sales to an almost staggering extent. His 2D dungeon crawler The Binding of Isaac, for example, saw sales multiply by five when it was marked down by 50 percent, and once it hit the front page as a temporary "Flash Deal" (for 75 percent off), sales multiplied by sixty.

Believe it or not, those figures aren't all that unusual. Valve's director of business development, Jason Holtman, says plenty of developers have seen their sales increase exponentially, giving them a very healthy boost in revenue.

"It's not uncommon for our partners to see [a] 10-20 times revenue increase on games they run as a 'Daily Deal.' Some titles really take off and see as much [as a] 70-80 times increase in revenue," Holtman said.
Is there a catch?
Despite the fact that Steam sales mark games down to just a small fraction of their usual price, the developers we spoke to don't think these promotions are devaluing games at all. Based on the data they've seen, Steam sales have only been a good thing for their business.

Sure, players will jump on the chance to buy a game for $2.50, but the developers have found that Steam consumers are still perfectly willing to pay full price for a game once the sales are over. The "race to the bottom" we've seen on the mobile markets just doesn't seem to be there on Valve's platform.

"While some may argue that [major sales] contribute to an industry-wide price deterioration problem -- where smartphone games have made people unwilling to spend more than $5 on a digital game -- [Steam sales] are a bit different," says Ken Berry, the executive VP of XSEED Games (Ys Origins, Ys: The Oath in Felghana).

"Rather than looking at it as a 'lost sale' when people wait for these Steam discounts, I think it needs to be viewed as reaching out to a new customer that never would have purchased your game otherwise."

Valve's Holtman says he's never noticed any negative consequences from these promotions. Instead, most games still see positive trends in their sales numbers well after the discounts are over. At the very worst, a game's sales will just revert back to what they were before the promotion began.

And of course, it's not only about generating more sales. Sometimes, you just want to make sure that people are playing your game in the first place, so they pay attention when you're building excitement for whatever comes next.

As Toxic Games' Daniel Da Rocha (Q.U.B.E.), puts it, "[When people] have the opportunity pick up a copy for next to nothing, this only grows the fan base around the game, so when we release new content or future games, we have a large community already there to market to."

For those still looking to reap the benefits of these sales, you're in luck, as Holtman says "there's no secret handshake a developer needs to know to get their title on the front page [during a sale]" -- all you really need to do is put out a product that consumers want to play.

So there you have it, the numbers are quite in line with what Valve reported back in the day with Left4Dead: http://www.shacknews.com/article/57308/valve-left-4-dead-half

Valve co-founder Gabe Newell announced during a DICE keynote today that last weekend's half-price sale of Left 4 Dead resulted in a 3000% increase in sales of the game, posting overall sales that beat the title's original launch performance.

Newell also mentioned that new Steam customers jumped 1600% over the same weekend, according to G4TV. Retail sales remained constant.

Sales of Team Fortress 2 went up 106% following a free update to the game. Retail wasn't left out in this case, with sales jumping 28%.

The massive Steam holiday sale was also a big win for Valve and its partners. The following holiday sales data was released, showing the sales breakdown organized by price reduction:

- 10% sale = 35% increase in sales (real dollars, not units shipped)
- 25% sale = 245% increase in sales
- 50% sale = 320% increase in sales
- 75% sale = 1470% increase in sales

Let's not forget how Valve/Steam is even said to have saved several Indie developers with their sales:
http://www.examiner.com/article/how-a-steam-sale-saved-a-game-company
http://www.escapistmagazine.com/articles/view/features/9011-The-Terrifying-Tale-of-Amnesia
http://www.neoseeker.com/news/12017-tripwire-steam-does-not-exploit-indie-developers/

So now we can put that one to rest... it apparently also works in other Digital Distribution industries by the way, and would also likely work with movies and music, the powers that be just have to wise up and recognize it instead of clinging to their old business models of charging as much as they can and artificially keeping the prices up for as long as they can.
http://www.techdirt.com/blog/casestudies/articles/20120504/06511518781/paulo-coelho-ebook-sales-jump-way-up-thanks-to-099-sale.shtml

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Dexter I'm starting to find your threads as good/better for news than the escapist, you are always pretty fast with posting them.

Keep up the good work. *awaits ban*

I'm pretty sure the this is the 3rd party version of what Valve experienced. I remember an article a while back about Valve saying that even though they cut their games to around 5 they still made more profit than normally due to the sheer volume of sales.

Yeah, you don't really have to look much further than Frictional Games with amnesia, I don't remember the exact source but the dev's admitted at one point that steam sales of Amnesia saved their business.

EA probably knows about this information and are kicking themselves because if they tried something like this again after what they said they would seriously be fucking over their image. As shitty as it already is.

I still cant believe that anyone took that argument form EA serious.

A hastely put together excuse for why they wern't making sales. Had no bearing on reality.

Dexter you may just be my favorite thing on this entire site. Please don't ever stop doing what you do here.

Matthew94:
Dexter I'm starting to find your threads as good/better for news than the escapist, you are always pretty fast with posting them.

Keep up the good work. *awaits ban*

I'm pretty sure the this is the 3rd party version of what Valve experienced. I remember an article a while back about Valve saying that even though they cut their games to around 5 they still made more profit than normally due to the sheer volume of sales.

I am pretty sure You are joking about the awaiting ban thing but I am going to say this anyway. This is the escapist not the EA forums they won't ban you for saying 1 small thing against them.

I'm still curious if we can ever get any data as to how these sales effect "new" games. Like Max Payne 3 or Spec Ops the Line, both were out for a relatively short time and I'm curious if there was any significant number of people who saw the release dates and just thought "screw it, I'll just wait the week or so to get it at a discount." I know I did, and hell Spec Ops the Line was 50% off on amazon 5 days after it's launch.

The_Lost_King:

Matthew94:
Dexter I'm starting to find your threads as good/better for news than the escapist, you are always pretty fast with posting them.

Keep up the good work. *awaits ban*

I'm pretty sure the this is the 3rd party version of what Valve experienced. I remember an article a while back about Valve saying that even though they cut their games to around 5 they still made more profit than normally due to the sheer volume of sales.

I am pretty sure You are joking about the awaiting ban thing but I am going to say this anyway. This is the escapist not the EA forums they won't ban you for saying 1 small thing against them.

I joked that I didn't like escapists and got a warning. When I tried to explain it was a joke they said to stop trampling on their work and that they'll remove my posts and ask me to leave if I continued.

The thread was "name groups you didn't like"

I said "escapists...." then went on to be serious and say it was actually those "concerned Christian mothers" groups I disliked. The guy wouldn't listen to me and the warning stayed.

EDIT The majority of staff here are very reasonable people but just be careful when you post in case something like what happened to me happens again.

That's it. I think I have compiled enough data to determine that Dexter is a viral marketer for Valve. I'D STAKE MY LIFE ON IT!

:P

EDIT: And in the event that I am wrong then you should ask for the job.

Wait.. people listen to EA's bullshit?

Another good read Dex

I wonder how long it's going to be before Valve's brand of capitalism catches on to other medias. It's not like it hasn't been proven to work at this point.

Thats all well and good but I really dislike it when companies talk about stuff like this and leave out all the information that is actually important. You know the things that matter like say profit. That entire article amounts to derp derp people but stuff when its on sale.

Rednog:
I'm still curious if we can ever get any data as to how these sales effect "new" games. Like Max Payne 3 or Spec Ops the Line, both were out for a relatively short time and I'm curious if there was any significant number of people who saw the release dates and just thought "screw it, I'll just wait the week or so to get it at a discount." I know I did, and hell Spec Ops the Line was 50% off on amazon 5 days after it's launch.

That is actually a really good point.

Do publishers have have to plan around the steam sale in order to make sure that potential customers for their title isn't doing this?

It is easy to have a 2000% increase in sale if the titles are not new releases and out of the spotlight. We all know there is a major drop off in sales over just the first month, so if the steam sale takes to momentum of a new release then that could mean massive profit lost.

Now that is an interesting read.

Yeah it should be pretty obvious. When the price of a new game is $60, there are only so many games a gamer can purchase. Probably averages out to about once a month. Now if you're game is a recognizable franchise at the top of everyone's list and will sells millions in the first few weeks, it's understandable that you'd be nervous about things like Steam sales.

But this model works pretty poorly for the rest of the industry as a whole. Steams sales are great because it gets us gamers to open our wallets and spend, more than we normally would because everything's just so damn cheap (pretty much everyone on Steam has a long list of games they bought but have yet to play), and it does a great job of spreading the money around to everyone in the industry, and not just the top publishers.

So there is some truth in EA's statements, they're just being disingenuous about it. Steam sales aren't necessarily the best thing for EA, because they have a number of titles like Madden, Battlefield, or whatever Bioware puts out, that do sell millions at $60 a pop. It's standard big corporate culture, they care about their profit margin first and foremost. Big digital sales are great for the industry overall and especially great for the consumer, but if it hurts EA's profits they're going to fight against it.

darkstone:
Yeah, you don't really have to look much further than Frictional Games with amnesia, I don't remember the exact source but the dev's admitted at one point that steam sales of Amnesia saved their business.

And don't forget the Humble Bundle. I got Amnesia in Humble Bundle V, and if I remember correctly the total sales for that bundle was over $5 million. After splitting that up between the 8 games which were sold in that bundle, that's a good $625,000 they wouldn't have had before. Taking into account the average sale for that Humble Bundle was about $8, meaning on average every person $1 per game, that is a pretty good chunk of change for such a low asking price (especially since the real asking price is $0.01)

EA is just being petulant and stubborn. They simply can't admit that Origin's failure to impress as much as Steam is all their fault. Honestly, I can't think of many other companies who literally say to their customers on a regular basis, "No you can't have what you want, and no there isn't anything we're doing wrong, because you think you're right, but actually we are."

...Well, at least companies that lasted much longer after saying those things.

Suki_:
Thats all well and good but I really dislike it when companies talk about stuff like this and leave out all the information that is actually important. You know the things that matter like say profit. That entire article amounts to derp derp people but stuff when its on sale.

Eh what? But that is the point, the increased sales lead to more profit. We've known this for ages in regards to Steam. If you sell x copies for 20 normally, then when a sale comes along selling the game for 5 and %1000 more sales come along, you make a fuck ton of profit. Not only that, this is digital distribution, so you make money on /every/ sale, given you don't have to pay for shipping or creation of the physical media.

Frictional games were saved from bankruptcy by the steam sales, and a lot of other developers make fat wads of cash and get massive exposure from steam sales. If they didn't make a profit, companies wouldn't do it. Not only do they make a short term boost in sales/profit from Steam, but people are more likely to buy more games afterwards. Case in point for me; Magicka, shown by steam, bought on a sale, and now I'm fully looking forward to their new game, A game of Dwarves, had steam not shown me it, I might never have learned about them, and I fully intend to pre order A game of Dwarves, because I want to support their company.

It's pretty obvious to anyone with even an ounce of knowledge of sales.

People make more with lots of cheaper products than they do with few expensive ones.

Not only do you reel in the rather large portion of the consumer base that is probably on the fence for an expensive product, but you also catch the impulse buyers off guard. People will pay 2 even if they don't particularity want the product just because of how cheap it is. In a DD model that's pretty much pure profit. And if you have about 20 people buying it for every one that would have bought it at full price, it adds up on a 15 game.

Matthew94:
Dexter I'm starting to find your threads as good/better for news than the escapist, you are always pretty fast with posting them.

Keep up the good work. *awaits ban*

I'm pretty sure the this is the 3rd party version of what Valve experienced. I remember an article a while back about Valve saying that even though they cut their games to around 5 they still made more profit than normally due to the sheer volume of sales.

I think a common mistake that could be made is since the industry has gotten so used to sales tapering off to almost nothing after 3-4 months, they can't imagine there are people just waiting for the right price point. And even then, they imagine that even in a best case scenario consumer shares are a linear rectangle, with -50% off having maybe as many as those who would pay half price. In reality, it's an iceberg, with those paying full price being the visible part.

Abandon4093:
It's pretty obvious to anyone with even an ounce of knowledge of sales.

People make more with lots of cheaper products than they do with few expensive ones.

Not only do you reel in the rather large portion of the consumer base that is probably on the fence for an expensive product, but you also catch the impulse buyers off guard. People will pay 2 even if they don't particularity want the product just because of how cheap it is. In a DD model that's pretty much pure profit. And if you have about 20 people buying it for every one that would have bought it at full price, it adds up on a 15 game.

That actually brings me to another thought.

I have been thinking the same thing you are more going here for quite a while now. That companies could lower risks and increase profits by making more smaller projects rather than singular big ones.

What I am thinking thou is "the games might be selling more during the sales because they are normally more expensive". I know that is a Hurr Derr sentence, but think about it in this way. If the idea of a AAA game being established at a 60$ price point the sales become more effective because you can see how much money you are saving. If you were to lower the price on games overall you wouldn't have the same drive of "money saved" the sales give.

elvor0:

Suki_:
Thats all well and good but I really dislike it when companies talk about stuff like this and leave out all the information that is actually important. You know the things that matter like say profit. That entire article amounts to derp derp people but stuff when its on sale.

Eh what? But that is the point, the increased sales lead to more profit. We've known this for ages in regards to Steam. If you sell x copies for 20 normally, then when a sale comes along selling the game for 5 and %1000 more sales come along, you make a fuck ton of profit. Not only that, this is digital distribution, so you make money on /every/ sale, given you don't have to pay for shipping or creation of the physical media.

Yes you dont have to pay shipping but there are still costs. Steam will still take a cut off of every single sale you make. You also have to take into consideration the effects that it will have on sales in the coming months.

Draech:

Abandon4093:
It's pretty obvious to anyone with even an ounce of knowledge of sales.

People make more with lots of cheaper products than they do with few expensive ones.

Not only do you reel in the rather large portion of the consumer base that is probably on the fence for an expensive product, but you also catch the impulse buyers off guard. People will pay 2 even if they don't particularity want the product just because of how cheap it is. In a DD model that's pretty much pure profit. And if you have about 20 people buying it for every one that would have bought it at full price, it adds up on a 15 game.

That actually brings me to another thought.

I have been thinking the same thing you are more going here for quite a while now. That companies could lower risks and increase profits by making more smaller projects rather than singular big ones.

What I am thinking thou is "the games might be selling more during the sales because they are normally more expensive". I know that is a Hurr Derr sentence, but think about it in this way. If the idea of a AAA game being established at a 60$ price point the sales become more effective because you can see how much money you are saving. If you were to lower the price on games overall you wouldn't have the same drive of "money saved" the sales give.

I think that's the general idea with mobile gaming. I know a lot of companies have looked at that because it has the benefit of being cheap and attracting the fence sitters and impulse buyers but also has the added benefit of being cheap to make. Also a much larger potential consumer base to begin with.

Most everybody has a smartphone. Not everyone has a game worth rig or a console.

Sure you don't have the 'OMG diss bargin' feeling that you get from buying all the Dawn of Wars for 30. But you still snag the fence sitters and impulse buyers.

Suki_:

elvor0:

Suki_:
Thats all well and good but I really dislike it when companies talk about stuff like this and leave out all the information that is actually important. You know the things that matter like say profit. That entire article amounts to derp derp people but stuff when its on sale.

Eh what? But that is the point, the increased sales lead to more profit. We've known this for ages in regards to Steam. If you sell x copies for 20 normally, then when a sale comes along selling the game for 5 and %1000 more sales come along, you make a fuck ton of profit. Not only that, this is digital distribution, so you make money on /every/ sale, given you don't have to pay for shipping or creation of the physical media.

Yes you dont have to pay shipping but there are still costs. Steam will still take a cut off of every single sale you make. You also have to take into consideration the effects that it will have on sales in the coming months.

Yes but why would companies /keep/ doing it if it wasn't profitable? They don't have to partake in the sale if they don't want to. The only people to ever come out against the sales are EA out of spite, if it was screwing over developers/publishers someone would have said something by now.

Suki_:

elvor0:

Suki_:
Thats all well and good but I really dislike it when companies talk about stuff like this and leave out all the information that is actually important. You know the things that matter like say profit. That entire article amounts to derp derp people but stuff when its on sale.

Eh what? But that is the point, the increased sales lead to more profit. We've known this for ages in regards to Steam. If you sell x copies for 20 normally, then when a sale comes along selling the game for 5 and %1000 more sales come along, you make a fuck ton of profit. Not only that, this is digital distribution, so you make money on /every/ sale, given you don't have to pay for shipping or creation of the physical media.

Yes you dont have to pay shipping but there are still costs. Steam will still take a cut off of every single sale you make. You also have to take into consideration the effects that it will have on sales in the coming months.

Article:
"We find that we get several thousand percent increases in units and revenue on the days of the Steam sales, and unit sales are usually about double the normal for a few weeks after the sales are over,"

And Steam takes a percentage. So if your game is on Sale so is Steams cut.

Honestly there is no downside for the developer on this. Steam may take a cut, but the amount of sales it helps you get more than makes up for that.

Abandon4093:

And Steam takes a percentage. So if your game is on Sale so is Steams cut.

Honestly there is no downside for the developer on this. Steam may take a cut, but the amount of sales it helps you get more than makes up for that.

Not only that, but Steam's sales can provide hype for sequels. They're currently running a deal on Borderlands where you can try it out for free and buy the full game for $7.50 and buying the full game gets you a discount if you pre-order Borderlands 2 on Steam.

Granted, Gearbox won't be making a fortune on $7.50 copies of Borderlands, but income is income and if it helps boost pre-orders for Borderlands 2, that's even more income.

elvor0:
Yes but why would companies /keep/ doing it if it wasn't profitable? They don't have to partake in the sale if they don't want to. The only people to ever come out against the sales are EA out of spite, if it was screwing over developers/publishers someone would have said something by now.

Because it provides a quick influx of cash and can be used immediatly for something. It is often a lot better to take a sinlge payment of $100,000 now then 12 monthly payments of $10,000. You can often do a lot more with that money upfront especially for small developers.

There are a lot of things that need to be considered when examining wether or not these sales of an overall benefit to developers and we dont have nearly enough information to determine that.

I am not saying that steam sales are good or bad just that I dislike articles like this that talk a whole lot but in the end say nothing. They convince a lot of people who dont know a lot about fininces but they just make those who are informed more skeptical.

Suki_:

elvor0:
Yes but why would companies /keep/ doing it if it wasn't profitable? They don't have to partake in the sale if they don't want to. The only people to ever come out against the sales are EA out of spite, if it was screwing over developers/publishers someone would have said something by now.

Because it provides a quick influx of cash and can be used immediatly for something. It is often a lot better to take a sinlge payment of $100,000 now then 12 monthly payments of $10,000. You can often do a lot more with that money upfront especially for small developers.

There are a lot of things that need to be considered when examining wether or not these sales of an overall benefit to developers and we dont have nearly enough information to determine that.

I am not saying that steam sales are good or bad just that I dislike articles like this that talk a whole lot but in the end say nothing. They convince a lot of people who dont know a lot about fininces but they just make those who are informed more skeptical.

That is very true, and I don't profess to be versed in this sort of stuff, I'm more going on gut feeling. I suspect though, that at least of the big companies would have an accounting team who would be able to figure out whether it's good for them, and even EA havent come straight out and said that the long game is better than the short game in regards to Steam Sales, but this just leading to a circular discussion ><

But yeah, some profit figures would be helpful in these articles, I'm sure I wouldn't massively understand them beyond TLDR points, but for the people that do, it would help understand /exactly/ what goes on.

Well of course they do. Steam sales are actually what made me buy games online in the first place.
There is quite a barrier to just buying games online when you never done it. It just doesn't seem right, but when a game that was 50 euros at release gets a sale for 2,50 you just can't resist buying it online. And the more games you bought online the easier it is to buy online again.

Draech:
That is actually a really good point.

Do publishers have have to plan around the steam sale in order to make sure that potential customers for their title isn't doing this?

It is easy to have a 2000% increase in sale if the titles are not new releases and out of the spotlight. We all know there is a major drop off in sales over just the first month, so if the steam sale takes to momentum of a new release then that could mean massive profit lost.

Now that is an interesting read.

No it's not really, in Retail most publishers only got about 25-30% of the pie anyway, and let's not talk about developers or indies, since they had no chance of being featured in "costly" retail spaces without being beholden to said publishers and their demands.

image

With Digital Distribution on 3rd party platforms like Steam that cut is more along 70%, so even at 50-65% Off they're basically still making the same money they would do at Retail.

If they are self-distributing (e.g. EA on Origin, Valve on Steam etc.) that cut even grows to ~90% and one game sold is basically worth 3 new Retail copies at that point, not to forget that they cannot be "traded in" or similar.

That would even be good if the sales were linear and about double the amount of people would buy the games when the price goes down (it goes down anyway, even at Retail, just look at how much a game is worth 6-12 months after release, it usually goes for a fraction of the original price even without Steam), but that's not exactly what is happening, just look at that data:

Valve co-founder Gabe Newell announced during a DICE keynote today that last weekend's half-price sale of Left 4 Dead resulted in a 3000% increase in sales of the game, posting overall sales that beat the title's original launch performance.

The massive Steam holiday sale was also a big win for Valve and its partners. The following holiday sales data was released, showing the sales breakdown organized by price reduction:

- 10% sale = 35% increase in sales (real dollars, not units shipped)
- 25% sale = 245% increase in sales
- 50% sale = 320% increase in sales
- 75% sale = 1470% increase in sales

This was the first time they did a "Sale" too, so people weren't "used" to it yet, they broke the game's Launch profit that day, and if you look at the sales below, that is increase in PROFIT, not numbers of units sold.

And let's be honest here, if something is "hot" and "new", people will want to see/play it, that's why they also go to the cinema instead of waiting for a movie to come for free on TV or similar. I don't think it's a large part of the playerbase that is willing to wait 6 months+ to get a game they really want just because it is 50% Off then...

to add some numbers: i own about 170 games on steam
i would have about about 10 of those if not for a sale or them being part of some bundle.
i know that kinda sounds like the dumb "i would never have bought it anyway" argument pirates come up with and in a lot of cases i bought other titles by the same developers.

you're a bit late aren't you? i mean that statement was done some time ago, and everybody in that thread pretty much agreed, ea is stupid, somebody honestly used this argument again straight faced?

I'm just going to take this thread as definitive proof that when Valve takes control of the entire gaming industry, everyone will end up better off. Kudos to you, Valve, for being an incredible company, and kudos to you, Dexter, for making this post and giving us information that we may never have found on our own.

Suki_:
There are a lot of things that need to be considered when examining wether or not these sales of an overall benefit to developers and we dont have nearly enough information to determine that.

They're getting sales they would otherwise not get. Forgive me for not seeing the drawbacks to that, but... no, I'm just not seeing it. I've spent a lot of money on the Steam sale, and I don't think I wouldn't have bought even a single of those games at full price.

Exactly how can this affect them in a negative way?

It doesn't take a genius to see that EA is run by brain-damaged infants.

Also, steam sales sometimes set the value of an IP exactly where it belongs.

Speaking of which, I got borderlands for $8. Played it for less than 8 hours before realizing it was a waste of money.

Dexter111:

Draech:
That is actually a really good point.

Do publishers have have to plan around the steam sale in order to make sure that potential customers for their title isn't doing this?

It is easy to have a 2000% increase in sale if the titles are not new releases and out of the spotlight. We all know there is a major drop off in sales over just the first month, so if the steam sale takes to momentum of a new release then that could mean massive profit lost.

Now that is an interesting read.

No it's not really, in Retail most publishers only got about 25-30% of the pie anyway, and let's not talk about developers or indies, since they had no chance of being featured in "costly" retail spaces without being beholden to said publishers and their demands.

image

With Digital Distribution on 3rd party platforms like Steam that cut is more along 70%, so even at 50-65% Off they're basically still making the same money they would do at Retail.

If they are self-distributing (e.g. EA on Origin, Valve on Steam etc.) that cut even grows to ~90% and one game sold is basically worth 3 new Retail copies at that point, not to forget that they cannot be "traded in" or similar.

That would even be good if the sales were linear and about double the amount of people would buy the games when the price goes down (it goes down anyway, even at Retail, just look at how much a game is worth 6-12 months after release, it usually goes for a fraction of the original price even without Steam), but that's not exactly what is happening, just look at that data:

Valve co-founder Gabe Newell announced during a DICE keynote today that last weekend's half-price sale of Left 4 Dead resulted in a 3000% increase in sales of the game, posting overall sales that beat the title's original launch performance.

The massive Steam holiday sale was also a big win for Valve and its partners. The following holiday sales data was released, showing the sales breakdown organized by price reduction:

- 10% sale = 35% increase in sales (real dollars, not units shipped)
- 25% sale = 245% increase in sales
- 50% sale = 320% increase in sales
- 75% sale = 1470% increase in sales

This was the first time they did a "Sale" too, so people weren't "used" to it yet, they broke the game's Launch profit that day, and if you look at the sales below, that is increase in PROFIT, not numbers of units sold.

And let's be honest here, if something is "hot" and "new", people will want to see/play it, that's why they also go to the cinema instead of waiting for a movie to come for free on TV or similar. I don't think it's a large part of the playerbase that is willing to wait 6 months+ to get a game they really want just because it is 50% Off then...

That in no way has anything to do with what I am saying.

I am asking how the sales affect games that are released close to the sale. Not how developer gets money from the sales..

Say I release game X at a standard 60$ pricepoint but I do so during the sales. Are you telling me that a massive amount of titles that arn't new wont take sales of a title who is living mainly on being new.

The only thing you are saying that actually touching on that is the last paragraph and dismissing it as "they will get it anyway because it is new". I dont think so. I think there will be some sales lost if you launch a new title during the sales simply because of the massive amount of bargin available. Games that have already had this "New game" rush.

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