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Discussion Starter #1
This man is becoming my hero:
Valve: Are Games Too Expensive? | Edge Online

Games may be too expensive.

That is the message Valve Software President Gabe Newell gave the assembled developers at the annual DICE Summit on Wednesday. While the topic of his keynote was the game industry's transition from retail industry to service industry, he revealed sales data from Steam that suggests games are too expensive.

The reason why few have arrived at this conclusion is because you cannot easily experiment with pricing at retail, says Newell. But you can with Steam, Valve's burgeoning digital distribution platform.

On the PC-only Steam service, a wide range of prices are attached to games, and attractive weekend deals throw more pricing variability into the mix. Although Valve was initially afraid that volatility or variability in pricing would confuse or anger its customers--or even cannibalize retail sales--Newell says that was not all the case.

In fact, it dramatically increased sales. Illustrating his point, Newell showed the results of a Left 4 Dead promotion Valve ran last weekend, which cut the price of the game in half to $25. The discount (and promise of new content for the game) rocketed sales of the game on Steam by 3,000 percent.

"We sold more in revenue this last weekend than we did when we launched the product," says Newell. "We were driving a huge uptick in revenue and attracting new customers." And while people believe that we're "screwing" retail, Newell showed that brick-and-mortar sales were unaffected by the online discount.

This phenomenon is not limited to Valve games. Over the holidays, Steam discounted third-party titles. Sales increased 300 percent and units-sold increased by 600 percent.

Still skeptical? Newell said that a weekend sale of one third-party title drove that game's sales up by 18,000 percent and units-sold increased 36,000 percent. It energized the user base, says Newell. When the sale ended, baseline sales were double what they were prior to the weekend discount.

Discounting games does not only increase unit sales--it increases actual revenues. During the 16-day sale window over the holidays, third-parties were given a choice as to how severely they would discount their games. Those that discounted their games by 10 percent saw a 35% uptick in sales--that's dollars, not units. A 25 percent discount meant a 245 percent increase in sales. Dropping the price by 50 percent meant a sales increase of 320 percent. And a 75 percent decrease in the price point generated a 1,470 percent increase in sales.

The conclusion: The games industry is not pricing its products correctly. It's only through the experimentation that such services as Steam allows will the industry be able to find the golden ratio of price and sales. As Academy of Interactive Arts and Sciences President Joseph Olin concluded Wednesday night, this is going to generate a lot of controversy about pricing.
In an industry that's quick to blame piracy for diminished PC sales, it's a relief to us to have an actual insider step up and say, "bull****, here's hard evidence that say's you're full of crap"

<3 the Newell
 

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The Hunter
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Ironically, they just did € == $, so they still have a lot to realize...
 

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That should be basic economics, more people will buy a cheaper product. Granted, it's surprising how many more people will buy cheaper games, but its to be expected. I often hold out until titles are $29.99-$19.99. I rarely purchase games over $29.99, let alone $49.99 or higher...

Now if the industry will listen?
 

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Menthol Flavored
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I like his sales tactic. Heck, I even bought Left4Dead last weekend because of the sale. It was a good deal. You know what the hell works and what could get us out of this economic dilemma? Discount sales. Look at Circut City. The first weekend of the "closing of the business" sale, there was a **** ton of people in the local one that I went to. It's still going out of business, but meh, at least they're going away with a few dollars in their pocket. The crowd was almost to the scale of Black Friday crowds, imo. Then look at T-Shirt Hell. They said that they were closing down their business due to people complaining about their offensive shirts and all products will be 10% off, even though they were bull****ting the whole time. That skyrocketed their sales. Then finally Left4Dead, as mentioned already. People like sales and they will spend money where there is a good sale. Stuff is too expensive nowadays. It's not that people don't want the product, it's that people can't afford it.
 

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Discussion Starter #7
And the thing is, with games, it's all intellectual property. Especially when it comes to Steam, there's so little overhead, no real cost of manufacturing. Just initial dev costs and server overhead. 2 million customers buying a game at 20 bucks is much better than only 500,000 customers buying at 50 bucks.
 

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Is it a dream...
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The thing irkin me about this is that on one hand they say games are too expensive, but on the other they price everything on steam at regular retail price. hell, every game i wanted on steam i got for at least $10 cheaper on amazon. the whole way they sold this digital distro stuff to us is that it would save US money in the end, because they don't have to package the thing, ship it off, etc... I think l4d's improved sales are part price, part pc community being smarter than the console market and seeing through the pricing bs. The only reason i can see for buying a game on steam for full price is if you have a good connection and want to download and play a game RIGHT NOW.
 

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Discussion Starter #11
The thing irkin me about this is that on one hand they say games are too expensive, but on the other they price everything on steam at regular retail price.
only upon release and only for non-valve games. It may be from restrictions from the publisher (ie. okay, you can sell our game on steam but you have to charge retail.)

Even for these games, though, it's only a matter of a month or two before they get dirt cheap on steam.
 

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The thing irkin me about this is that on one hand they say games are too expensive, but on the other they price everything on steam at regular retail price. hell, every game i wanted on steam i got for at least $10 cheaper on amazon. the whole way they sold this digital distro stuff to us is that it would save US money in the end, because they don't have to package the thing, ship it off, etc... I think l4d's improved sales are part price, part pc community being smarter than the console market and seeing through the pricing bs. The only reason i can see for buying a game on steam for full price is if you have a good connection and want to download and play a game RIGHT NOW.
Or if you don't like the DRM on the hardcopy and Steam isn't using that DRM, say EA games for example? Do you want to buy Need for Speed Undercover or Spore for $29-$39 with limited installs or on Steam with no DRM?

Ok, I know Samor, why buy Need for Speed Undercover... :evil:

You obviously know I'm typically a NFS addict except the online exclusive PC version that is coming out! Didn't they release some other crappy pay to play racer back in the late 90s that flopped monumentally?

oO
 

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Menthol Flavored
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And the thing is, with games, it's all intellectual property. Especially when it comes to Steam, there's so little overhead, no real cost of manufacturing. Just initial dev costs and server overhead. 2 million customers buying a game at 20 bucks is much better than only 500,000 customers buying at 50 bucks.
Yeah, that's true. These specials only apply to downloaded versions of the game and not hard copies. So yeah, you're absolutely right about there really being no costs for anything like outsourcing to a company to produce physical copies of the game, box, printing the manual and the cover (I know of the costly price of printing since I work in the print industry), etc., but they only have the dev costs, bandwidth, and advertising.
 

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Yeah, that's true. These specials only apply to downloaded versions of the game and not hard copies. So yeah, you're absolutely right about there really being no costs for anything like outsourcing to a company to produce physical copies of the game, box, printing the manual and the cover (I know of the costly price of printing since I work in the print industry), etc., but they only have the dev costs, bandwidth, and advertising.
Many times now you just get an empty box except for a DVD in a paper case, these morons can't even give you a decent plastic case to put the game in, I guess the $0.25 it costs for the plastic case plus shipping eats into the $49.99+ they charge for the game! oO :???:
 

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Menthol Flavored
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You're right. They also give you a ****ing slip with the license key and half of a list of the controls nowadays instead of a proper game manual. Then, if they do give you a nice plastic box, it's one of those gifukinglynormous PC-DVD ROM cases that has a spindle that can hold 20 other discs. So that means that your disc is sliding around the long ass peg and getting scratched.
 

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I'm so glad Left 4 Dead wasn't in one of those cases TCoS. I know what you mean when you say that. Why the hell do they have such huge boxes for 1 disk and a single sheet of paper? I would think they would save themselves some cash by getting smaller ones, but apparently not.
 

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Menthol Flavored
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They had a case like that for my HL2, HL2:E1, HL2:E2, and The Orange Box, so based off of the trend of what I have seen from my experience, I would assume that L4D would use the same type of boxes. Anyways, I don't want to stray away from the original topic too much.
 

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Ya'ver drink Brazilian bold from fkn dunkn donuts!
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It's now painfully obvious that people love nothing more than a straight up good bargain. These sorts of sales are what I always try to look out for when purchasing a new game, as often where I live games will retail at around $120 for a single new release, or for a game that is two years old. If I can pick up a game for $30, I'm all over it, otherwise I feel I am not getting a good deal, no matter how good the game is.
 

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The one and only
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$120? ****tt thats alot. most games for pc come out around here in illinois for like 50-60. i would definitely start buying more games if they only cost $20 from steam or something. so much better that having the disc.
 

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ヒット激しく速く
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As long as man is a gready beast prices will always be high so i guess there will be no change from the usual...
 
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