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Steam Sales and Devaluation

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CardJoe 1st August 2012, 15:03 Quote
Quote:
Originally Posted by N17 dizzi

More importantly, who else now plays arty farty music in the background when reading something by Joe? :D

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. :p
mighty_pirate 1st August 2012, 15:07 Quote
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.
edzieba 1st August 2012, 15:08 Quote
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!
ziza 1st August 2012, 15:09 Quote
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.
ziza 1st August 2012, 15:11 Quote
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.
Spreadie 1st August 2012, 15:23 Quote
Quote:
Originally Posted by ziza
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!
ziza 1st August 2012, 15:40 Quote
Quote:
Originally Posted by Spreadie
Quote:
Originally Posted by ziza
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.
Spreadie 1st August 2012, 15:49 Quote
Quote:
Originally Posted by ziza
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.
Ok, you lost me.

What has ANY of that got to do with the valuation of the Half Life series? :?
theshadow2001 1st August 2012, 16:33 Quote
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!
ziza 1st August 2012, 16:38 Quote
Quote:
Originally Posted by Spreadie
Quote:
Originally Posted by ziza
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.
Ok, you lost me.

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

Half Life is an excellent game and very innovative. Although is an outstanding game the full price was not an option for me, but as you said it was for other players. When the Orange Box was released you could buy it for 20€, so that is what I did. Orange box had many extras not included in the standard game, but was still less expensive.

Although half life is an outstanding quality product (bugs, extras, ...) the 50€ was a large profit margin for valve. The prof is orange box that had more extras and was cheaper. So my question is who benefits from this 50€ prices?
RichCreedy 1st August 2012, 17:27 Quote
in my reply to Joe on twitter, i don't see it devaluing games, i see it as a way to gain extra revenue, that they may not of gained before.
tad2008 1st August 2012, 17:44 Quote
Sadly for me these days there seem to be fewer "must buy" games out there than I remember in my younger days and that alone makes me feel older than I am.

There have been a handful of titles that have inspired me to pay full price for them, The Witcher and Mass Effect series (tho have held off on ME3 thus far) to name two.

I got the original Portal for free during the steam giveaway and went on to buy Portal 2 for under £4 and the sad thing is, they both felt to me that if I had paid full price for those that I would have been robbed, even with the hype and people out there that love and adore it, they still feel far short of being truly amazing games. Fans of the half life series no doubt were in their element.

Perhaps I am developing a jaded view of games or perhaps my expectations have risen far above what most game companies put out. One thing I do know is that paying £15-20 for a game that last on a couple of days or £30 for a game that last a week is only going to prove to be a guaranteed disappointment for me at least.

I love a game that has atmosphere that I can fully immerse myself in, has ambience, character and an interesting story. I love games with variety and not just an endless series of waypoints, quests or full of endless combat. Give me realism, puzzles, some combat, exploration and real sense of being in the game.
Shirty 1st August 2012, 17:46 Quote
I feel you on Portal, great games, but too short to be even close to full price and pretty much zero replayability (for me anyway).
[-Stash-] 1st August 2012, 18:02 Quote
I spent ~£90 in the Steam Sale and added something like 20-30 games to my library. Without the sales, this month I might have spent ~£11 (OMD2).

I haven't spent anything for 6 months previously to this as I've been playing LoL and Tribes Ascend, both of which are F2P.

Devalues each individual game, but pumps more money into the games industry!
daletur328 1st August 2012, 18:02 Quote
Like most, I agree that games initially are too expensive on steam. I tend to either use the likes of amazon or wait a few months and get them from high street retailers. Out of the many games I have, only dlc packs and non-genre games are bought from steam.
I will not try out a game, that are out of the genre I normally like for £40, but at £2-£10 I will. I have found games I.e SKYRIM that I really like, and so will purchase the next in the series, as indeed, I have purchased its predecessor.
At these prices, I do not find that it devalues a game, time reduces the price on all consumer items as interest wains.
If Steam didn't do these type of sales, I would stick to my comfort zone and not move out it, game demos are all well and good, (to me I find it like film promos, a lot of the time it's the only interesting part of the film), but they will have me and I suspect a few others moving to buying full price, next in series games on the back of a 'devalued' game.
Mrmelon98 1st August 2012, 18:08 Quote
Because the game is a downloadable file, it costs he game-makers nothing to just copy it, so they can't exactly lose money from the summer sale
N17 dizzi 1st August 2012, 18:13 Quote
Quote:
Originally Posted by CardJoe
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. :p

At least you take a bit of banter on the chin ;)
Res 1st August 2012, 18:30 Quote
I used to buy games at launch at full price, I never do now I know, at most, I'm only 6 months away from at least 50% off. Often it can be as little as a month, I feel bad for anyone that bought Max Payne 3 full price.

Still, over all I guess they do better, with those that would not have actually paid for the game before at all buying it, making up for those like me that stopped buying games at launch because of the sales.
pendragon 1st August 2012, 18:53 Quote
i spent over $150 USD during this sale.. that's probably $100 more than I would have spent without the sale, just because it was hard to NOT buy some of these games when they were such good deals (imo) .. so, no the game industry is not LOSING money from these sales.. they're GAINING money that never would have been there without them
ssj12 1st August 2012, 19:17 Quote
Prices have to fall eventually anyway, otherwise customers like me who are unemployed wouldnt be buying games at all. Which do you think publishers/devs want, some money or no money? I have bought some titles day one at their full price off steam. I cannot afford to buy every game day 1, and therefore don't. DLC is also something I rarely buy at full price, as 90% of the time a single new level or a new gun is not worth $3, but its great at a dollar or lower. This steam sale I literally bought Binding of Isaac as the only game and the rest of the DLC maps for CIv 5 (not expansion).

These sales benefit devs/pubs because it allows the broke and tight on cash to still buy their titles. The ones who can afford and want a game badly, does buy the games full price. Some can't. It is how things go. I bought MGS4 for the PS3 on a Walmart Blackfriday sale for $9. Did I screw over Kojima/Sony with my purchase? no, they got something instead of having the game sit on the shelf not being purchased.. its business.
NethLyn 1st August 2012, 20:38 Quote
Good article, I agree that the EA guy is just trolling and it's getting boring hearing them bitch all the time.

You have to define "devalued". EA didn't consider giving away whole CnC titles to pimp the First Decade compilation as devaluation, just marketing. Neither did I consider myself ripped off when I bought CnC 95 and Red Alert full price as you had to DL and burn your own CDs to get the freebies working when I had the big boxes and manuals and enjoyed the games as new. Still bought the compilation, but Amazon did their own discount in the end.

Similarly, the boxed GTA from the 90s was something collectible with the music on the game disc as well as the game and the map but 15 years later you naturally wouldn't buy the same thing for the same price (though with Blu Ray they gave it a go). Hardbacks go to paperback, Cinema films go to £3 DVD and then they're on TV, and games are no different for having the budget option when there's no further sales to be made at the full price.

Example 3: MW3, they're so desparate for sales they let you play for free for a whole weekend twice a year on Steam, clearly more people buy it than wait for the next free two days at a time, or Actiblizz wouldn't have done it for the past two MWs.

Finally, only £3.74 of the money I put into Tribes Ascend went through Steam, that EA bod is forgetting about the times that people decided to buy an item in a F2P game. None of that is lost revenue due to Steam if the publisher doesn't charge for the base game to begin with.
Elton 1st August 2012, 20:51 Quote
I don't buy ****. Honestly. The last steam purchase I made was probably portal. The few new games I have are usually gifts from other people. Why? Honestly, I never find the time to really complete all my games. I don't even have that large of a backlog. Couple it with the fact that so many older games (which are still playable) exist and the great thing that is PS2 on PS3 emulation and I honestly never really get around to playing it.

It's been 5 months since I got Witcher 2 on GOG and Dead Island for cheap. And I've put in a total of 2 hours for Dead Island on 0 for the Witcher 2. Simply said, there's just not enough time.

What does irk me is the monumental cost of BF3. I paid full price for the Limited Edition only to get whomped on by an extra $50 US for map packs. (That of which I still haven't bought despite me putting in many hours into BF3).

But in terms of actual devaluation though, I would say that these sales do somewhat devalue the games, but in the end isn't it still up to the developer how much the game gets sold for? Arkham City for example has been out for quite a significant amount of time (2 GPU iterations is a good indicator for age of game) so it's no surprise there would be a sale. What's baffling about steam sales is how there are still massively expensive games that have been out for years. (I'm looking at you COD:WAW, I love you as a game, but you are still $30) So despite some IPs being somewhat "devalued" you still end up with many that retain their value owing to people's reliance on Steam.
Fizzban 1st August 2012, 20:59 Quote
Quote:
Originally Posted by liratheal
I buy stuff in Steam sales that, like many others in this thread, I'd never buy otherwise.

In fact, looking back, that's about all I buy off Steam, with a handful of exceptions.

This pretty much. Steam are normally overpriced compared to their competitors, and lets not forget 2nd hand games muddying the water. Steam sales and owning a few steamworks games are the only reason I have it installed.
Flexible_Lorry 2nd August 2012, 01:00 Quote
Every industry does sales. No problems. They help sell products. Don't overthink it. Most games coming out will be crap (just like most movies/books/telly shows etc etc). There will be great ones. There will be good ones. Stop worrying. Stop buying crap games. Stop giving 9/10 to overhyped pieces of tripe.
javaman 2nd August 2012, 01:06 Quote
Im one of those who wouldn't buy unless it was on sale. Simply I don't have the disposable cash. This sale I spent £35ish, and got 9 or 10 games. Do I buy one game or spread the profit around? The removal of packaging, middlemen (game, HMV), shipping and even burning to disk probably saves half the normal price anyway, there is no way I would pay over £15 for a game unless
a) I want it hands down (Fallout new vegas)
b) I want to support the developer (dustforce, skyrim, portal 2)

Heck Im on my 3rd copy of mass effect since DRM screwed me over. My mate managed to get the disk working on his PC so he has my first copy, my second copy still works but im terrified of it happening again so I bough ME from steam. I done the same with far cry 2 (DRM screwed me over again) but only at sale price. Do you really expect me to pay full price case those assholes have software that breaks the game? The only other game I rebought was fallout 3 since I wantedit in my steam collection rather than just the disk. I don't mind it since Ive already sunk 300+ hours into it and dont have a DVD drive on my laptop so steam was the cheaper and easier way of doing things.

/sarcasm on ..... sure PC gaming is dead, its only a handful of people buy games, all the rest pirate them. They can earn the mega bucks from console tards
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