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Valve defends Steam sales techniques as helpful to IP expansion

Valve defends Steam sales techniques as helpful to IP expansion

Wed 11 Jul 2012 5:23pm GMT / 1:23pm EDT / 10:23am PDT
RetailGames

Steam sales do not 'cheapen' IPs argues Valve business chief Jason Holtman

Steam remains the dominant platform for digital distribution on the net, despite the efforts and criticisms of various competing platforms. Among those critics is EA, who claims that the various fire sale offers that occur with alarming regularity on Steam are in fact hindering IP growth.

Of course, Valve takes issue with the notion, saying that sales are helping expand these games to new clients, and the data proves it. "Ask our partners," says Valve business development head Jason Holtman. "Ask the large to the small and see what they think about that. Putting it all in the bucket of, it's all about the discounts; I don't think that's everything about it."

"Discounts serve a lot of functions. Highlighting serves a lot of functions. The qualities of the games serve a lot of functions. Everything we've seen, PC games and IP and all those franchises are more valuable today than they were four or five years ago."

"If this were all about a cheapening and somehow lessening the money out there or somehow customers don't want to pay any more, they think everything should be like a used car lot - sticker price is not the real price - you'd feel that and you'd get real reinforcement of that. We don't see any of that. We see people buying a lot and enjoying it and playing a lot."

"A lot" specifically entails well over 40 million users that have been active and purchasing on the Steam platform. 40 million users gives Valve a lot of data to crunch through as they figure out how to best sell and market the ever-expanding library of games, and things seem to be working even without major sales. "For instance, if all that were true, nobody would ever pre-purchase a game ever on Steam, ever again. You just wouldn't," he offered. "In the back of your mind be like, okay, in six months to a year, maybe it'll be 50% off on a day or a weekend or during one of our seasonal promotions. Probably true. But our pre-orders are bigger than they used to be. Tons of people, right? And our day one sales are bigger than they used to be. Our first week, second week, third week, all those are bigger."

"That points out that what's happened with those sales is, you've probably caught somebody and introduced them to a game when they haven't had it, and they've played it, and the next time the franchise comes out or the next move from that publisher, the next move from the partner, they've just become more avid gamers."

"The trade-off they're making is a time trade-off."

[via Eurogamer]

7 Comments

Tim Carter
Designer - Writer - Producer

I don't know where Valve gets off thinking that selling things at dollar-store prices creates a perception of value.

Posted:11 months ago

#1

Morville O'Driscoll
Games Blogger & Journalist

*sigh*

Tim, the consumer dictates what value is given to an IP. This is why Dungeon Siege 3 was selling for half its RRP in Game, 4 weeks after release, whilst ARMA 2 CO (a game released over 2 years ago) has been near the top of the Steam best-selling chart for (no exaggeration) months, without any discount.

I appreciate that you think games can be as valuable as art, but the games industry is part business, part artistic venture. As such, anything that encourages a consumer to dip a toe into a new IP should be welcomed, so long as that IP (or, more accurately, that entertainment experience) is a quality item. This is 1) good for the industry, since it creates a wider user-base for the IP, as Holtman says, and 2) good for the consumer, since they can inexpensively broaden their gaming horizons.

As a further comment, The Complete Maus is selling on Amazon for two-thirds it's RRP. Does this lessen the artistic work of Art Spiegelman? Does it lessen the contribution he's made to the comics industry? Does it cheapen or demean the concept of Maus?

Edited 3 times. Last edit by Morville O'Driscoll on 11th July 2012 10:19pm

Posted:11 months ago

#2

Sometimes I feel like developers and publishers get so wrapped up in the concept of their own art that they completely forget how economics works. You can add what you consider to be value to your games, and you can price them however you want, but the fact is at the end of the day what you believe your game is worth means less than nothing. What matters is what consumers think it's worth.

And the fact is that consumers won't buy most games at full price. If Steam sales didn't exist, they wouldn't buy your game at a high price, they would just never buy your game. You can "hold out" at $60 all you want, but you're just going to be ignored in the long run unless you're one of the exceptionally high-demanded games like Skyrim. You can't MAKE consumers value your game more by hold prices high, and consumers aren't "waiting" for sales.

The sales server a completely different purpose of making consumers consider buying things that they would never, ever buy at full price. This in turn gives you a chance to make money off a segment of the market that was completely lost to you at launch, while at the same time giving them a taste of the games you make, hopefully interesting them in your future projects and expanding your fan-base (hence the increased numbers in preorders and day one purchases Steam experiences over time).

It's a constant cycle of win-win for both consumers and publishers. Why do you think Amazon and Valve/Steam are so huge? It's AMAZING how successful you can be when you are consumer friendly, because the consumers will be friendly to you back. :)

Posted:11 months ago

#3

Alex O'Dwyer
Character Animator

"I don't know where Valve gets off thinking that selling things at dollar-store prices creates a perception of value."

I may be wrong but don't the publishers dictate the sale price of their games on Steam. Or for that matter if their games will be part of the sale at all. Isn't steam just a middleman??

Edited 1 times. Last edit by Alex O'Dwyer on 12th July 2012 8:24am

Posted:11 months ago

#4

Morville O'Driscoll
Games Blogger & Journalist

@ Alex

Entirely true, so far as I'm aware. Valve make suggestions about price (or at least, about the initial price offered), but it's the publisher/developer who has the final say so.

Posted:11 months ago

#5

Paul Shirley
Programmers

@Morville & Tim

"I appreciate that you think games can be as valuable as art"

...just remember that artists can also completely fail to sell their art.

art!=valuable

Posted:11 months ago

#6

Alex Byrom
Studying Multiplayer Online games design

I love steam, they treat you like a person not a number. I bought the Thq collection yesterday £35 for pretty much all THQ's back catalogue, there were lots of games in it I would have never had bought. A sale is a sale. It's better to sell 10 copies of your game for £3 rather than no copies for £10. The article speaks alot of sense, a game's value is decided by the customer.

Posted:11 months ago

#7

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