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Valve's Jason Holtman

The business development director addresses Steam concerns, Modern Warfare boycotting and how publishers are learning from the digital platform

GamesIndustry.biz You've said it yourselves, and we've heard it from independent developers too: weekend promotions really boost sales. How do you decide on those promotions, what are they based on and how do you manage those deals?
Jason Holtman

It's really more based on consumer feedback and talking through our relationships with publishers. So we don't have anything in a contract that forces anyone to do anything in the future. It's more about if a game is succeeding at a certain level or doing something interesting we'll go to focusing and see if we can build a promotion or try to add something extra. The sell to do that a year or two ago was harder, because nobody actually understood it. Now everybody understands that curve. They understand that if they try something and they don't like it in the digital world, it ends. We don't have to do this super-convincing job of getting all the marketing together and buying ads and print things and put things on shelves to get ready – and if it fails you're in trouble. We can just try it out. Publishers might suggest 50 per cent off a game, but we'll try to get them to try 75 per cent and see what happens. And if you don't like that, they can try something less.

GamesIndustry.biz Is it difficult convincing publishers and developers that they should discount their games so radically?
Jason Holtman

There's lots of things that go into whether or not you want a sale. It's not just case of cutting price and it'll improve revenue. We've always seen that to be true, by the way. We've never ran a sale where it's been detrimental. Sales have always made more money than the amount of discount. But there are things like timing – some companies might not want to run a discount too early, they may want to spread it out and wait a little while after release. But in general it's pretty well understood that running a sale and promotions on Steam is always a good thing. The other thing we've noticed is that unlike at retail or the traditional model where sales are really just parts of a plateau as you're stepping down to the bargain bin, on a connected community you can run a very deep sale that you wouldn't run for a year or two on the High Street, but then you can stop it and go back to your original price point and customers don't punish you. It's a different phenomena.

GamesIndustry.biz That's something that has been picked up and used to good effect on the App Store for the iPhone. Games drop in price for a week and then go back up...
Jason Holtman

The most radical version of it we did for Team Fortress 2. On Halloween weekend we had some special content and ran three sales for two hours a piece, where we took the game to £2.49. It was radical and unannounced. The fun thing about it was not only are our sales stronger, but the really interesting thing is that sales and buying things, in and of themselves are kind of a game. Marketing is not this thing where people say "I don't like being marketed at, I don't like being forced to buy something." People like to consume and they like games, and when you add these elements people react to that. Even those that didn't buy the game were watching their Twitter feed and laughing at their friends passing the information on and going a little crazy.

GamesIndustry.biz What percentage of the digital distribution market does Steam have in the US or globally?
Jason Holtman

We don't share those figures but we know we're strong. I would say we're market leader. It depends by game and by publisher. It's definitely somewhere you would want to place your PC game.

GamesIndustry.biz The fact that some digital distributors refused to carry Modern Warfare 2 because of Steamworks speaks volumes. Did that affect your sales? And what's your impression of that boycotting?
Jason Holtman

Well Steamworks is this set of tools where we've got all sorts of services that make the game better and we give them out for free and developers can choose to use them or not. In this case, Modern Warfare 2 used quite a lot of them. We try to make those services that developers and our customers want. Whether another distributor wants to carry them or not, we don't have any say in the matter, that's between Activision and other online distributors. To our minds, we think that if you're making a good game and it's got the services a customer wants it should get out in as many channels as possible. If you have a good portal and you're good at collecting money from folks, and attracting them, there's no reason why you shouldn't be. The interesting thing is those games that have Steamworks features in them are really made to be the things customers want. Developers are choosing the features that make the game better. There's no service where there are features you have to have, developers are choosing between those. There's a lot of games that came out in 2009 with Steamworks, and they'll be a lot more games in 2010 that have Steamworks.

GamesIndustry.biz And how were Modern Warfare 2 sales through Steam? Can you give us an impression versus previous titles in the series or other big first-person shooters?
Jason Holtman

Oh, it's a big triple A title for us. I'm trying to think of a way to put this so you can grasp onto something about the size of it... Steam sales actually scale with the game. So if a game sells better on all channels it's a blockbuster, it's going to move an awful lot of units on Steam. As third-party triple A titles go, it's by and large one of our greatest sellers right now. It's doing very, very well. If you look at the player numbers, you can see there's a lot of people enjoying it – not just playing it – that are constantly enjoying it now. Hats off to Infinity Ward, because they made something that people really want to play.

GamesIndustry.biz Do other developers and publishers have a reason to be concerned about the size of Steam? There's have been some concerns about Valve using Steam to sell its own games on the service...
Jason Holtman

There's nothing better in the world for anyone making an Xbox 360 game than the fact that Halo exists. It's awesome, there's nobody saying “boy I wish Bungie hadn't made Halo” because it sold an awful lot of Xboxes that you can sell your games on.

Having the content and the distribution that go hand-in-hand make it a stronger platform, make it a platform to reach more consumers with your own game. If you look at any given time on our top-sellers and our marketing, it's clear that [Valve games] are not the only push out there. In terms of whether we get too big or maybe our content shouldn't be on the platform, it's just doesn't make much sense. Because the content helps the platform grow. And the other thing about PC in general is that unlike a closed platform you can make your own. We have a force of openness on the PC that's always pushing on us. If we started doing things that were bad decisions for customers or developers, they can just move and go somewhere else.

Jason Holtman is director of business development for Steam at Valve. Interview by Matt Martin.

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Matt Martin

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Matt Martin joined GamesIndustry in 2006 and was made editor of the site in 2008. With over ten years experience in journalism, he has written for multiple trade, consumer, contract and business-to-business publications in the games, retail and technology sectors.

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