Lower price, higher profits?

[Elliot Kane]

Apparently, Valve and GamersGate have experimented a bit with lower prices on some titles - an seen profits soar as a result!.

Pretty interesting, I thought...

[mysterd]

Not really too much that ain't been said before - especially by Valve.

Anytime Valve does those killer X-Mas Sales, Weekend Deals, or Mid-Week Sales, they make tons of sales and lots of profits. Valve does REALLY good on their sales of their own games, when they do these sales - as it's been said sales jumped on like over 200% when they put games like any of the HL series or Left 4 Dead series on sale for even say 50% off.

The thing is - w/ digital services, all they do is basically type in the price changes and they can instantly track sales. There's no major overhead here - especially since there ain't gameboxes and discs. Probably not too many employees to worry about since the price changes are digitally done, not manually.

Whereas retailers might have to wait a short time period to change prices to make some sales - b/c they might have look at data, actually re-sticker items w/ lower prices (if they feel like it - some stores like WalMart and Target are lazy - and to get most recent/accurate price, run the game to a price scanner or ask your casher to just ring it up).

You might find this interesting, Kane - Steam sales in 2009 increased 205% over its previous year (2008).

EDIT:
Kane, I don't know if you use Steam, but a new Beta Version is out there - and I really dig what it has going on for some new features.

In your Games Owned List, when running the Games List in List Mode - when you select a game, it shows you the latest news on the game (if there's patches, news on the game, etc); who of your friends owns that same Steam game; and also who of your friends is playing that same game online - so you can say join them.

When you sign onto Steam, on the Main Page, it will show you who bought what games recently. Another good way to see if your friend bought something and you think you should Keep Up With The Jones, basically - if you want to play what someone else is playing and/or maybe join them in an online game.

As we know - I'll never like that Steam force SP games to be activated online and that you must keep your SP games updated to keep playing them (I can understand this feature for MP, though - since you all should be running SAME version to play together) - but, it's something I can tolerate. It's a lot better than that U-Play DRM UbiSoft has going on.

[Elliot Kane]

I doubt I'll ever warm to Steam. FAR too much like rental, as you can only only continue playing your games on their sufferance, really. They hide it well, sure, but that's what any form of online registration amounts to, however many bells and whistles get attached.

Eminently reasonable for MMOs; for single player games, never.

***

I found this article interesting - and your additions, D - because it seems to indicate that a drop in the base price of games could pick up sales tremendously, both digitally and otherwise. I wonder if any publisher will take note...

[mysterd]

Mar 13, 2010 1:46:41 GMT Elliot Kane said:

I doubt I'll ever warm to Steam. FAR too much like rental, as you can only only continue playing your games on their sufferance, really. They hide it well, sure, but that's what any form of online registration amounts to, however many bells and whistles get attached.

Eminently reasonable for MMOs; for single player games, never.

Thing w/ Steam is - you have to run Steam program to play/run your Steam game - in offline or online mode. Impulse doesn't require this - Impulse is only required for those who actually want to get a game's newest patches or want to play a MP portion of their game online. Some Impulse games require activation, some don't - depends on the 3rd party publisher, namely.

What I like about Impulse is you need it to keep your game up-to-date, but you do NOT need to run the program to boot your game up. Though, I think in many other ways, Steam's tools are much more robust and very easy to use.

Both Steam and Impulse allow you to back-up your game into a compressed file format(s) of their own and then burn them onto disc(s). You WILL need Steam or Impulse installed so the program will let you extract the files, if you need to reinstall a game.

Microsoft's G4WL GOD (Games For Windows Live - Games On Demand) allows to you download your game and then you have compressed CAB files, once all is said and done. You want to back-up your CAB files onto disc before you click install - or they destroy themselves, as I've learned the hard way. These CAB files - you can install them using G4WL and click install for your downloaded game; or just run the installer EXE file in the CAB file and install the game outside of G4WL. Though, most G4WL GOD games have an activation requirement and have a 5 installs allowed per month. Some G4WL require you to be online to actually save your game, BTW - see Bioshock 2, Batman AA, and GTA4.

I found this article interesting - and your additions, D - because it seems to indicate that a drop in the base price of games could pick up sales tremendously, both digitally and otherwise. I wonder if any publisher will take note...

Digital distribution (DD) is quite direct with not too many parties involved normally. Normally, it's just the digital publisher; regular game publisher; and the actual developer - that cuts out the middle-men who have to drive trucks loaded w/ pallets of games to the retailer; the need of a printed manual; need of a case that holds your printed game disc(s); the retailer with shelf-space to store the game; etc.

So, given the above - I bet retailers take a loss when the game doesn't move quickly off the shelf. Meanwhile on DD - hey, there's only virtual space and servers/hard drives/mainframes probably needed and you just generate game keys. I bet retailers are more opt to take a loss than say a Digital Distributor.

For those who do buy through digital distribution - We, the savvy gamer, supply that - and many PC's come w/ DVD burners and blank DVD's are cheap these days. So are cases, too.

Retailers could benefit from a drop in price and boost game sales, but I don't know if they can compete w/ the way digital distributors like Steam seem to do things - they just have so little overhead, man-power, and can instantly change prices w/ a drop of a heartbeat w/out any major other issues and factors coming into play.

As for publishers (who are the ones w/ the money, pretty much) - I don't know, but game costs just get higher and higher and higher; especially when they aim for VERY high production values and all. They're greedy and they probably don't want to cut prices too often. I think that's why DLC came into play - as this seems to be a good business for dev's quickly pumping episodic expansions out and over-pricing the hell out of them. Quick money for publishers and dev's.

[Elliot Kane]

It would be interesting to find out just how much some of these ridiculous DRM measures push the price of development up, too. Running loads of servers 24/7 can't be cheap, for example, and the set up must cost immense amounts. Games are certainly more expensive to make anyway, but add in all that stuff and it must push the break even point quite a bit higher,

As for retailers taking a loss if stuff sits too long on the shelf - well, depends on their business model, but by and large, yes. Space is limited in a shop, and everything that sits too long is taking up space that could be used by some other item that would sell. Generally, retailers have the 'immediate sale' section where they probably make most of their money and the 'sell some day' section where they put stock that will probably sit awhile first. Getting those proportions right is likely the margin between success and failure for any retailer. I know I don't envy them...

[mysterd]

Yeah, I do wonder how expensive running those DRM servers must be. I'm guessing it probably ain't cheap - and probably is a pain in the neck, once a new game drops that requires activation b/c everybody must be activating the damn thing at the same time and trying to hit a server. I'm guessing Ubi's servers for AC2 and SH5 can't be fun to maintain, since these games require you to be online PERIOD to even play the game - SP or MP. Same will ring true for their next POP game, too - and the list will continue...I just can't see how maintaining all this is going to be fun for them without there being problems. And we all know, there's been plenty of problems w/ this thing and servers going down, since AC2 PC dropped...

But also, some of these NEWER Steam games support Steam Cloud - and these games do more than save your saved games to your HDD,they also do save them to Steam's servers - just in case you want to switch to another PC, sign onto Steam, and want to get the saves from off their servers. I find that very cool, myself - but yeah, I'm guessing that must be expensive to maintain all these servers and all of these saved games everybody has.

[Elliot Kane]

I can see the point of Cloud. It's a useful customer feature that encourages people to join Steam and allows them to back up their save games in a place where a catastrophic computer crash won't wipe them all out. It's offering an advantage that is not available on your home PC and thus encouraging more custom. The more things like that which Steam comes up with to make things easier and better for their customers, the more customers they will get, the more revenue they will generate, etc. It's all positives.

The DRM servers are a whole other thing. They do nothing for the customer except to add vast layers of inconvenience and annoyance. As such, they not only cost money to upkeep, but they also drive customers away and thus drive down revenue. They're crazy.

[mysterd]

Mar 13, 2010 15:08:14 GMT Elliot Kane said:

I can see the point of Cloud. It's a useful customer feature that encourages people to join Steam and allows them to back up their save games in a place where a catastrophic computer crash won't wipe them all out. It's offering an advantage that is not available on your home PC and thus encouraging more custom. The more things like that which Steam comes up with to make things easier and better for their customers, the more customers they will get, the more revenue they will generate, etc. It's all positives.

Cloud does it right - your saves go on your HDD and their servers.

When Mac support gets added (Steam Play feature), your saves from your HDD and/or saves stored on Steam Cloud's server will work, regardless of whether you play on a Mac or Windows PC - as long as the game supports the features, of course.

This stuff's being integrated into Valve's Source Engine - so, I would not be surprised if more companies decide to support Source suddenly.

The DRM servers are a whole other thing. They do nothing for the customer except to add vast layers of inconvenience and annoyance. As such, they not only cost money to upkeep, but they also drive customers away and thus drive down revenue. They're crazy.

Agreed.