Originally Posted by erunion
Developers have said how much they love the 70% off sales on steam. They increase revenue by an amazing percent. I wish I still had the link to the figures. Selling software is not like selling hardware, the per unit cost is very little; what matters is revenue. In the end its actually better to net $1 million by selling 50,000 copies than to net $1 million by selling 25,000 copy, especially for a small developer.
EA hates those sales because, as a publisher, it hurts their ability to do multi-billion dollar launches. They are in the business of selling boxes, not games.
I like how you somehow connect launching a game with discounting O_o
Also, here's GOG saying pretty much the exact same thing EA did.http://www.rockpapershotgun.com/2012/04/06/gog-talks-preserving-value-of-games-slow-death-of-drm/#more-102864
Didn't see any of the "BUT THEN HOW WILL GOG COMPETE?!!?!", "GOG are idiots!!" or the song and dance of recent similar announcements but then again, some people are a little bit hypocritical
I will go into the article where Gabe discusses sales though:
It seems Valve are constantly experimenting on us. Newell explains how the various offers that have appeared on Steam are as much science as they are capitalism. As reported by Geek Wire, Newell discussed the difference between silently discounting a game, and making a big fuss about a sale. When they quietly lowered prices, they found it to be elastic (sales increase proportionally, so the overall revenue remains the same), but…
“The sale is a highly promoted event that has ancillary media like comic books and movies associated with it. We do a 75 percent price reduction, our Counter-Strike experience tells us that our gross revenue would remain constant. Instead what we saw was our gross revenue increased by a factor of 40. Not 40 percent, but a factor of 40. Which is completely not predicted by our previous experience with silent price variation.”
Certain (Read:many, most, too many to retain faith in humanity/individual thought process) people will read this and completely miss the actual point in lieu of their Gabe Boner. It also goes well with my recent assertion of the fact that while people rabble and rant about companies being blinded towards anything but £$£$£, consumers for the most part are sometimes no better. Do as I say, not as I do and such. (For the most part....sometimes..¬_¬)
The discussion here was not simply about the effectiveness of a 75% sale, but the effectiveness of MARKETING and ADVERTISING that 75% sale.
This was about the difference between SILENTLY dropping prices like they would do in a regular retailer (as opposed to Steam prices usually being around £10 more than competitive retail prices in a games later life) and making a huge song and dance about having a sale. The 75% was mentioned, but that wasn't actually the point he was making.
He clearly states that he is talking about the difference in getting people excited and buzzed about a deal and silently dropping price of a game over time.
Also, you never know what this factor of 40 is in relation to. If a game is not selling because its priced too high for its price point in the first place, then dropping it to reasonable prices can EASILY increase revenue by a factor of 40.
I could also mention how Valve has the blog who wrote this article "Rock Paper Shotgun" have a "relationship" with Valve, but thats for another time.
Really though, as much as people keep going on with the "its not about the money" thing, this very article shows how the whole thing is literally experiments in ways to extract money from people via psychological impact (even when people aren't really interested in the games).
Essentially working on how to turn gamers into women at a large sale. Doesn't matter if you were particularly interested in said game before it was on sale. Now its on sale, you gotta have it. Or the mere fact that because a sale is on, purchases must be made in order to not miss out. Not to mention the fact that they just love to talk about what they bought in X sale.
Then we get that same argument we have with our lady friends when all that stuff they just bought doesn't even get used, yet they run out to buy even more stuff come the next sale, hence the 100 pairs of unused clothing (or games) that she has in her wardrobe lol! Heck, with all those things just sitting there and collecting dust, you could possibly say its almost as if she didn't even value them at all... Nah. Crazy talk.
Dont even get me started on how she has to keep going back to that same damn shop so often just incase a sale pops up and she misses it
I'm actually finding this interesting even as I type this as I've never even really looked at it like that before and the more I ponder on it, the more I have to just smile at the "EA only care about £$£$£" statements.
Maybe EA do only care about the £$£$, but you can bet that more time/resources are spent at Valve researching marketing psychology than working on HL3 (or games in general tbh) and I scoff at the thought of Gabe saying something like this and being loved for it lol.
@ Below, incorrect filter setting for installed/hidden games fail? Did you actually activate the games on Origin?Edited by GrizzleBoy - 6/25/12 at 6:39pm