What's the logic behind games being 80% off on Steam?

[bylam]

Customers have an acquisition cost.

If you pay one of the big companies like Facebook or Google for advertising, you are literally spending money to acquire customers. You aren't selling a game for $60, you are selling it for $60 minus whatever the average cost of acquiring a customer is. Typically the further you move from launch, the higher the cost of acquiring a customer.

Now look at Vogel. Perhaps every 1000th person who plays his games becomes a loyal fan. That means that they always buy his new releases at full price. Perhaps their average spend on his games is $100.
It makes sense for him to heavily discount a $20 game to cast the widest possible net to drag in more loyal fans. His cost for acquisition of customers is 0 - he actually makes money from all those people who spend a few $ to find out whether they like his games or not. But the loyal fans he acquires through this process - people who will spend money on his games - are the whole point. Not the "lost" revenue, which can't really be quantified.

 

[Morkar Left]

But that's shortterm thinking in the end. With regular 80% discounts for games that are 1-2 years old people get used to it and therefore just wait when they aren't in a big "need" to play a game. And the people who don't need to play the latest shit are usually the ones who could afford to do it (older people with less freetime but more money).

 

[Cael]

But that's shortterm thinking in the end. With regular 80% discounts for games that are 1-2 years old people get used to it and therefore just wait when they aren't in a big "need" to play a game. And the people who don't need to play the latest shit are usually the ones who could afford to do it (older people with less freetime but more money).

If that is the case, why do the movies always gross the most in the first few weeks? Or games like Star Wars sell the most in the first few weeks?

 

[bylam]

But that's shortterm thinking in the end. With regular 80% discounts for games that are 1-2 years old people get used to it and therefore just wait when they aren't in a big "need" to play a game. And the people who don't need to play the latest shit are usually the ones who could afford to do it (older people with less freetime but more money).

Psychology of Delayed Gratification kinda shows otherwise. People are shit at waiting.
Multiplayer games in particular - people buy them when other people buy them. Has a snowball effect (can also fuck you royally in other cases).

The trend that makes no sense to me is the "discount on launch" thing. That is when your game is naturally the most sought after and has the added effect of novelty value.

 

[Morkar Left]

But that's shortterm thinking in the end. With regular 80% discounts for games that are 1-2 years old people get used to it and therefore just wait when they aren't in a big "need" to play a game. And the people who don't need to play the latest shit are usually the ones who could afford to do it (older people with less freetime but more money).

If that is the case, why do the movies always gross the most in the first few weeks? Or games like Star Wars sell the most in the first few weeks?

I guess because few people have a cinema at home (especially with 3d).

 

[Cael]

But that's shortterm thinking in the end. With regular 80% discounts for games that are 1-2 years old people get used to it and therefore just wait when they aren't in a big "need" to play a game. And the people who don't need to play the latest shit are usually the ones who could afford to do it (older people with less freetime but more money).

If that is the case, why do the movies always gross the most in the first few weeks? Or games like Star Wars sell the most in the first few weeks?

I guess because few people have a cinema at home (especially with 3d).

More like the hype, wanting to be seen as hip, and not wanting to wait. Same reasons people like to jump on bandwagons and seem rather than do.

 

[Vault Dweller]

So I noticed that on my Steam wishlist, Avadon: The Black Fortress, is selling at 80% off. So the USD price is 10 dollars, but here in thirdworldia this is less, 319.95 pesos. This is actually a 30% discount on the USD rate, which is weird because most games sell here at about 45% off on USD rates. But now with 80% off promotion, the price comes to 64 pesos, or 1.38 USD. If Steam takes 30%, and 30% of the rest goes to taxes, Vogel is basically left with 67 cents.

What's the logic or purpose behind selling a game at that price?

Let's ignore taxes for now as it's a different story and you have to factor in expenses first. If Jeff can sell 5,000 copies and earn a dollar per copy, it's better than selling 2-3 copies a day at full price.

But that's shortterm thinking in the end. With regular 80% discounts for games that are 1-2 years old people get used to it and therefore just wait when they aren't in a big "need" to play a game. And the people who don't need to play the latest shit are usually the ones who could afford to do it (older people with less freetime but more money).

How's that different from "pay $50 for a new game on release in a proper game store or wait 2 years to buy it for $5-10 when it hits the bargain bin"? That's how it worked for the last 30 years so there's nothing new there. If you want to play a new game on release, you pay full price (let's say $49.99). If you can wait 6 months you can buy it for $39.99. A year - $19.99-29.99, etc. If a game is selling poorly (like Wiz 8), it will hit the bargain bin within a year.

 

[Whisper]

So I noticed that on my Steam wishlist, Avadon: The Black Fortress, is selling at 80% off. So the USD price is 10 dollars, but here in thirdworldia this is less, 319.95 pesos. This is actually a 30% discount on the USD rate, which is weird because most games sell here at about 45% off on USD rates. But now with 80% off promotion, the price comes to 64 pesos, or 1.38 USD. If Steam takes 30%, and 30% of the rest goes to taxes, Vogel is basically left with 67 cents.

What's the logic or purpose behind selling a game at that price?

Let's ignore taxes for now as it's a different story and you have to factor in expenses first. If Jeff can sell 5,000 copies and earn a dollar per copy, it's better than selling 2-3 copies a day at full price.

But that's shortterm thinking in the end. With regular 80% discounts for games that are 1-2 years old people get used to it and therefore just wait when they aren't in a big "need" to play a game. And the people who don't need to play the latest shit are usually the ones who could afford to do it (older people with less freetime but more money).

How's that different from "pay $50 for a new game on release in a proper game store or wait 2 years to buy it for $5-10 when it hits the bargain bin"? That's how it worked for the last 30 years so there's nothing new there. If you want to play a new game on release, you pay full price (let's say $49.99). If you can wait 6 months you can buy it for $39.99. A year - $19.99-29.99, etc. If a game is selling poorly (like Wiz 8), it will hit the bargain bin within a year.

Wiz8 was selling poorly??

 

[HoboForEternity]

Another thing is (which has been said too in this topic) is really get impulse buyer to buy it, if 1000 people buy with and 1% of them become a fan, you get 10 peoplr wo probably will buy your next game at full price.

I am one of those.

Pirated avernum eftp and buy geneforge around <2 usd (converted from indonesian rupiah regional price) and i am a loyal fan.

I bought his new releases at full price,even avadon.

So now woth a pirated copy of eftp and cola priced geneforge, jeff has earned around 30 usd from me, mostly from avernum 2, avadon 3 and avermum 3 ans probably his next game too whatever it is.

 

[Excommunicator]

The movie analogy doesn't work because they have a cinema release and then a home release. You can't have a cinema experience at home.

A game like AoD I think would benefit from establishing a floor for pricing. It won't ever penetrate the mainstream so arguably trying to sell it outside the niche may contribute to a decline in total audience perception. You're talking about the kind of player who would become resentful about being unable to succeed at the game.

I think extreme and permanent price discounting is never the answer (unless your game was horrible to begin with). If you want to heavily discount a game then do some sort of competition, time limited promotion or a bundle with newer releases.

 

[Vault Dweller]

Wiz8 was selling poorly??

IIRC, it went something like this. Sir-Tech struggled to find a distributor, so it took them a year to get the game into stores. The only place that agreed to take it was EB Games and on a limited 30-day deal (meaning after 30 days it was off the shelves, meaning zero visibility, so the game couldn't possibly sell well). Sir-Tech went bankrupt shortly after.

PS. Apparently, only 200,000 copies were produced.

 

[aweigh]

It probably sold better in Japan than in the states.

 

[Whisper]

Wiz8 was selling poorly??

IIRC, it went something like this. Sir-Tech struggled to find a distributor, so it took them a year to get the game into stores. The only place that agreed to take it was EB Games and on a limited 30-day deal (meaning after 30 days it was off the shelves, meaning zero visibility, so the game couldn't possibly sell well). Sir-Tech went bankrupt shortly after.

PS. Apparently, only 200,000 copies were produced.

This doesnt make any sense. This game is perfect! Why they had problem with finding distributor? I dont understand. Its not that hard or niche, it has good appeal for usual people.

 

[Telengard]

Wiz8 was selling poorly??

IIRC, it went something like this. Sir-Tech struggled to find a distributor, so it took them a year to get the game into stores. The only place that agreed to take it was EB Games and on a limited 30-day deal (meaning after 30 days it was off the shelves, meaning zero visibility, so the game couldn't possibly sell well). Sir-Tech went bankrupt shortly after.

PS. Apparently, only 200,000 copies were produced.

This doesnt make any sense. This game is perfect! Why they had problem with finding distributor? I dont understand. Its not that hard or niche, it has good appeal for usual people.

Those were still the brick and mortar days, so limited number of spots on the shelf. So, would you as a store owner rather devote that shelf space to something that only has a print run of 200,000, or do you want to put Tomb Raider there, which is going to do 6,000,000. And remember, you only get 40% of the sale, and with that you have to pay employees and the then skyrocketing mall rent, so you at that point have to do an average of $1000 of business a day.

In that sort of environment, any box that is not putting out registerable daily sales is sucking up space which you need to be using to earn your rent money.

 

[Burning Bridges]

Discounts are normally severely time limited and tied to important updates. So except for a few steam addicts who have been online for every day in the last year, there is simply a statistical guarantee that only a certain number of people will buy during the discount. It's similar to when they make a huge ad campaign over discounted coffee in the supermarket. Then an employee puts 1 box of discounted coffee packs in a shelf that is hidden near the very exit, and some people have already packed other coffee or the cheap coffee is sold out or they buy some other shit instead. It's more of a psychological thing, you want to prevent people losing interest in your game, so you give away copies almost for free. And besides, I don't think all developers are really happy with the way they handled discounts, selling too often for a too big discount can make people wary to buy at almost any price. For example I saw Alien Desolation for under 8 dollars at least 5 times during the last year, why would I buy for the regular 40 bucks?

 

[vonAchdorf]

It's rare to see games not on discount somewhere. Steam has its big promotions and the weekly one, GoG seems to have added tons more during the last year - in the last few months, I got the feeling that the time between GoG sales events was like a week. And if the big guys don't have sales the resellers have them.

 

[Elemental_wanamingo]

1. It will probably piss off and alienate many that paid full price making them hesitant to do so in the future.

If someone is so special that he gets pissed off because a game he bought is later available at discounted price then all I can do is laugh. If someone gets pissed because things can be bought at discounted prices then that person should never have access to money. That's a whole new level of retardedness. It is like the special trait that adds -2 to your level 1 intelligence.

 

[roshan]

OK so I bought the whole Blackguards series (2 games, 1 expansion) for about a dollar and 45 cents. Even though I can't play them because I don't have a 3D card and don't like 3D games. And even though I am almost completely disinterested in RPGs nowadays. But for $1.45 which is almost nothing it's not bad to have the option to play a supposedly decent tactical RPG with all the conveniences of the Steam platform.

So yeah in the years since I posted this I totally understand all this discounting stuff.

 

[Shackleton]

Wiz8 was selling poorly??

IIRC, it went something like this. Sir-Tech struggled to find a distributor, so it took them a year to get the game into stores. The only place that agreed to take it was EB Games and on a limited 30-day deal (meaning after 30 days it was off the shelves, meaning zero visibility, so the game couldn't possibly sell well). Sir-Tech went bankrupt shortly after.

PS. Apparently, only 200,000 copies were produced.

Goddammit, you got me excited that my boxed copy of Wiz 8 sitting in my 'old games' box was worth a king's ransom!

Then I went on ebay and saw them selling for £5...

One day maybe, one day.