Sale pricing on Steam games: 50% off = 3000% increase in sales | Hacker News Reader

Sale pricing on Steam games: 50% off = 3000% increase in sales

arstechnica.com

37 pointstkiley12 comments

This is the same thing that Apple saw in the app store: when you get people comfortable with the idea of consistently buying, and it's easy, sales soar. It jives with how I think about purchases as well. A $40 purchase is a big deal, but it's very easy to spend $10 4 times.

It'll be interesting to see how far we can push this model. I don't believe in the micropayments or subscription models as a panacea, but it's pretty clear that digital distribution allows for greater volume at lower cost. Will great games like L4D make enough money at $10? $5? $1? Will app store games make enough at $0.10? $0.01?

It'll be interesting to see what it does to quality as well. Steam seems to be doing well with quality, even when distribution costs are nearly nothing, but the Apple's app store has seen a huge number of cheap, addictive games because they make more money for less development time. Hopefully it all balances out, but more and more, software will lose the ability to price itself as a physical good that comes in a box. Where does it settle?

In any case, I'm excited.

Steam has a fair amount of suspicious games. Nowhere near the amount as the App Store since Steam isn't a self-publishing platform, you have to sign agreements with them and get an account rep and stuff.

Steam excels because it does a far better job than than the App Store of making sure that quality is always on the front page, while also making sure that the front page changes often. I think they have found a good meeting point between content/metrics-driven decisions and an editorial voice for picking what gets featured. The App Store, not so much.

Part of the 3000% jump was probably due to the fact that this particular sale made the front page of reddit and digg, but still, it's quite impressive.

They did have more general numbers, where a 50% cut is a 320% increase. As revenue increase the cuts work out as:

10% cut : 22% increase

25% cut : 159% increase

50% cut : 110% increase

75% cut : 293% increase

That's pretty amazing. I wonder what happens to revenue in the weeks following the sale; do sales dry up completely, or do they stay strong as players recruit their friends, perhaps?

Im sure that it decreases, but I bet that this effect lasts for at least three weeks.

I'm not so sure. People who were considering a purchase probably got it during the sale. Now that the sale has established that the game is "worth" $25, perhaps people will wait longer before buying to see if the price drops again. This may hurt their higher-price sales, not only on this game but on all Steam games.

(At least, that's the logic I'd use. I've bought several games on Steam -- including this one -- all on 10%-75% sales.)

Ah but are you buying because the price is $25 or because it's half the price of $50?

I buy all my games when they go below $30, so it makes no difference to me if the game goes on sale or simply drops in price because I'll grab it anyway. Most times I'll grab the game used as I get a disc in excellent quality, usually $10 cheaper than the original game. I'm already watching the used Fable 2 and Fallout 3 games for when they hit $30 because I'm snatching them up.

Edit: I'm an exceptional bastard when it comes to used games, because I always look through them because there's often a wrongly priced copy that they have to honor the pricing on. I got Bully: SE $10 cheaper and just a few days ago Mass Effect $8 cheaper because of the mistake. I was actually waiting before getting Mass Effect as I wanted to complete Bully, but when I saw a huge stack saying $33 and then in the bottom row one saying $25 I couldn't resist, especially considering Mass Effect used prices are going to start going up through this year with ME 2 coming out in the spring of 2010.

Does anyone have an idea on how to guess or find out how sales of a subscription based game would be affected by cuts in price, say from a baseline of $10/mo?

I've always thought that $10 is so little that the biggest barrier to paying is just the reluctance of getting out the credit card or the idea of paying at all, but maybe that's wrong.

Was there a drop in retail sails to compensate?

That's a pretty remarkable price elasticity of demand, and it kind of makes me wonder about the rationality of the purchasers. If a game costs $50, a 25% cut merely saves you $12.50 -- that is enough to more than double revenue? Odd.

It was a special case, as the "Left for Dead" sale was featured on major online social news outlets. So i think it is not at all representative for the general case. But the article contains data about the general case, and they are encouraging : 50 percent sale = 320 percent increase in sales.

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