Speaking during his keynote address at the annual DICE Summit, Valve Software President Gabe Newell revealed sales data from Steam which suggests that games may be too expensive.
Valve’s digital platform has given the company room to experiment with different price points. This is something which is difficult to do within the traditional retail model.
Steam sees a variety of price points attributed to different games, and then of course there are the daily specials, and weekly and weekend deals.
To illustrate his point that games may be too expensive, Newell gave the example of a recent Left 4 Dead promotion, in which the game was sold for half price, resulting in a sales increase of 3,000 percent.
“We sold more in revenue this last weekend than we did when we launched the product,” said Newell. “We were driving a huge uptick in revenue and attracting new customers.”
While people believe that we’re “screwing” retail, Newell showed that brick-and-mortar sales were unaffected by the online discount.
Another unspecified sale saw a third party game’s sales revenue skyrocket 18,000 percent over a weekend. Furthermore, following the weekend sale, baseline sales for the game increased 100 percent.
Newell also mentioned retail sales, whereby decreasing game prices by as little as 10 percent saw a 35% increase in revenue sales.
From this, Newell draws the conclusion that the industry is not pricing games correctly.
He believes that lower game prices would result in higher volumes and ultimately more revenue coming in.
Of course, it could also just be that people love sales, and it’s probably unrealistic to draw broader conclusions based on data extrapolated from discount sales.
Valve’s Gabe Newell: “Games may be too expensive” << Comments and views
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