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<\/p>\nSpeaking 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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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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.<\/p>\n
“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.”<\/p>\n
While people believe that we’re “screwing” retail, Newell showed that brick-and-mortar sales were unaffected by the online discount.<\/p>\n
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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.<\/p>\n
Newell also mentioned retail sales, whereby decreasing game prices by as little as 10 percent saw a 35% increase in revenue sales.<\/p>\n
From this, Newell draws the conclusion that the industry is not pricing games correctly.<\/p>\n
He believes that lower game prices would result in higher volumes and ultimately more revenue coming in.<\/p>\n
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.<\/p>\n