

Valve: Are games too expensive? - william42
http://www.next-gen.biz/features/valve-are-games-too-expensive

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martinkallstrom
That's impressive, BUT there are a couple of hidden variables in these stats:

 _Those that discounted their games by 10 percent saw a 35% uptick in sales--
that's dollars, not units. A 25 percent discount meant a 245 percent increase
in sales. Dropping the price by 50 percent meant a sales increase of 320
percent. And a 75 percent decrease in the price point generated a 1,470
percent increase in sales._

Namely,

1) There could be a strong correlation between previous sales and the discount
publishers chose. Titles with very low sales might have been given a heavy
discount, which means that the impressive percentage wise uptake for titles
discounted 75% amount to low absolute sales figures.

2) There is no account of how the products were marketed during the campaign.
If the heavily discounted titles went from low sales and almost zero
visibility, to being splashed all over the front page, the price point would
not be the explanation of the sales figures.

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Lewisham
FYI: This article is from early 2009. The industry has moved a lot since then.
Game prices on Steam are now much more flexible, although console game prices
have remained steady (even in the face of stiff competition: a single 3DS game
costs $40, which will buy you 40 great iOS games).

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bluedanieru
That's not an entirely fair comparison though: digital distribution where the
cost per unit is virtually zero vs. costly ROM modules.

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Lewisham
It's Nintendo's decision to create a system that requires such modules, and
cause games to be priced accordingly.

It isn't like they haven't had five years notice on portable digital
distribution.

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bluedanieru
Providing enough storage on the device itself for the kind of games you expect
on a system like the 3DS might not be feasible. Ideally I'd like to purchase a
few flash cartridges and write games I've purchased to them as I see fit, from
the market app they've got on there now. There is definitely room for
improvement.

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dazzawazza
In Japan in the 90's Nintendo had ROM burning booths installed in Japanese
malls. Kids could write games to a cartridge for the equivalent of a few
dollars. It was a huge success. Unfortunately I can't remember the name of it.

When looking at the Nintendo eco system you really need to remember that
Nintendo primarily make a system to play Mario, Zelda and Pokémon on. They
want a robust system. Cartridges, despite their inherent costs, offer child
friendly, robust distribution that limits returns, copying and maximises their
revenue.

Having said that I can't see them continuing with cartridges for much longer
as their cash cow is being decimated by cheaper devices.

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JanezStupar
70€ for 10 hours of content of mediocre quality? Pass.

I mostly play multi player games nowadays with an occasional big content
single player game. I only buy some multi player games upon release and mostly
wait for single player games to become heavily discounted. This enables me to
leverage the gathered information to buy classics at an acceptable price.

It's not that I cannot afford to pay the price. It just seems obscene and with
all the supply of entertainment that is available today, I reckon there is
really no need to pay such ludicrous rates.

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lionyo
I expect Steam games to go on sale often and don't buy until they drop below
my $25 threshold. Since their sales (revenues) are increasing, that means I'm
not as cheap as I thought...

However, the problem with playing with your pricing is the same reason why
airlines don't massively discount unfilled seats.

Since the fuel is already paid for, why not discount those seats and make
money? It's because people will expect the price to always be discounted near
the end, ultimately leading to lower revenue.

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sliverstorm
If the results are legitimate and the market shifts, something like this could
be a big deal. If these results could be applied across the industry...
tripling the revenue of an entire industry could stimulate incredible changes.

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rsanchez1
Yes, games are too expensive. I can't understand why RAGE, just released a few
days ago, would cost $60 on Steam. You can sort-of get away with it when you
sell at brick-and-mortar stores, but digital distribution should cut the costs
dramatically. Instead, you have to pay $60 to get a game on digital
distribution when it comes out. That's why I wait for Steam sales.
Occasionally great games that came out a year ago are on sale for a reasonable
price.

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fondue
Get out of my head!

I had also planned on buying RAGE but at $60, forget it! I know it will be
discounted, maybe around Xmas, so why pay that much?

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wavephorm

      The conclusion: The games industry is not pricing its products correctly.
    

Or it could mean that having a sale increases the number of sales.

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knowtheory
Right, did you miss the bit about sales producing a sustained boost to rate of
units sold even after the sales end?

