Steam raking in cash with direct game sales
Gaming portal Steam is making wade of cash by copying content delivery models more traditionally used by software pirates, according to head steamer Gabe Newell. In his keynote speach at the Dice Summit, the Valve boss said that direct download services closed the distance between game creators and their audience and reduced losses to pirates. Unlike DRM copy protection that encouraged piracy, he added. Steam had created a succesful and lucrative business by working out that people who resorted to piracy did so mostly because traditional retailers were not serving them well. Newell said that the old way of reaching punters was dead and that Steam was trying to touch its customers every three weeks rather than every three months when a new game is released.
The service, which now has 20 milion registered users, has partnerships with every major PC game publisher and offers full game downloads as well additional content and services for more than 350 of the top PC games currently available. Where Steam makes its cash, is that each successive major update or special offer creates sales spikes for the original titles as new players are tempted on board. Every time a new update is announced for Team Fortress 2, sales of the original game spike by at least 100 per cent and Steam registrations have been known to go up by 71 per cent. And a recent half-price offer on Left 4 Dead led to an eye-watering 3,000 per cent uptake in sales. Any game exec out there who is pondering whether games are too expensive would be well placed taking a leaf out of Steam’s pricing policy. Newel reckons that the company has seen sales increase by 35 per cent with price cuts as small as ten per cent, whilst a 25 per cent cut can see the number of units shifted increase by 245 per cent.
Source: Inquirer
Comments(37)
yeah… but you still gotta pay
STEAM is awesome. The only reason why i still buy PC games and also the only place where i buy em.
So if a dev wants to make money off of me, RELEASE IT ON STEAM!
My 2 cents
I really like Steam, but I'm careful not to have too many games in one account, because they DO get hacked
is GTA 4: Lost & Damned ( and Fallout 3: Operation Anchorage ) for the 360 gonna get ripped and released for download ?
or is it marketplace only and not possible to put it on disc and use like demos
Steam is a bad idea for people who have caps on their internet usage. 6GBs+ for a game is a lot when you have 60GBs limit a month heh.
Steam prices for Europe are way over priced now and have been for a while. UK – Dow 2 on Steam £34.99, Dow 2 from retail £22.99.
Unless it's a valve game or something that's on offer I don't buy anything from steam anymore.
Steam is DRM, too.
If/when the servers shut down, you're SOL. Also, you can't sell used games.
I'm rather for a really DRM free approach as with Sins of a Solar Empire.
Steam is stupid.
Most people do not have internet connection, because they do not want it, or they are on dial-up. Then we have monthly cap on some ISP.
Next are viruses that are mainly on internet, and can, as happened to me, damage all exe files(new virus there was no antivir definition for it). Then you have to download game again, if not burned on some DVDs before that.
Now we have games that are not below 6GB.
That is why retail DVDs are the best.
Dropping the price of games would not see that same increase though, it's the "sale" mentality that causes it, a well known psychology in retail, any drop in price will see a temporary spike in sales, but that will not sustain itself.
Simply put you'd make more money as a business with a model of Fullprice -> quick sale price -> full(or near full) price again -> quick sale price than you would fullprice -> price drop, which is the traditional method for console games (aka full price, then game of the year/platinum/classics).
So you have say 50 -> 25 -> 40 -> 20 -> 30 pricing over a period, with the sales only lasting a fraction of the time.
Rather than 50 -> 25 (6 months later)
Stores might have sales, but publishers don't, developers don't.
Steam on the other hand allows publishers to be flexible with the price, and while others might be slow to catch on steam is showing them that it's a method that works.
Steam even allows for all kinds of sale tactics that might not be possible in the traditional physical distribution method (or at least not to the same degree of flexibility), selling one game at 0 profit to generate intrest in the expac/sequel, selling "developer packs".
One method I'd implement if I was working at steam would be a chain discount method.
As in buy game 1, get a discount on game 2, buy game 2 and get a discount on game 3.
Buy game 1 and 2 and 3 (with the discounts) get game 4 for free.
Buy game 3 and 4 and get 1 and 2 for free.
I'd also start offering rentals that have you eventually owning the game.
Say $5 for a week of play on steam, and once you've paid the cost of the game, it's yours to keep.
Rentals are a fairly massive source of income for console systems that are pretty much lost in the PC due to anti-piracy DRM, serials, and other such things – steam on the other hand would not face those issues.
P.S. if your steam account gets hacked, it's fairly simple to get it back fully restored, it just takes a bit of tie for Valve to make sure it really belonged to you.
Warhammer.40.000.Dawn.of.War.II-ViTALiTY
in ur face, steam!
I downloaded GTA and Fear 2 from steam and they both work perfectly, they offer a really good service. Just waiting for street fighter 4 now
best thing is, if you bought a game you can download it again and again even after years.
"Most people do not have internet connection, because they do not want it, or they are on dial-up. Then we have monthly cap on some ISP."
———————–
I'm going to have to call BS on that, most GAMERS have broadband, not dialup, and even a low monthly cap is more than enough to game 24/7 for that month, games don't use that much bandwidth.
Also, you don't have to redownload an entire game if one bit becomes infected/corrupted – you just delete that file and steam will fix it (verify integrity via properties).
Steam lets you backup your games if you like (DVD-Rs are cheap and harddrives are very cheap for many gigs) – anyone with a gaming rig should be able to back them up.
Anyone without a gaming rig will only be using steam for popcap games/old games and need not care about any of that.
There are advantages to buying a physical copy (I bought GTA4 physically because of the sheer size and I wanted the map + manual), and I'd agree that a nice addition to steams service would be a get it on disk service, maybe for a additional cost to get a "steam" retail copy (as in with a cd-key that works on steam).
Then again we're starting to see deals with game Devs to get retail copies working on steam anyway (like with Dawn of War 2).
Make things affordable and more people will be willing to pay.
I think that's been proven with Steam's 3000% increase in sales of L4D over the weekend where it was half price.
I know I was one of those people who didn't purchase the game based on reviews which said it didn't have much replay value. When they offered it for half price, I picked it up anyway.
i think they should just start making games on a new medium if they want to get dvd's to not be as easily copyable. a type of usb key that holds the whole game or contains your gaming profile so you can download the games to the system with the usb key in.
Steam is fine! Its just bad for ripping games , its possible but its annoying with the Launchers and stuff like that. And thats why so mouch are hating Steam.
Steam is awesome , you just download the game and play it, you dont even have to install it , it just downloads it and you can start to play it. You dont have to download patches, steam downloads the patches automatically.
Since I use steam I buy some games… sometimes… I didn't do that before. So there you go, good results for steam.
.
But now, things have changed
Steam prices in Europe went up with the stupid thinking of 1$=1€.
So now, boycott.
Steam is a nice platform and I bought a few games from it (world of goo / half life for 1$).
The problem is that they are overpriced! Can usually get a retail box from play.com cheaper then I can buy it through steam. And with a fancy box.
Their suppliers probably demand that they are not priced cheaper then retail boxes to prevent teir retail boxes from selling. But as long as they do not put their online sales 10% cheaper then a retail box, I see no reason why I should use it.
"Any game exec out there who is pondering whether games are too expensive would be well placed taking a leaf out of Steam’s pricing policy."
Warhammer 40k 2:
-> Steam: €49.99
-> Play.com: €29.99
Fair prices my ass.
I still buy Retail and always will, don't like Steam that much for its sloooow loadings, takes forever to launch a Game or even login into Steam everytime, doesn't make sense and my PC is top notch!
Steam is awesome.
Completly grabbed the market at a crucial point in PC game marketing …
The release of Half life 2 & Counter Strike Source
75% of gamers start off someway or another playing these games and although there are other options of playing these games other than using steam if you want to play properly youre going to have to buy the game via steam.
Ker-Ching….
Steam realises people are happy to pay for awesome multiplayer games and while there selling those lets sell some PC Single player games.. ANY single player game sold on PC has got to be considered a break through people have become used to the platform of steam and just buy it because they dont know better(or havent heard of rlslog)
I personally love steam but continue to download games to 'test' them if there a good multiplayer game I buy it and am happy to do so.
Paying for a single player game though… A hangable offence.
Counter-strike Source. Team Fortress 2. Left 4 dead … Are fricken awesome and wouldnt be a success without steam.
Booyah!
Warhammer 40k 2:
-> Steam: €49.99
-> Play.com: €29.99
-> Warhammer 40.000 Dawn of War II-ViTALiTY : €0.00
i don't understand, are you guys actually against piracy?
When GTAIV got released, all early problems with copy protection made me buy it on Steam. I was basically too lazy to go to a shop and buy a boxed version and don't really care that much about additional content.
Man, the download was sooooo slow in comparison to my usual Usenet speed. The whole download averaged ~800 KB/s – more than 3 times slower (at least for me) than getting pirated copies off usenet. Took few hours to download, would have been quicker just to go and buy the damn thing in a shop.
I know that GTAIV is an exception due to its enormous size, but I wasn't impressed at all…
I love Steam, it's easy and fast (I max my 10mbit connection 95% of the time on it), I often find really cool games on sale that I wouldn't even have known about otherwise.
Gets two thumbs up from me.
No you are stupid
@ Alexander
February 20th, 2009 | 15:15
If you dont have internet connection or dial-up then you arent going to bother with this site either.
Having started with dialup internet, i used to spend the same ammount of money per month as i do now, ISP cap -> considering changing ISP.
And viruses, mmm, no chance you got them from steam, get a better anti-spy, firewall, anti-virus software.
Everything I get from here and other sites I scan. Never have any problems.
Steam FTW I've used it since day one, never a problem. great legit games, and you didn't have to go to the store or pay shipping
wow, people here have no concept at all of where their favorite games come from. If you never buy any games, then you'll never provide an incentive for someone to make games.
If you keep pirating every single game, then you'll bring down the PC gaming industry. At least support the companies you like!
@anon
It's pretty much well known that pirates spend more on media than none pirates, because you know, most of us pirates are gamers, we want to play every game we can, but most of us just can't afford to buy them all – especially if they are a play once, throw away game – what on consoles would be a rental, but on PCs thanks to DRM and serials is a buy/pirate option.
Fear 2 for example, it's a finish in a weekend game, never play again (except for the minority who enjoy the online play of it).
DoW2 is the same if you're not into the multiplayer – 1 weekend worth of game.
On a console, you'd rent that – especially if you use something like lovefilm (subscription based rental).
Steam is awesome! I always buy games off there especially the weekend deals. Obvioulsy dont buy the new relaeases that cost a fortune but the bundles are good deals. Download to a partition and never have to re-download again.
@ Monstri
I buy the games that I actually want to play to support the devs.
No money, no games, no games to pirate, easy as that.
Steam is the Best
@We do fool: I also pirate games. And I also pirated FEAR 2 and beat it in a single weekend. And, funny thing, I just started the download on Dawn of War II. But I do buy games. Only the ones I like.
But they include multiplayer AND single player games. Because I support the companies I like. Companies who consistently produce great games. I just can't stand people who pirate games THEY DO LIKE and CAN AFFORD.
I really like Steam. Up until they changed the prices ($1=1€) it was, in my opinion, the best legal way of buying games online at a decent price.
What I really liked was that they gave small independent devs a nice opportunity to publish their games. (For example Audiosurf; priced at about $9. Steam took a small fee of 10% for hosting it, the rest went to the dev.)
Now with the new prices I've stopped using it altogether.
For Norwegians like myself the prices went up from 6 NOK(=$1) to 10 NOK(=1€).
I'm not using Steam again until they revert back to $ only, or lower the € prices accordingly!
"Unlike DRM copy protection that encouraged piracy, he added."
Sorry, but Steam IS DRM. It is also terrible and there are quite a few problems with it. I will never, nor have ever, support/ed Steam.
I'd have to agree with some peoples point that paying for single player games isn't worth it; you beat them and you never pick up the game again. PC rentals would change the industry. I am willing to fork over the $5 or $10 bucks to rent a game but making me pay $50 for something i'll use once, a hooker seems like a better investment.
And for those people who are complaining about the Steam Prices being too expensive, you have to acknowledge some things.
-First off, Steam is an American based Company. Meaning its running on the dollar. If I was to buy warhammer II now its going cost me $50 not €50. Gotta convert that. If you still going to say Steam is more expensive than Play.com look at the value of the Pound to the dollar over the past 3 quarters. It has devalued by %27. If it ever goes back to where it was last summer games sold on the pound will be at least 1.3 times the price on play.com or any retailer using the pound compared to Steam
-Second, Steam is A BUSINESS. And more importantly not the only one. They may have better prices for most games because they scored great deals with producers but its not always the case. Some producers might choose to go with a different distributor and its up to them.
As a 4-year steam user and a big PC gaming scene fan, I have to rate them an A+. Even though they didn't start with a mind raveling concept, they took it to a new level providing excellent service. I plan on using steam for years to come and hope they will continue with the great service.
steam should sell films + music they would make an even bigger packet, id buy it off there, the only reason i dont buy films n music anymore is the fact my only store that sells it has shut RIP wollies… gonna miss that sheep
bahhhhhhh
Unless Steam is adding a 100% proof age verification, german customers won't be able to get uncencored content at all. So me, being over the age of 18 living in germany, has no reason to support their way of distributing games at all as long as they don't change that issue.