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Old 04-12-2012, 05:28 PM   #81
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I do understand that if I spend $60 for a game, I want it to give me $60 worth of content. That's damn hard for me. That's for the rare Just Cause 2, Skyrims and Amalurs of the world. But if I spend $12.50 on a game like Darkness II, I don't care if it's 5 hours long. The value is definitely higher. That's an impulse buy for sure. Games have never really been worth $60 to me.

Now, do I ever lament buying a game for a rock bottom price and realizing it was worth far more than that? It happens from time to time. But it makes me want to support the company that much more the next time. I never would have bought it at full price, however, so at least it's a sale of some kind.

With the used market out of the way on PC, this should all be moot. A sale is a sale. At least it's not piracy or a console game rental. Hell, I bet even pirates sometimes get swayed to download a game on sale, probably even if they own a stolen copy on their PCs.
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Old 04-12-2012, 06:19 PM   #82
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I just want to thank Secret Agent Dog for not only a well thought out post, but for also having an awesome avatar
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Old 04-12-2012, 06:28 PM   #83
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GOG is making a common economic point about informational asymmetry and price signalling.

The short version of the economic theory (which got a few guys free trips to Stockholm) is that sometimes the customer cannot tell how good a product is until he buys it. Entertainment, including games, are a good example: while I know exactly how much pleasure I would get out of a Coca-Cola, or a meal at my favorite restaurant, I don't necessarily know how much enjoyment I'm going to get from (say) Mass Effect 3. The best way to find out is to buy the game and play it, but if I hate the game, I'm going to regret wasting my money on it. We've all done that.

Wary of wasting our money on crappy games, we consumers use various techniques to try to determine the quality of a game before we buy it. Reviews, demos, and sites like this one all exist to try to combat the "I don't want to waste my money on a game that turns out to be crappy" problem. They are all also flawed techniques: I'm sure you've bought a game that got good reviews or had an awesome demo, but you quickly grew bored with it and didn't really get your money's worth.

Another technique people often use is signalling. There's all sorts of ways in which a product can signal its quality: McDonald's spends a shitload of money on advertising, for example, to remind you that it's the sort of company that can spend a shitload of money on advertising and therefore it must have something going for it, right? High price is also a way to signal quality: generally speaking, if I see two games on Steam that I haven't heard anything about, I'm going to assume the $60 game probably had higher production values than the $10 game. Moreover, a game that was retailing for $60 but has now been slashed to $10 is, all other things being equal, probably a bug-ridden mess. There are a lot of exceptions to this rule, but customers use price signalling as a guide to quality in very many products.

Now, that's not to say that Steam shouldn't slash prices to sell more games. But big obvious price cuts usually signal to customers that there's a reason for a big obvious price cut. Most customers, not being complete morons, tend to assume (pending other information) that there's a reason a game released three months ago is now selling at a 75% discount. And indeed, I think you'll tend to find that Steam tends to have a much more aggressive pricing strategy for some games than others. That strategy is somewhat (albeit not perfectly) correlated with quality and popularity. Frankly, a game that starts off at $15 and continues to be offered at that price tends (ceteris paribus) to be better than the $60 that gets slashed to $15 a month after release.
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Old 04-12-2012, 06:33 PM   #84
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gog is forgetting the dlc factor, by selling a game for dirt cheap that has dlc, you are creating a larger market to sell said dlc. A great example is that amazon sale going on right now, you can get dawn of war 2 retribution for like 7.50$ but they also have a discounted EVERYthing dlc pack for 30$. You can treat the initial game sale as the "loss leader" and upsell them on DLC or expansion packs. This is similar to how free 2 play mmos work now and it seems to be working well for them.
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Old 04-12-2012, 06:55 PM   #85
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I tend to agree with the idea that vast cuts in the price of a game cheapens gamers' impression of that game. Also, more gamers are waiting for sales instead of buying games day one. But that is hardly just a Steam phenomenon. As for whether it's a bad thing overall, I'm not sure but am leaning towards no.
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Old 04-12-2012, 06:58 PM   #86
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We're also starting to see more games release below the $60 price point, which is a good thing. Not everything needs to be $60.
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Old 04-12-2012, 07:00 PM   #87
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Taking the idea that some of these games that are getting sales after being full price for awhile, the price cuts are mostly a way to get more sales out of old games that aren't getting many sales(also water is wet). So it's a nice way for Steam and the publisher to get a nice boost of money. That they wouldn't get otherwise.
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Old 04-12-2012, 10:29 PM   #88
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Taking the idea that some of these games that are getting sales after being full price for awhile, the price cuts are mostly a way to get more sales out of old games that aren't getting many sales(also water is wet). So it's a nice way for Steam and the publisher to get a nice boost of money. That they wouldn't get otherwise.
Exactly, and this is the exact price structure of most media. Go see a film when it comes out for $10 or rent it for $2 from Redbox. Buy the hard cover version of a book for $25 or wait for the $10 paperback. Even physical copies of games follow this model through "greatest hits" editions.

The difference is that digital products don't require additional production runs and limited supply. So they can sell more at cheaper prices.

Every now and then there is a newish game at deep discount during a Steam sale but it is a rarity and, as Ox indicates there is usually a reason for it.

Most of these $5 games are games whose initial production run has long since past. It also serves as a good way to get new potential customers for upcoming sequels, as Kel indicates. And both the IOS and Steam research indicates that ga,Ed typically continue to sell well even after the discount period is over. The benefits for both consumers and producers seem outweigh the downsides.

I don't think anyone who buys Black Ops for $10 is suddenly less likely to buy the sequel for $60. In fact, chances are they are MORE likely to do so.
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Old 04-12-2012, 10:47 PM   #89
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Personally I don't see either as super competitors, honestly. GoG Has freebies. Steam has sales.

I simply decide which I'd rather have.
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Old 04-13-2012, 04:05 AM   #90
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I realize the analogy isn't perfect, and I almost didn't post it, but I guess my point is, tough cookies that these guys can't sell games at the price point they'd like when competition is killing them.

Edit: As a connoisseur of video games, I perhaps should not take such a brazen attitude! It would suck if the AAA game became a thing of the past because indie competition made it nonviable in all cases.
Except it's not competition! VVVVVV is a fantastic twitch puzzler that looks like a platformer, and Rayman is the true vision of those Disney games on the Genesis realized.

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Actually it didn't, after some good word of mouth it became successful and they've announced a sequel. More than a little bit of it's initial failure could be blamed on the general shitty quality of Rayman for some time now. Ubisoft turned the property into shovelware, and is then surprised when people treat it as shovelware?
All I found was an announcement on an investor call about the game being profitable despite mediocre sales, that they expect it to have a long tail and how the success of the Just Dance games has compensated for the loss presented by Rayman and Tintin. There was no mention of a sequel. Regardless, the game gained traction after it dropped in price. Here is a game with equal production values and more content that Generic Shooter 3: Military Porn, yet it is not considered worth it. Don't expect any other publisher to shell out this kind of money to develop a whole new engine for a 2D platformer.

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No, but Rayman and New Super Mario Bros Wii are, and New Super Mario Bros Wii did just fine despite being a full priced game. Granted, that was 2009, but do you really want to suggest that the next game in that series won't succeed?

Rayman Origins doesn't have the name recognition to pull in full price, especially given that the other recent entries in the series have been either minigame collections or just bad games. So it didn't. Did it "deserve" to? Arguably. But nobody outside of Ubisoft realistically expected it to.

You can't charge full price for a point and click adventure game these days either, unless you're famous and have tons of nostalgia cred to get a Kickstarter going, which is why nobody does and nobody will fund anybody to. Steam sales are not to blame for shifts in genre popularity.
Considering they released teh same day as a new Mario and Zelda game, I doubt Ubisoft wanted it to succeed. Nintendo has cultivated brand loyalty that most companies can never hope to reproduce, and it has very little to do with consistent quality. Look at Mario Party. And it has nothing to do with the genre popularity. There are hundreds of platformers on Ios, Android, XBLA, PSN and Steam, which would suggest the genre is quite popular. Your example of Adventure games actually proves my point; People don't think adventure games have a lot of value, so nobody makes high-value Adventure games.

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GOG is making a common economic point about informational asymmetry and price signalling.

The short version of the economic theory (which got a few guys free trips to Stockholm) is that sometimes the customer cannot tell how good a product is until he buys it. Entertainment, including games, are a good example: while I know exactly how much pleasure I would get out of a Coca-Cola, or a meal at my favorite restaurant, I don't necessarily know how much enjoyment I'm going to get from (say) Mass Effect 3. The best way to find out is to buy the game and play it, but if I hate the game, I'm going to regret wasting my money on it. We've all done that.

Wary of wasting our money on crappy games, we consumers use various techniques to try to determine the quality of a game before we buy it. Reviews, demos, and sites like this one all exist to try to combat the "I don't want to waste my money on a game that turns out to be crappy" problem. They are all also flawed techniques: I'm sure you've bought a game that got good reviews or had an awesome demo, but you quickly grew bored with it and didn't really get your money's worth.

Another technique people often use is signalling. There's all sorts of ways in which a product can signal its quality: McDonald's spends a shitload of money on advertising, for example, to remind you that it's the sort of company that can spend a shitload of money on advertising and therefore it must have something going for it, right? High price is also a way to signal quality: generally speaking, if I see two games on Steam that I haven't heard anything about, I'm going to assume the $60 game probably had higher production values than the $10 game. Moreover, a game that was retailing for $60 but has now been slashed to $10 is, all other things being equal, probably a bug-ridden mess. There are a lot of exceptions to this rule, but customers use price signalling as a guide to quality in very many products.

Now, that's not to say that Steam shouldn't slash prices to sell more games. But big obvious price cuts usually signal to customers that there's a reason for a big obvious price cut. Most customers, not being complete morons, tend to assume (pending other information) that there's a reason a game released three months ago is now selling at a 75% discount. And indeed, I think you'll tend to find that Steam tends to have a much more aggressive pricing strategy for some games than others. That strategy is somewhat (albeit not perfectly) correlated with quality and popularity. Frankly, a game that starts off at $15 and continues to be offered at that price tends (ceteris paribus) to be better than the $60 that gets slashed to $15 a month after release.
Again, this is the first time people are actually paying for content directly, and not for the packaging, so this issue was bound to come up. How do you price something in a post-scarcity environment?
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Old 04-13-2012, 05:36 AM   #91
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@Narradisall - Not sure what you mean with Netflix.
Ah, forgot it was Gamefly for the game rental service model. Thanks for the answer though, was just curious if those things factored in at all but you already took them into account. Thanks.
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Old 04-13-2012, 12:04 PM   #92
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Another technique people often use is signalling. There's all sorts of ways in which a product can signal its quality: McDonald's spends a shitload of money on advertising, for example, to remind you that it's the sort of company that can spend a shitload of money on advertising and therefore it must have something going for it, right? High price is also a way to signal quality: generally speaking, if I see two games on Steam that I haven't heard anything about, I'm going to assume the $60 game probably had higher production values than the $10 game. Moreover, a game that was retailing for $60 but has now been slashed to $10 is, all other things being equal, probably a bug-ridden mess. There are a lot of exceptions to this rule, but customers use price signalling as a guide to quality in very many products.

Now, that's not to say that Steam shouldn't slash prices to sell more games. But big obvious price cuts usually signal to customers that there's a reason for a big obvious price cut. Most customers, not being complete morons, tend to assume (pending other information) that there's a reason a game released three months ago is now selling at a 75% discount. And indeed, I think you'll tend to find that Steam tends to have a much more aggressive pricing strategy for some games than others. That strategy is somewhat (albeit not perfectly) correlated with quality and popularity. Frankly, a game that starts off at $15 and continues to be offered at that price tends (ceteris paribus) to be better than the $60 that gets slashed to $15 a month after release.
This is a detailed, astute description of GOG's position on price-signaling; however, I don't think any of us are saying that price-signaling doesn't exist, but that GOG is incorrect when they say:
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Of course you make thousands and thousands of sales of a game when itís that cheap, but youíre damaging the long-term value of your brand because people will just wait for the next insane sale.
The truth is that entertainment media's value wilts quickly. This is true of books (to a lesser degree), movies, and games. A best-seller hardback that was $30 when it released, will cost $5 in a used book store a year after it releases, a DVD for an Oscar winning movie will be $5 in a bargain bin a few years after it's release. Video games are even more disposable as the technology is so new that it cycles every few years and older games require older equipment most people don't bother to keep.

Most games expect to sell 50-70% of all the copies they'll ever sell within the first 3 weeks after their release with the majority of that 50-70% sold the first 3 days. So when a game is six month's old, they really don't expect much more income from it at all. Being able to get ANYTHING more instead of people playing their game by borrowing it, buying it used, or renting it is extra money in the bank.

This isn't a new idea. Movies have $1 movie theaters for older films that got pushed out of the higher-priced theaters by newer, hotter titles. They're then sold as pay-per-view titles for a while, and then finally make their way out to DVD and movie channels. Each time, they make more money for the film-makers and widen the audience so that the IP is broader.

The big difference here is that Steam doesn't have a different "location" for each type of sale of the same product like films do. You get your big-budget Day One sale there, and then six months later, you can get it half-off. 2 years later, you might see it for $10 as a bullet-point item for a sale that is trying to get you to buy it along with the sequel that's been out for 3 months, but now only costs $40.

Game companies know what they are doing. They want as much money as they can get and they want us playing their games and falling in love with their IPs.

Speaking of which, I want No One Lives Forever 3.
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Old 04-13-2012, 03:11 PM   #93
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This article seems potentially pertinent to the discussion.

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Why do people buy used games? Because they cost less money. Why do people sell their used games? Because they’d rather have money than the game. The number one reason, in that 2008 survey, why gamers traded in games was “The game is not very good.”

Games cost too much: Players don’t feel that it is a good value to pay $60 for a game and then immediately be hit with an additional $10-20 charge for the rest of the content.

Games cost too much: The popularity of used videogames simply indicates that players are seeking to mitigate those costs from both ends, by buying low-cost used games and/or selling games back for store credit.

Games cost too much: Gamers are dumping more of their money and time into smartphones and tablets, where games cost a dollar or free and are getting more and more entertaining by the day.

Games cost too much: Gamers are happy to pay $60 and up for the best-in-class experiences like Call of Duty or Skyrim, but they don’t have to pay $60 for B-games anymore. Let alone $90.

Games cost too much, and there are plenty of game publishers that are doing something about it. The ones who aren’t will just keep losing their customers.
On the PC, "Steam Sale" can easily be subbed in for "used game" above in most cases, except that in a Steam Sale the people who put out the game get a shitload of money. So, you know, that seems better.

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Speaking of which, I want No One Lives Forever 3.
YESSSSSSSSSSSSSS.
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Old 04-13-2012, 11:41 PM   #94
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Old 04-16-2012, 08:25 AM   #95
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PA Report on the topic.
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Old 04-16-2012, 09:43 AM   #96
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“Everyone has a queue in their head and a queue on their hard drive, and for most games, sales aren’t even a way to make sure your game gets played; they’re a way to move your game from a gamer’s mental queue to their hard drive queue,” Ambrogi said “It could still, without hyperbole, be years before that person actually downloads/installs/plays your game.”
Wow. I'd never thought about it that way, but in the age of Steam this is definitely how I've acted for the last couple years, which is a big departure from how I used to buy games.
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Old 04-16-2012, 10:28 AM   #97
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That is absolutely the truth in my experience. I don't think I've installed even half the games I've bought through Steam and GOG but they're there just waiting for me.
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Old 04-16-2012, 10:37 AM   #98
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There's a lot of stuff in that article that's already been said in this thread, so it's no surprise I like it a lot. Ben Kuchera's a smart guy.

But honestly, that mental queue vs hard drive queue paradigm is the way we already buy most media, isn't it? Who hasn't bought a cheap DVD knowing they won't watch it right away, and maybe it sits there for a year before you get around to it but so what? It'll be there when you want it.

I guarantee I've bought a hundred books over the course of my adult life that I haven't read yet or have only skimmed the pages of, and I'm fine with that. Maybe I'll get around to them, maybe I won't - I liked something about them at the time that I bought them, and the price was low enough that my investment didn't demand immediate return.

In some ways, models like Netflix / Gamefly even further blur the line, because they essentially allow EVERYTHING to be in your "hard drive queue" so long as you keep paying the monthly fee, it's just a question of what you pull to the front based on your interest at the time.

I'm perfectly comfortable with games living in that space, and the only aspect of them that doesn't work well with it is the multiplayer aspect, for games that focus on that primarily or exclusively (since they require a large audience to synchronize their consumption of the media).
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Old 04-16-2012, 11:04 AM   #99
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GoG knows the price of everything and the value of nothing.

They're digging pretty deep to find something "bad" about the competition, lol.
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Old 04-16-2012, 11:08 AM   #100
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But honestly, that mental queue vs hard drive queue paradigm is the way we already buy most media, isn't it? Who hasn't bought a cheap DVD knowing they won't watch it right away, and maybe it sits there for a year before you get around to it but so what? It'll be there when you want it.
I never really did that before Steam, especially with physical media. I only really bought DVDs for movies I've already seen, either in the theater or renting. With books and physical games I'd read/play them pretty soon after getting them.

If Steam shipped physical copies of every game to your house I doubt I'd have bought as many games on sale. Having that huge stack looming over me would prevent me from splurging on other titles. My physical media queue was rarely more than 3-4 untouched titles. In Steam it's dozens.
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