Origin Boss Says Steam Sales "Cheapen Intellectual Property"

[EternalFacepalm]

I play on TF2 servers in the United States from the UK and get consistent 50-100ms ping. But BF3 is still a buggy mess as fas as I can tell.

Well, to be fair, those aren't really depending on Steam's servers at all, but rather on the individual hosts. BF3's netcode is what makes it a mess (that's no excuse, though), not its master server.

OT: Far Cry Complete went on a Steam sale recently, two games I've been enjoying immensely, and I will probably end up buying the sequel. And that's bad for the industry... how?

 

[acosn]

The 60$ price point doesn't work anymore.

 

[The Last Parade]

a lot of the things I buy on sales aren't things I would buy for full price, fuck that, if I want a game I'll either pay full price or I wont, steam sales just catch the people like me who wouldn't

 

[Triforceformer]

I wonder what would happen if with one big retailer, digital or otherwise, brand new AAA titles were sold at $30. Because $60 for one game is a steep price, and has no justification when digital. But if those $60 could buy two new AAA games, who knows what that could mean.

 

[sniddy_v1legacy]

To Summarize:
"We will beat Steam's reputation (long-term-relationship) by building a longer-term-relationship. But we won't do it by lowering prices, and I cannot tell you how."

LMAO and summing up the whole problem with this 'pitch'

They really have no idea do they - lets compete by offering a (perceived) worse service on a worse platform (origin vs steam) - with less products - and we'll charge more....

Take that 'business plan' to any bank and they'd laugh at you all the way back to the exit

 

[(name here)]

This article is the latest example of a running theme that major game companies have not the slightest clue that there is a difference between video games and physical products. Though the stuff they're saying indicates they don't really get physical products either.

Simply put, everything has an up-front cost to make it at all, and then a per-unit cost. Also, if you're doing certain types of mass production you add a hefty chunk to the upfront cost in exchange for the per-unit cost going down. You can't sell for less than the per-unit cost and make money for obvious reasons. The amount by which the price exceeds the per-unit cost is how much money each sale makes, so there's finite room to cut prices to make more sales before it becomes pointless.

But video games, unlike cars and appliances, have only a negligible per-unit cost. For Steam it's literally pocket change, but the physical copies don't cost all that much to make even with fancy box-art. You could shove a glossy full-color 100 page manual in, sell it for half the average video game price, and still make money per sale.

Now, it's not a free ride. Video games have massive up-front costs. In the days of physical copies, near-universal practice set the sale price at 50$ to make up for that. Why 50$? I have no idea, but it seemed to work. Valve, however, has found that they can sell many more copies by doing massive sales. And because of the miniscule per-unit price, selling 13 copies at 5$ instead of one at 60$ is unambiguously a win. I don't understand why that concept seems to be beyond EA's leadership.

 

[acosn]

Once upon a time it made sense to charge 50, 60, maybe even 70$ for a game because of legitimate supply issues (Nintendo's proprietary data storage that they insisted on using till the Gamecube comprised of flash memory cartridges that were not the greatest way to hold data, but were also time consuming and expensive enough to make that Nintendo had near-total control over what games got released on their consoles, and to what volume. While they'd eventually lose in court over it, unless you were using unlicensed cartridges you had to go through Nintendo) and the simple fact that the stuff Nintendo slapped on those silicon wafers was expensive.

Now you can buy ssd's that hold about 15 times what your average DVD holds for the same price.

While there are legitimate complaints from the Indie sector that Steam Sales are a two-bladed sword the reality is that for a company like EA it should be a wake up call, not a thing to whine about. The fact that Steam doesn't treat customers like second rate citizens isn't something to complain about.

 

[Zerstiren]

And what is a good profit range to EA? 30%? 60%? 130%?

 

[ResonanceSD]

Of course, Steam prices aren't exactly great either. I've stopped buying from them because they charge the same as retail, and give me less stuff. Imports FTW.

 

[fenrizz]

omg when's the last time this guy bought anything on Steam? it's always, always more expensive than a boxed copy. the only games that are cheap are indie titles that have no other real retail channel.

Really?

In my experience it's always cheaper to buy games of Steam, even when there is no sale.
I saved 100NKR (about 20$) on Deus Ex: Human Revolution for example.

 

[Starke]

Steam's method seems to be working quite well for the industry. Nobody is forcing publishers to sell their games there.
If EA wants people to buy games when they come out, they need to price games fairly and not just give all games the standard $50 price (and no game should start at $60).
Some "AAA" titles don't deserve more than $5, being fun but very short.

Random true story, there's a used bookstore chain around here that carries sealed software that's been ditched from retail. When I went in today I found stacks of Crysis 2, Mass Effect 2, Medal of Honor, and Dragon Age 2 with $5 stickers on them...

Where I'm going with this is, turns out that; that $60 price point? Yeah, more bullshit than I thought.

 

[Nydestroyer]

One thing I have found from sales more people will buy it and lets say that your friend tells you about how awesome said game is so you go to but it and the sales over most people will still buy the game eventually nothing like a boost in popularity to make a game sell better and the fact digital games cost nothing to sell (besides hosting costs) But meh most people know this already XD so many have said this in this topic already as well. <how you like that one period in the whole sentence grammar peeps?

 

[ACman]

If everybody buys games just because their cheap and not because their good,then yes that decreases value.

How? The value to the consumer is the same but the opportunity cost of buying is greatly decreased. Conversely the cost for the publisher to produce another unit is zero.

The supply curve is therefore a horizontal line and since games are a luxury we can assume that their demand is highly elastic. So the Supply/Demand curves look like this.

http://imgur.com/K6KBE

Say at $60 they sell 100,000 units.

If they do that wait till they've sold 100,000 units and then drop the price by about half, then on my rough graph:

http://imgur.com/ExbNh

It appears they sell another 100,000 units. So by doing that they make 9 million dollars instead of 6 million dollars.

Now like you've said this may change consumer expectation so the demand curve may change a little bit.

http://imgur.com/Fil30

Now it looks as if the only sell 66,000 units at $60 but they also sell 120,000 units at $30 so they still make 7,560,000 dollars

If you increase the number of steps down so say we start at $60 drop to 55, then 45, 30, 20 you make even more money.

As long as the amount that Steam recieves and the amount that the devs receive is always proportional I don't see the problem.

Also everybody waiting is not good for the dev´s who need money the moment their done with a game and not 5 months down the line.

Well that really depends on the contract that the developer has with their publisher.

 

[Neocavo]

Ive got both steam and origin on my computer and besides the intrusiveness of its reports and the lack of indie titles and sales i prefer origin, it seems to be more stable than steam as an application, downloading a new game is much better and their file servers generally handle the load better especially on launch day and unlike alot of people im not in denial about the fact i do play EA's games and i do like being able to get them easily. Ive spent over $300 on steam and roughly the same on origin and tbh, i have more steam games..but i play more origin games :/

that being said i am a little pissed that EA wont have many sales on origin, but im happy to not share the application with "i hate EA coz its the cool thing to do" sheep, it sounds almost like people who say 'fuck the police' just to sound hardcore.

 

[Epona]

This is exactly what we need to be doing - deflating the gaming industry. It's becoming big and bloated thanks to fuckpuppetry by EA, Activision and Ubisoft, all and one unfailingly clamoring for undeserved profit from the gullible fanbase they so shamelessly exploit.

Yeah, as a user earlier wrote, EA is so used to automatically having a monopoly over its competition that when it suddenly has that taken away (like right now with Origin vs. Steam) it just continues its poor customer service while twiddling its thumbs wondering why they haven't drove their competitors out of business yet.

When did EA have a Monopoly over it's competition? Steam has been around much longer than Origin.

 

[runic knight]

Well, that is a sign of a man in denial....or blatantly making bullshit up out of spit. You know, fox news levels of disingenuous claims and false information.

Most people are feed up with the price points on games now. It is too much for the drop in worth of a dollar and the rise of economic problems. But it seems to be the industry standard, so people have to get fewer games. This means new IP are not risked and only the same sequel crap is selling well. THIS is bad for the industry. How long can this go on til we only have a few powerhouse publishers with regurgitated AAA games? Anyone want more Madden syndrome? Stagnation and discontent with the customers is bad. How many people were bitching about the FPS deluge recently? Well, it is because of tactics like the pricing that makes fewer games profitable, so people try to copy what is actually making money. No chances are taken with new ideas. Look ar the variety of games back during the early 90's compared to today.

Steam fixes this. It lets indie games make money and reach a new audience. Sales means people will try newer franchises. And everyone makes money because of the miniscule cost to "make" a digital copy. It is nothing but good. It also helps because new publicity and word of mouth encourage buying sequels of those new franchises they discovered and since indie games can make money now, it helps prevent stagnation as they can take a risk to make the game knowing customers will be willing to part with a couple bucks to take a risk playing it.

So in terms of benefit for the industry, for companies, and for customers, there is NO side where EA is right on this. They cling to an old way and I hope, I really do, they die like the dinosaurs they are, taking their DRM supporting, crappy DLC money grubbing ways with them.

 

[pirateninj4]

So long as Steam sells cheap and good, Origin will always be the ugly duckling in that pond. I will always wait for AAA titles to come down in price before I even think about buying. Reason? I ain't made of money.

 

[DeadFOAM]

I think of it like this:
If its a game I really want, I'll buy it at launch. Only done this with a few recent games: Borderlands, Bulletstorm, Dead Rising 2: Off the Record, Skyrim. If I want it, but not as much, I'll wait for the price to go down. If its a cool looking game but not something I think would hold my attention for a long time, I'll pick it up on a Steam sale.

There are very few games at the moment that I believe are worth my full $60.

 

[Josh123914]

This is exactly what we need to be doing - deflating the gaming industry. It's becoming big and bloated thanks to fuckpuppetry by EA, Activision and Ubisoft, all and one unfailingly clamoring for undeserved profit from the gullible fanbase they so shamelessly exploit.

Yeah, as a user earlier wrote, EA is so used to automatically having a monopoly over its competition that when it suddenly has that taken away (like right now with Origin vs. Steam) it just continues its poor customer service while twiddling its thumbs wondering why they haven't drove their competitors out of business yet.

When did EA have a Monopoly over it's competition? Steam has been around much longer than Origin.

I'm talking about how they're are used to having monopolies over areas like football simulators and having significant pull in the world of game publishing, but they simply refuse to adopt a new strategy in their rivalry with Steam, my problem with Origin is that they've rolled it out as if Valve's already been beaten even though half of the harcore Steam users out there probably wouldn't touch Origin in the current state it's in.

 

[theAlfaBlade]

Here is a little story. In 2010 a game called mass effect 2 came out;everyone was clamoring about this new installment of mass effect which some called it sub pare (The first). Has a sane human being I didn't want to play a game which am not familiar about the universe or story, but a few weeks pass and mass effect 1 was on sale(and I had some extra bucks)so I bought it and after finishing the game I bought mass effect 2 and 3 at full price. Moral of the story=That's how you get a fan.