Origin Boss Says Steam Sales "Cheapen Intellectual Property"

[Vivi22]

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

Except you can't prove either of those statements, and Valve has probably got a lot more data to pull from than you to decisively evaluate whether or not those sales work, or if they just cannibalize new sales.

But hey, you clearly know more than the big company who's dominating the PC games market with your no evidence to refute their detailed statistics and business plan. So clearly what they do is bad for the industry.

 

[Sir Boss]

so, let me get this straight EA, you'd rather Steam gets what little money I can afford to spend on games... I understand and will comply with your wishes.
How is this even close to good business practice?

 

[Callate]

Firstly, F@$% you, Mr. DeMartini.

Secondly, my experience is that allowing a top-down control of prices leads to an unrealistic over-valuing of the properties. This is doubly the case in the matter of the digital world, where innovation moves quickly and five or six months brings an entirely new wave of software, leaving the hot titles of yesterday in the dustbin. Far from devaluing older titles, reduced prices on older titles like those seen in Steam sales may be the only thing that allows the franchise-only thinking of big names like EA and Activision to have some degree of success, giving otherwise leery gamers reason to try titles within their limited budget and perhaps see that there's some merit to those games beyond the ridiculous hype that goes hand in hand with initial releases.

By way of contrast, I've noted that all the GameStops in my area seem to insist on pricing all their Mario-related used DS games at around the $25 mark, probably in part because they still insist on selling the new versions at the $30 mark. This may in part be because of pressure from the big N... but it also means I've seen five or six copies of some of these games collecting dust, unsold, behind the counter. I would happily buy some of these games if they were allowed to naturally devalue like all the other games on the shelf (Super Mario 64 DS is now seven years old), but at the $25 point I can buy two or three other perfectly good games, so what are the chances I'm going to shell out for Mario instead?

Gee, news flash... Companies like bigwig EA love market dynamics right up until they bite them in the ass.

Which brings me to:

Thirdly, Steam is not going to go away, so you've just announced to the world that your biggest competitor's strongest point is going to remain their strongest point, you yield all ground on that issue. In return for which, you're offering...

(*crickets*)

I'm a little surprised your stockholders aren't ready to tear you a new one for this.

Basically, you're banking everything on the colossally arrogant assumption that EA's games are so good, they're worth every damn thing you've put your customers through to play them. Apparently, someone hasn't been reading the news.

Fourthly, F@$% you, Mr. DeMartini.

 

[Ickorus]

Yet another reason Origin will never be able to truly compete with Steam. Besides the usual Origin issues...

And as to training people to wait for Steam sales... Maybe kinda true? Most people who want a new game want it NOW. If they wait, that probably means they cant afford to pay 60 bucks just to get something right away. So its giving them a chance to buy the game at a more affordable price at the cost of waiting. A cheap sale is better than no sale at all.

Exactly.

Not much for me to add beyond what you've already stated.

EDIT: This might be interesting to add I guess:

http://www.escapistmagazine.com/articles/view/features/9011-The-Terrifying-Tale-of-Amnesia

Spoiler: Particularly..

Finding some kind of financial backing did not go much better. Banks were still skeptical about the project, angel investors did not understand the project, and publisher interest was low. I actually started to prepare my CV to look for job opportunities.

At the start of June, things changed for the better. Steam had a sale of the Penumbra Collection at 75% off. While Paradox owned the digital rights of the Penumbra games Black Plague and Requiem, we had retained the complete rights to Overture. This meant that we would be getting more than a third of the profit from the sale. Our hopes were pretty low, but amazingly the weekend-long deal sold more units than the combined lifetime of all Penumbra games. We were overwhelmed to say the least.

We knew this was our lucky break, and with salaries cut in half across the board we were able to maintain staff and keep things going. Still, we knew it was not enough money to complete the game, and we had to take matters into our own hands. Boosted by the popularity of the Steam sale, we made our own sale of Penumbra with Linux and Mac versions of the game included, and the income from that matched our profits from the Steam sale.

Oh yeah, and I got Civ 5 whilst it was on sale the other day for £7.49 and now I'm seriously considering purchasing the new expansion for £17.99.

 

[Paladin2905]

Yet another reason Origin will never be able to truly compete with Steam. Besides the usual Origin issues...

And as to training people to wait for Steam sales... Maybe kinda true? Most people who want a new game want it NOW. If they wait, that probably means they cant afford to pay 60 bucks just to get something right away. So its giving them a chance to buy the game at a more affordable price at the cost of waiting. A cheap sale is better than no sale at all.

Exactly.

Not much for me to add beyond what you've already stated.

I agree.

I'd also add that Steam sales make a good opportunity for games that didn't get really hyped or got critically panned to find new life. I know I've picked up a couple of lower score games I'd never heard of on Steam sales and then loved them to death. Makes for a good counterpoint to the insatiable hype engine which you'd need to sell everything at your original price point. Makes sense coming from the company putting out a new sports game edition every 12 months though- long term sales are not their business. Hell, you see that with lots of "AAA" titles now, its just like antivirus programs- what used to be Program version 2.0 is now Program 2009 - the search for more money.

 

[Kargathia]

It makes sense, the Amnesia dark descent guys had a sale and did say they made SOME money, but due to it being on sale all the time they didn't even get close to what they wanted.

Oh, you mean those guys that literally stated the only reason they didn't go bankrupt before releasing Amnesia was because Steam held a sale on Penumbra? One that literally more than doubled the total units sold?

Link to source [http://www.escapistmagazine.com/articles/view/features/9011-The-Terrifying-Tale-of-Amnesia.3]

 

[UNHchabo]

1) Publishers are the ones who tell Valve to put their game on sale. If EA wants their games to only be 20% off during a Steam sale, then they can do that.

2) Traditional economics says that a 50% sale will gain you twice the sales, giving you the same amount of revenue as before. This is false. Valve has found that putting games on sale increases the revenue by orders of magnitude.

3) If you put a game on sale, tons of people will buy it. But then the sale ends, and those players' friends will hear how cool the game is, and will buy it at full price, so they can play along with their friends.

 

[Starke]

And since another digital unit costs $0 to give to someone it is going to be pure profit to the developers.

Eh, not quite $0, you still need to pay for bandwidth, and you're still paying to keep some copies sitting on a server somewhere. But, then again, that's nothing compared to the costs of producing and distributing another physical copy of the game...

Thing is, the Steam Sales do three things.

1) They inspire brand loyalty. I ran across a phrase once, "there's no brand loyalty so strong it can survive a 50% off coupon." Steam's taken that idea and run screaming with it, and upped the ante. "50%? BULLSHIT! We'll do 90% off!" And we're off to the races. Steam may not be a perfect service, but the (now constant) sales transform it into a very likeable one.

2) They generate revenue. The big sales, Christmas, summer, groundhog day, those sales actually get people spending money on things they don't even want. Show of hands, who here has come out of a major Steam Sale with a backlog of 10 or more games? How many of those games would you have ever considered buying under normal circumstances? That 75% off tag causes all of us to loose our goddamn minds. It's not something we blame Steam for afterwards, which is pretty important. But still, it's money they would not have gotten otherwise.

3) They underline just how bullshit the $60 price point is. And that's what DeMartini's freaking out about. The $60 price point is absolute bullshit. It is simply an attempt to squeeze as much money out of the dwindling "buy it release day" crowd. Of course, DeMartini is looking in terror at the prospect of having to cut prices, because he assumes lower prices don't equal more sales... which is, idiotic.

 

[JackyG]

Here's a summation of my experience using origin.

Even when I have the game on a disc, I need to re-install origin EVERY SINGLE TIME I WANT TO PLAY A GAME and I have to use a crack on my pre-ordered N7 edition of Mass Effect 3 to get the DLC to work.

There's a reason EA; a company probably 100x the size of Valve cant maintain a desirable digital service: You don't have your ears to the ground.

 

[idarkphoenixi]

Oh EA....You almost have to love how brazen they are when it comes to things like this. They're like the Fox News of gaming.

 

[Frank_Sinatra_]

Most people who want a new game want it NOW. If they wait, that probably means they cant afford to pay 60 bucks just to get something right away. So its giving them a chance to buy the game at a more affordable price at the cost of waiting. A cheap sale is better than no sale at all.

/thread

That's how I go about the issue. There are games I want to buy but due to financial obligations I can't have them NOW but when the sale runs around it's great because I can legally get the game and enjoy/support that particular IP.

 

[weirdee]

further example: after getting the full run of borderlands goty edition for really cheap on steam, seeing the money burner edition with the cool stuff that is more cool with the context of the original, plus being shown practical dlc included with any preorder (a special fifth character whose presence is entirely optional on top of the four characters that we expect to be the main part of the game because the original game also had four characters), actually brings up a hard decision on whether or not to preorder the normal version of the game, or get the moneyburner edition now before they run out of awesome life sized loot chests with haunting realistic glow action

you will notice how "not buying the game at all" has not entered this decision to begin with, because by now, having experienced the first game, you know the second one will probably continue the tradition of over the top violence humor and sweet loots

 

[Steve the Pocket]

So Activison aren't trying to be bad, they are trying to do the right thing they are just utter hacks. EA is deliberately and knowingly bad.

Ha ha ha ha.

OK, first off, nobody, not even EA, is trying to be evil for its own sake. Somewhere out there is someone who genuinely thinks the dick moves they pull are good for business somehow. What makes a company evil is being willing to stoop to anything to make more money.

As for all that other stuff you said, read up on Activision's history with Infinity Ward sometime, or their habit of shutting down every studio that wasn't making franchises they could exploit with sequel after sequel (six studios shut down in the last two years), or how their CEO said flat-out that his goal was to make video game development less fun.

 

[RhombusHatesYou]

GoG said HUGE sales can cheapen a game. Remember that GoG.com has its own regular chunk of sale specials going on all the time, what they said was harmful were the "80%" off kind of big sales.

Yeah, and they said it was bad because it encouraged people to impulse buy and never even try a chunk of the games they pick up as well as causing an extreme boom/bust sales cycle... one that evens out in the end, certainly, but is firmly under the control of Valve. They also took the position that lower regular prices with less extreme discounting during sales was a more sustainable, positive long term alternative for the industry and more importantly for gamers.

 

[Teh Jammah]

EA Guy: "Steam sales cheapen IPs and are damaging to the industry."

What, you mean like how retail games often drop rapidly in price shortly after release, or get slapped in two-for-X (or better) deals? 'cos that's been happening for ages. Or is this different because this time the one who has to take a divot out of their earnings is you and not the store (who incedentally also sell pre-owned games and are thus EVIL)?

Or how you yourselves have already trained us to wait for the price to drop and/or for the inevitable Ultimate Arcade Hyper-Fighting Game of the Year Edition with all the DLC features?

Kinda hard to see this as anything but EA bitching that their money pool isn't big and full enough.

 

[F4LL3N]

I see where his coming from, but I think the trick is to sell more copies than you normally would to make up the price reduction. You do that by making better games.

If you think overpricing shit games is good for the industry than you are wrong.

 

[Dastardly]

I think there's something you're misunderstanding, and I think it's the same thing EA's folks are missing. We only see the developer "getting screwed" if we look at the per-copy sale price and compare it to the usual. In the retail world, that comparison holds water -- it costs money to burn the disks, package and ship it all, and get it stocked on shelves. In the digital world, however, there is no per-copy cost. Moving one unit at $1 million is exactly the same as moving a million units at $1 each.

The problem is that the logic most people are using in this thread doesnt hold any water if you know the even slightest thing about economics or running a business.

But it also seems a little like your arguments are mostly founded up Valve hate rather than on any support you've provided for what you've said. Namely, how Valve is hurting the developer (at least in any way that is different from the usual way publisher-distributors screw the 'little guy').

What is it specifically about Valve's business practices that present a unique harm to the developer, and how?

 

[Treblaine]

So Activison aren't trying to be bad, they are trying to do the right thing they are just utter hacks. EA is deliberately and knowingly bad.

Ha ha ha ha.

OK, first off, nobody, not even EA, is trying to be evil for its own sake. Somewhere out there is someone who genuinely thinks the dick moves they pull are good for business somehow. What makes a company evil is being willing to stoop to anything to make more money.

As for all that other stuff you said, read up on Activision's history with Infinity Ward sometime, or their habit of shutting down every studio that wasn't making franchises they could exploit with sequel after sequel (six studios shut down in the last two years), or how their CEO said flat-out that his goal was to make video game development less fun.

You're very right, many companies can look good in comparison to EA, it's like comparing Activision with Enron. Activision is still a really awful company but they seem to be contained in their damage, they are only in the CoD cycle and a plethora of movie licences games where they seem to be happy to stay. Activison may have purged many studios but unlike EA they didn't immediately begin buying up more to liquidate them. Activison let studios go intact, like the Sleeping Dogs studio. EA doesn't do that. They have accepted a limited partnership with Bungie, not demanding control. This is comparatively good.

What I mean by EA is they seem to have chosen the "fuck em" path of easiest buck that most other companies wouldn't do because it would be insulting and negative to their customers and the industry as a whole, but the EA has cornered that market if being completely unscrupulous and pig headed cashing in every shred of their reputation to hammer home a simplistic obsolete pricing model where they know they have the upper hand. And please, DO NOT DOUBT that EA is in dire straight, look at how their stock has been at a 50 degree slope down into the danger zone for almost a year now. This wouldn't be the first company it the world to be run into the ground by bad management.

There are a lot of "hardcore capitalists" out there who genuinely think the strategy for everything - even with your consumers - is to fuck them over at every opportunity and never give them an inch. The "greed is good" generation that don't want to make anything better, just syphon off as much as they can and as long as they are big and strong (enough money) they'll live. The "might is right" attitude.

They aren't being evil for evil's sake. They are being evil for greed and callousness. And I don't mean "serial killer evil" I mean as evil as a Video Game publisher can be without being raided by the FBI.

 

[Farther than stars]

The surprise can't be always-online DRM... Origin already gives that 'gift'.

Like it or not, there's no arguing that Steam [http://store.steampowered.com] sales don't offer tremendously good deals.

Are you sure about that triple negative there, Chalk? Because the rest of the paragraph alludes to a different point of view.