http://www.gamasutra.com/php-bin/ne...php?story=22378

One company is trying to do the opposite to combat piracy - and with surprising (well perhaps not for some of us) results. By trying to eliminate DRM as much as possible, and lower prices.

Thing is... Valve is run to a much higher degree by actual gamers, rather than suits, and suits have trouble going after anything on their own accord. Well, LOOK, EA investors and suits : Someone else, a MAJOR software company, has proven the economic and distribution models! At least for people with broadband connections! At least give us some freaking options!



"Furthermore, Newell claims, techniques like DRM actually increase piracy, not decrease it. It puts more distance between content creators and their customers, which ends up disempowering the creators."

< Snip! >

"The retail model of “lower the price until the game ends up in the bargain bin” is purely a function of “friction in the [retail] system,” Newell argues – it’s not a necessary pricing model outside of brick-and-mortar stores.

In reality, he says, with an online service, pricing can be moved up or down depending on appropriate data, those changes can be executed instantly, and customer response data will be available “within five minutes.”

“Last weekend, we decided to do an experiment,” he says, referring to this past weekend’s Left 4 Dead sale, which brought the game down to $24.99 through Steam – sales rose 3000 percent, and revenue far eclipsed the game’s sales during its launch window.

Meanwhile, Newell notes, retail sales did not change at all (full Steam integration allows Valve to monitor retail sales as well) – defeating the assumption that Steam sales cannibalize retail sales.

“One thing that really annoys me is the inefficiency of pricing we have in our industry,” Newell says.

When Valve held its recent holiday sale, titles discounted by 10 percent (the minimum) they saw revenue (not unit) increases of 35 percent. At a 25 percent discount, revenue was up 245 percent.

At 50 percent off, revenue was up 320 percent, and at a 75 percent discount, revenue was up an astonishing 1470 percent. Newell stressed again that those revenue boosts represent actual revenue dollars, and not unit volumes.

Wrapping it up, Newell again pointed to emerging services like Kindle and iTunes as further proof of this service model permeating modern business development – and reinforcing its importance to the games industry."

I fangirl the guys at Valve so much. They are the best game company out there right now ... they consistently release fantastic and innovative products AND they are fantastic to their fans. And Steam ROCKS.

I'm seriously thinking about using Steam for sims 3. It seems pretty freaking awesome. =3 Plus i heard that i can legally make a hard copy.. As long as i can do that..

The really astonishing part is this:



Which is just incredible, and shows how much MORE money you can make by LOWERING your prices. Go Valve!

BTW, do you really think Sims 3 will be distributed by Steam? They have some 350 titles now, but I don't think EA would release their game there? Especially without DRM etc.?

Just bought the entire X-COM Series from Valve for 20$ :D

Hmm, I'm not that big fan of Steam. I guess it's handy for buying games online, but I'm old fashioned physical property kind of guy. To me it's mainly an annoying extra program you have to run on the background. Not nearly as bad as the limited numbers of installation business, but still annoying.

As for the lowering price experiment... that's pretty interesting.

I agree with you. Nothing against Steam, but I want disk in hand

Yep, most people should just go ahead and get the real physical dvd. But for me it's really difficult to play a game after 3 or 4 years. The dated graphics ruin every bit of immersion. And it's sad to say that because I used to play text-based mmorpgs too lol.

So far I bought 5 games through digital distribution and the only one I still sort of play is Oblivion. And the only reason I continue to play it is because of the amazing modding community for Oblivion, almost as great s the Sims 2 modding community. The other games can be downloaded again if I ever want play them again but that will never happen :D.

Having the disk in hand is no guarantee, somehow I got a "lovely" scratch across my Pets CD; making it unreadable. Now, when the time comes to re-install, I'll have to go out and buy a new disk.

If it was installed using Steam, I'd just have to wait for it to re-download. Also, using Steam, I can play my game on any computer that has Steam installed, and my content is auto patched/updated.

I know there has been a phishing issue, but if you are gonna be dumb enough to give out your password for ANY reason, you deserve what you get.

My brother's played several games on Steam in the past (the one he played the longest was Counter-Strike) and he really likes it. There's one thing I don't like about it, though, and that's the fact you can't play without the internet. In our area, Comcast has cable outages all the time. In fact, it was out several hours yesterday, as well as for 7 hours on March 3rd. We get these 3-4 times a month, and they usually last several hours. So if I'm playing my game and the cable goes out, wouldn't the game just shut down before I get a chance to save? And I couldn't start playing during the outages either.

Actually, Steam does have an Offline Mode. It pretty much does what it says.

You just pick "Go offline" in the File menu and you no longer need an internet connection to play Steam games that it has already verified and updated. To go back online you pick "Go online" in the same menu.

For instance, I just tried starting Valve's own "Portal" game in offline mode. It just started right up, despite having been bought online as part of of The Orange Box. (Which ironically came without a box since it was bought online...)

So you don't need an active interent connection all the time for Steam. You get a few perks, like instant access to you Steam Friend List and server browser for multiplayer games, but that's about it.

As long as the game has been verified online once and is patched up to date, it'll run on Steam. Online or not. But if it's Counterstrike, you naturally won't be able to play online when offline, but the game will boot to tell you this.

If Valve was a woman, I'd do her and then marry her.

My CDs only get used for installing, then get put away

Same with mine, eccept the one that is actually in the drive (in my case M&G), and no, I don't use a no-cd crack. I don't even know what prompted me to open the Pets case when I did, it was only by chance I discovered the scratch.

*fake edit* Actually, I do remember, I was checking to see if the pamphlet with the cd key for my Castaways game was in the wrong case.

I have steam, and absolutely love it. Getting new games is a matter or clicking a button or two and waiting for it to download. You can interrupt a download and resume it later, and you never have to keep up with a CD.

If EA doesn't want to put Sims 3 on Steam, it would be cool if they came up with their own similar, Sims-exclusive client. The Sims are a popular enough series to warrant it, and the old Sims games could even be loaded on it. If you take the current tabs from Steam (Store, Community, Games, Media, Tools), it would be easy enough to see how it would work out.

To be honest I'm actually surprised EA hasn't attempted something like this already

The reason is because they need as fast as possible to cover the production cost. And second they need to get so many profit as possible, as long as the product is still hot in the market. After that, they can reduce the price.

Making game in US and west Europe is very costly. Since the salary is very high there and every year the cost production always increasing. There's more complex, more detail and more things need to be build. The only way is outsourcing to the third world like India and China. Especially for simple and repeating task.

Like Unreal Tournament 3 and Gear of War, they outsourcing many task to Shanghai, China. It reduce much of the production cost. And the developer already gain profit in just one or two weeks after the release date. After that they can reduce the price to lure common consumer who basically not so interesting with the game from the beginning.

Since the production cost is always increasing every year. We can expect that the next gen console game will cost us US$ 69-75. The new game engine trend today is not only can bring more complex gameplay and beautiful graphic, but also can reduce the production cost. Example: CryEngine 3 and IDsoftware Rage.

Second is the distributor chain. Steam just need server and fast internet connection. Game shop need shopkeeper, which is the biggest outcome. And the distributor need to takes big/more profit percentage from a single product to pay the shopkeeper big salary. That's why the game so expensive.

Except the game shop using robot, automated selling machine or Mexico illegal immigrant who want to be paid so cheap. Which the government will not like it and protesting it, since the US unemployment rate is so high today.

Celebriton, you're missing the whole point of the first post. If they reduced the price, they would INCREASE sales - not just unit volume (how many copies sold) but actual profits (how much money they make). They could cover costs BETTER that way, expose more people to their game, and increase the likelihood of further sales down the road of expansion and stuff packs.

I'm honestly surprised game companies haven't figured this out yet. There are fewer and fewer sales of games because of the greedy nature of the companies. I'm sure they made just as much money, if not more, during the hayday of gaming in the 80's and things were priced fairly so that pretty much everyone and their mom could get a nintendo and duck hunter, or super mario bros. I mean, more people bought the game boy than the GBA for goodness sake. It's all really gone down hill. Producers of games, with some notable exceptions, aren't gamers themselves. They are really out of touch and greedy. That's why there are so many remakes and sequels, if it's proven itself to be profitable why come up with something new? That's be too costly for them. It's reallly a shame. Graphics are getting better but games are getting worse.

I know, if EA can reduce the price, more people will buy. That's why I explain it almost impossible. Since EA taking a risk that the game will not sell well. Given high price, means easy for them to get higher profit from lower selling at first week sell. EA also can make a plan B, by reducing the price later, even reducing again to very cheap. So it lure people to buy the game. They can't sell a very low price at release date.

First they get more money by selling at high price when release date. Second they also get money from making a discount for the game later. May be the second will make EA earn more money, since there's so many people buy the game. Third EA can still reducing again the price to $10 level, that even more people will buy it. They can also bundling the game with other game and called it as special pack.

I love too if EA and other publisher reducing their game price, but in my opinion, it almost impossible to EA to sell a lower price at the first release. Even they will try to push the price higher in the future, especially if the production cost of next gen game is so much higher than today.

The only way is reducing the production cost and using EA owned online distribution system....or the credit crunch will make EA to rethink about reducing the game price, we hope so.

About graphic getting better but the gameplay getting worse. I'm agree with you, Elyasis. May be most of the production time and concentration is wasted on making a beautiful graphic rather than the gameplay itself.

More complex the gameplay means more bugs will occurred rather than simple gameplay one. Many game developer take safe path, and try to make the simple game but add some new features that will makes the game more attractive and unique, but basically it's still a simple game.

I also afraid the Sims 3 expansion pack will not so good. Since the game more complex, but the time and human resource is the same as the Sims 2. May be.

EA is famous for being to much careful with the budget and production cost. Most of their game is great and has a high quality. But in quantity, others is better. You can compare how much car model in Need for Speed series compare with Test Drive Unlimited and Gran Turismo series.

Talk about quantity, The Sims 2 and their expansion pack, in my opinion, there's so little number of clothes, hair style, furniture, etc. For my standard, it's dissatisfy. I think The Sims 3 will not far from it. We all depend on custom contents. Playboy the Mansion has a lot of furniture.