Valve's Pricing Experiments Result in Time Travel and 40x Increases in Sales - Polidicks

[QUOTE=catbarf;32967584]Except then those customers who grab it on sale are all paying a very low price, whereas if the price were reduced more gradually, the overall profit would be higher, just drawn out over a longer period of time. These sales aren't an overall better business strategy, they're a quick way to cash in and get paid before the next release- still useful, but not something that will revolutionize the way games are marketed. There's a reason Portal 2 wasn't $20.[/QUOTE] You don't ONLY get the same number of sales in a smaller period of time with lower prices, though. You get more people making impulse purchases just because the game is lower in price and they go, "well I wouldn't have bought it otherwise, but at such a low price - sure, why not? Might as well give it a try."

[QUOTE=SataniX;32971251]Factor of 40 is a lot. I would've expected profits, but [b]40[/b]?[/QUOTE] Hats can do crazy things to people.

[QUOTE=J!NX;32945160][B]Gabe[/B] master race.[/QUOTE] fixed

[QUOTE=ironman17;32944357]They're the closest thing to good guys in this conflicted climate. Sure they have a monopoly, but unlike most wealthy people who grow complacent and indifferent, Valve's been investing their riches wisely in creating quality. Plus, they know that money-off sales make more people able (and more importantly [B]willing[/B]) to buy the game if it's good. And that's an important factor in getting games sold; making them great and memorable.[/QUOTE] The funny thing about their monopoly is that, they aren't a monopoly because they're the only digital distributor available or because they use tactics like buying out the competition, they have a monopoly simply because they're the best. The only way to keep that monopoly is to keep being the best which is a good thing for us.

[QUOTE=Ninja Duck;32944774]Think of it as supporting Valve, and in return you get some neat items for a game you enjoy playing.[/QUOTE] Valve are a huge multi-million dollar company, they don't need 'supporting' you tit. [editline]26th October 2011[/editline] [QUOTE=Electrocuter;32971592]The funny thing about their monopoly is that, they aren't a monopoly because they're the only digital distributor available or because they use tactics like buying out the competition, they have a monopoly simply because they're the best. The only way to keep that monopoly is to keep being the best which is a good thing for us.[/QUOTE] "Valve have put a £10 surcharge on all games. Welp, I guess I'd better abandon all the games on my steam account and go somewhere else"

Monopoly is a misleading term, since they do have competition. Origin, stardock, gog, those sorts of things. They're just the honest-to-god top dog.

[QUOTE=sltungle;32971425]You don't ONLY get the same number of sales in a smaller period of time with lower prices, though. You get more people making impulse purchases just because the game is lower in price and they go, "well I wouldn't have bought it otherwise, but at such a low price - sure, why not? Might as well give it a try."[/QUOTE] Absolutely true. You're also making less per individual sale. If a game's $20 instead of $40, you need double the number of sales to get the same profit. Now, while a $20 sale might get a lot of people to buy it immediately, slowly reducing the price from $40 to $20 over the course of a few months would likely garner similar total sales figures, but at a higher price, meaning more profit. And again, the proof is that Portal 2 wasn't sold for $20. If it were a viable marketing strategy to have games be cheap all the time, they would have done so. They're Valve, they self-publish, they're not constrained by publishers, and they take risks, so if they really thought it would mean more profit they would have done so.

[QUOTE=Capitulazyguy;32973315]Valve are a huge multi-million dollar company, they don't need 'supporting' you tit. [editline]26th October 2011[/editline] "Valve have put a £10 surcharge on all games. Welp, I guess I'd better abandon all the games on my steam account and go somewhere else"[/QUOTE] Except Gabe doesn't have to do that and he never would. They're the only company I can think of where none of the money comes from crazy investors, it's all in house. So all of their business decisions can be made without having to appeal stupid people who want to ruin things. [editline]26th October 2011[/editline] [QUOTE=catbarf;32973827]Absolutely true. You're also making less per individual sale. If a game's $20 instead of $40, you need double the number of sales to get the same profit. Now, while a $20 sale might get a lot of people to buy it immediately, slowly reducing the price from $40 to $20 over the course of a few months would likely garner similar total sales figures, but at a higher price, meaning more profit. And again, the proof is that Portal 2 wasn't sold for $20. If it were a viable marketing strategy to have games be cheap all the time, they would have done so. They're Valve, they self-publish, they're not constrained by publishers, and they take risks, so if they really thought it would mean more profit they would have done so.[/QUOTE] He's not saying that lowering the price makes it sell better. That's not how psychology works. If you take something expensive, and then lower the price for a limited time, more people will buy it. And if it's a multiplayer game, then you make even more lodesamone because after the sale the people who bought it convince their friends to buy it.

[QUOTE=Mr. Scorpio;32973999]He's not saying that lowering the price makes it sell better. That's not how psychology works. If you take something expensive, and then lower the price for a limited time, more people will buy it. And if it's a multiplayer game, then you make even more lodesamone because after the sale the people who bought it convince their friends to buy it.[/QUOTE] Having worked in a store I can guarantee you that this is how it works. We had a sewing machine that was advertized. So a woman and her husband comes up and thinks it's a nice price, cheap and all. So they ask "How much did it cost before?" I check a bit and see that it's really just simply advertised, not on sale, just shown in the papers. What do they say "Oh, well then I'm not interested". It would be cheap had it actually been worth twice as much. But when that's the actual price? What a piece of junk, too expensive. Similarily when stuff like toilet paper and soda is on good sales you will usually see tons of people just stuffing their shopping carts full of just that and nothing else. (with toilet paper it would usually create a line of people waiting for us to get out new double stacked pallets of toilet paper, and it's gone within a minute)

[QUOTE=Ganerumo;32970832] [img]http://img341.imageshack.us/img341/9258/gabenpirate.jpg[/img][/QUOTE]I've always wondered where this image was from. When did they take it and what were they doing?

[QUOTE=Lordgeorge16;32977310]what were they doing?[/QUOTE]well Gabe's sitting on a pirate ship obviously

[QUOTE=DarkMonkey;32973526]Monopoly is a misleading term, since they do have competition. Origin, stardock, gog, those sorts of things. They're just the honest-to-god top dog.[/QUOTE] Monopolies can have competition.

[QUOTE=Capitulazyguy;32980348]Monopolies can have competition.[/QUOTE]I thought the entire idea behind a monopoly, is that there IS no competition.

[QUOTE=Capitulazyguy;32973315]Valve are a huge multi-million dollar company, they don't need 'supporting' you tit. [editline]26th October 2011[/editline] "Valve have put a £10 surcharge on all games. Welp, I guess I'd better abandon all the games on my steam account and go somewhere else"[/QUOTE] Of course they need supporting. In your logic they should be giving their games for free saying "we already have lodsa money we don't need u to pay lol"? And if Steam becomes shit with 10£ higher prices you can stop buying on Steam without stopping to play your Steam games.

[QUOTE=Demache;32981749]I thought the entire idea behind a monopoly, is that there IS no competition.[/QUOTE] Nope. All that matters is if they have a large proportion of the market. Microsoft almost got broken up because it allegedly abused its monopoly, even though there were plenty of other competitors.