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Newell on Piracy, Pricing, TF2 Comics, and More

There's a Live Blog of the DICE 2009 Keynote on the G4tv Website recapping an address by Valve's Gabe Newell on the topic of "entertainment as a service," discussing Steam and serving customers in an era of increased digital distribution and piracy. Along the way he mentions plans for Team Fortress 2 comic books, created by the team behind the TF2 character videos, making a point that audiences tend to be fans of properties, rather than specific products. Gabe makes some sage observations, including how piracy is about service, saying pirates are beating companies on service, citing the example that TV shows are not available in certain parts of the world, but pirates have them up on the web minutes after they are finished airing. He says DRM decreases service value for customers, and makes pirated copies of games look more appealing, saying anecdotal evidence appears to suggest that DRM is increasing and not decreasing piracy. Perhaps most interesting is the talk of how Steam sales have impacted sales figures, which look like they make a strong case for the idea that games are overpriced, as not only did sales increase during these promotions, but so did their profits, and Valve also noted spikes in sales of Team Fortress 2 every time they issued a free update. Here are a couple of direct excerpts from an interesting recap:

Last weekend, Valve decided to do an experiment with Left 4 Dead. Last weekend's sale resulted in a 3000% increase over relatively flat numbers. They sold more last weekend than when they launched the game. WOW. That is unheard of in this industry. They beat their launch sales. Also, they snagged a 1600% increase in new customers to Steam over the baseline.

Worried retailers, fear not. The weekend sale didn't canabalize sales from retail. In fact, they remained constant. Well, constant isn't a 3000% increase, but it's still pretty good, right?

Looking at a third-party game, they saw increases of 36,000% with a weekend sale. Oh. Em. Gee. Okay, Gabe is starting to convince me that PC at retail is going to die very soon.

During the Holiday sales:

        • 10% sale = 35% increase in sales (real dollars, not units shipped)
        • 25% sale = 245% increase in sales
        • 50% sale = 320% increase in sales
        • 75% sale = 1470% increase in sales

At 75% off, they are making 15% more money than they were at full price.

Update: There is also an article about all this on Gamasutra.

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118 Replies. 6 pages. Viewing page 1.
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118. Re: Newell on Pricing Feb 26, 2009, 00:42 Tanto Edge
 
Steam is the original delivery service and the result is all the varied marketplaces where people vomit whatever half assed design they hash off as a game.

While in the beginning Steam was a mess, it quickly picked up... speed, and became a great service, and then diluted itself into a mess akin the others, HOWEVER! Amidst all the shit is still the core service and that much functions as it is supposed to.
However.
I have heard too many horror stories to simply turn a blind eye. Fact is I know people who have lost entire libraries of games for no reason that they care to explain and that really sucks.

I don't agree with perm bans for cheating, I do agree with temp bans.
When you pay for membership to a club, you can't go and cheat the club, but this isn't a local brick and mortar hang out.
This is an online service comprised of thousands of players.
There is no logical reason other than iron fisted authority to ban a member permanently.

For the record I have never cheated at an online game.
I really don't understand the point.
 
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http://www.youtube.com/watch?v=705LEH3j2g0&t=0m24s
http://www.youtube.com/user/tantoedge
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117. Re: Newell on Pricing Feb 23, 2009, 17:21 Dades
 
I am perfectly fine with DRM as long as it's unintrusive. I suspect many others are too. I don't think DRM is inherently evil or something, I use my computer at home as a recreational tool so if others want to get all political and dramatic about it then go nuts, not my problem though. Steam gives me what I want from it and doesn't really take anything away I care about. /shrug!  
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116. Re: Newell on Pricing Feb 23, 2009, 13:44 Dots
 
This is amazingly ridiculous. Some of you hate Steam so much that you are willing to play your games on a much more heavily locked, DRMed through system that is the average console?

Are you kidding me? What's wrong with you? It's the company's right to use middleware for whatever they want. Steam has Steamworks, it's a good set of middleware, stop crying about Steam just because its competition couldn't be arsed to develop the same kind of middleware Vavle did. Except for Games for Windows Live, I guess, which is much, much worse.
 
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115. Re: Newell on Pricing Feb 21, 2009, 22:59 Bluesfanboi
 
"Only on the internet do you find people actually cheering and supporting a reduction in their freedom of use, and value of purchase."

Don't assume that all of them are stating their own opinions, I'm sure many of them are paid to support Steam.

I too use Steam as a method to support indie game developers, and will in the future, but there is zero chance I will buy a game that I would have otherwise bought at retail.

Forcing me to run Steam to play a box game is exactly the situation you describe and I'm having none of it, why should I? I know where it's going to lead us...no where I want to be, that's certain.

Especially when Steams competition does it better...make Steam optional, and most of my objections vanish in a cloud of consumer choice.
 
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114. Re: Newell on Pricing Feb 21, 2009, 15:56 [VG]Reagle
 
Without Steam gaming would end on the internet. People like Z9000 should get on their knees and "thank" Gabe Newel for saving gaming on the PC.  
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I am MUCH MUCH MUCH MUCH MUCH better now.
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113. Re: Newell on Pricing Feb 21, 2009, 02:43 KilrathiAce
 
Newell says they making lots of money, well they may want to invest a lot of it into their network datacenters and infastructure because if they don't stay ahead of demand and user load, bad things may happen. Tonight steam datacenter crashed or about 20% of it according to a post on steam forums. A lot of folks had problems with many games for example freezing of games every few seconds in TF2 while there was some steam ticket errors, you could not use unlocks for classes cause steam was down, steam store was down, friends was down and supposedly some people could not run some of their games when launching as they were getting errors that they are not logged into steam even though the client was running as if it was logged in. Imagine if the system actually went down, like more than just 20% of it for a while...there be hell on gaming earth...  
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112. Re: Newell on Pricing Feb 20, 2009, 14:32 Z9000
 
I don't hate Steam, I bought over a hundred bucks of software on the 1st. Supported Pop-cap and bought some old out of print stuff (so my data is in those percentages as well). To me Steam was a Valve service helping indy titles at that time...

Next thing you know, all the big software companies want to turn it into Xbox live for every PC game. Sorry, not supporting that. Wallet stays closed on all Steam stuff. Then I find out Steam sells software that doesn't run (one title I bought), didn't respond to my email. Has an F rating with the BBB...

Only on the internet do you find people actually cheering and supporting a reduction in their freedom of use, and value of purchase.

And RP, if you have nothing better to do than take personal shots at people, go play your rental game on Steam.

Edit: And as far as Total War on a console... It's totally a console game already. Everything about that game can be run with a console pad since it's pretty much a pause and order game. The only limitation is how detailed a console can run the battles.

This comment was edited on Feb 20, 2009, 14:39.
 
PS3 resurgance by GOW3 - Check! Mass Effect for PS3 - Check! Diablo 3 for consoles? I say "For sure"!
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111. Re: Newell on Pricing Feb 20, 2009, 14:23 Ecthelion
 
I think it's sad that someone could hate Steam so much that he/she would be willing to play a PC-oriented RTS on a console (especially when the port is hypothetical), just to avoid using Steam.

This comment was edited on Feb 20, 2009, 14:24.
 
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110. Re: Newell on Pricing Feb 20, 2009, 14:18 RP
 
Here's a percent for ya: 100% of Z900's posts involve bitching about Steam.  
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109. Re: Newell on Pricing Feb 20, 2009, 13:58 Z9000
 
Percentages are always used when trying to make figures more impressive than actual hard data. Will pick up Total War on a console as they convert it to make something off their work.

 
PS3 resurgance by GOW3 - Check! Mass Effect for PS3 - Check! Diablo 3 for consoles? I say "For sure"!
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108. Re: Newell on Pricing Feb 20, 2009, 12:16 xXBatmanXx
 
Actually, run-of-the-mill flaming and pissing contests aside, this thread was a pretty good read.

I enjoyed it. It is rare I stick with a thread this long, but there were a lot of good points.
 
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Playing: New dad
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107. Re: Newell on Pricing Feb 20, 2009, 10:38 Prez
 
Actually, run-of-the-mill flaming and pissing contests aside, this thread was a pretty good read.  
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106. Re: Newell on Pricing Feb 20, 2009, 10:33 nin
 
To bad 99% of them where worthless drivel.

Yours, and the way you padded up to 100? Yes, quite.

 
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105. Re: Newell on Pricing Feb 20, 2009, 05:25 theyarecomingforyou
 
So if everyone dropped their prices people would be busy playing other games. So that total gaming market at that point wouldn't be limited by the budget of the gamers it would be limited by the playing time of the gamers, thus there would be encouragement to make smaller games to increase turn around... I know $50 may be too high but you can see how 2.50 would be too low.
Hah, what an astute observation.

The key difference between now and then is that the few "great" games now are mediocre by the standards set by the few back then.
lol?
 
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104. Re: Newell on Pricing Feb 20, 2009, 01:33 Elricsi
 
I was waiting to get this game on sale somewhere, so I was part of that 3000% spike. I am watching these weekend sales, and have a few more games in mind if the price is right.

The only problem is I am out of space on my C: drive and want to keep all my steam games on that drive.
 
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103. Re: Newell on Piracy, TF2 Comics, and More Feb 20, 2009, 01:00 MindStalkerReturned
 
- A game is in infinite stock and has no reproduction cost therefore you can sell infinite amounts.
- Theres potentially 2.5 billion customers
- Your game reaches only 1 million for 60$ price
- Your game could reach 14 million for 15$ price
- Your game could reach ~240 million (In the EU/USA/JAPAN/CANADA) for 2.50$ price

Now i leave it to you to come to the result which one of the 3 scenarios nets you more profit. ^^


But there has got to be a ceiling there of budget and time.
Left 4 Dead for example, lets say your theoretical 240 million worldwide who would buy the game at $2.50. Its a fairly short game by comparison but even still it could easily satisfy someone for 2 weeks where they won't buy anything else. They might have the money to buy something else but whats the point, they are busy playing L4D. So if everyone dropped their prices people would be busy playing other games. So that total gaming market at that point wouldn't be limited by the budget of the gamers it would be limited by the playing time of the gamers, thus there would be encouragement to make smaller games to increase turn around... I know $50 may be too high but you can see how 2.50 would be too low.

 
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102. Re: Newell on Pricing Feb 20, 2009, 00:58 Jerykk
 
The current problem is that a lot of games aren't making money because SO MANY OF THEM SUCK SHIT! It isn't like the 'good ol days' when majority of games were actually GOOD to GREAT!

I don't think the majority of games were ever actually good or great. The majority of anything is usually crap. The key difference between now and then is that the few "great" games now are mediocre by the standards set by the few back then.
 
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101. Re: Newell on Pricing Feb 19, 2009, 22:01 Mike Hunt
 
He says DRM decreases service value for customers, and makes pirated copies of games look more appealing...

Funny, coming from Valve. Hopefully this means we'll see a client-less Steam soon. I don't know why Steam can't just run server side, without imposing patches on me and "borrowing" my system information for wholly benign purposes.
 
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100. Re: Newell on Pricing Feb 19, 2009, 21:30 Bone43
 
100 post!
To bad 99% of them where worthless drivel.
 
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99. Re: Newell on Pricing Feb 19, 2009, 21:29 Bone43
 
all most there!  
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118 Replies. 6 pages. Viewing page 1.
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