Send News. Want a reply? Read this. More in the FAQ.   News Forum - All Forums - Mobile - PDA - RSS Headlines  RSS Headlines   Twitter  Twitter
Customize
User Settings
Styles:
LAN Parties
Upcoming one-time events:

Regularly scheduled events

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.

View
78. Re: Newell on Pricing Feb 19, 2009, 15:36 human
 
Milk is not a good analogy for games in a economic analysis. There are about a billion reasons why, but I'll name the three most salient:

1) Milk is usually a basic food in many cultures. It is, therefore, in economic terms, relatively inelastic in its demand curve. People cannot find substitutes for milk and are not as willing to part with milk as prices rise as they are to games. Games, of course, are entertainment, and almost no one would prioritize entertainment over a basic necessity such as food.

2) Production and distribution costs of milk and games are wholly different. In Steam, which is what this thread is about, distribution costs are miniscule compared to the price of the production of the game. In milk, distribution costs are more substantial and more easily influenced by external factors such as the price of fuel, the cost of maintaining trucks, et cetera.

3) There are many producers and distributors of milk in most markets. Steam, as a distribution service, is probably the premier service of its kind. There are very few other online games distribution systems in place that compete with Steam.

All of these factors make your analogy fatuous to the extreme.

I am not making any 'defense' here of Steam. My only point here is that you are a moron and everything you say is laughable. The fact that you think you are some sort of messianic advocate of the consumer, "defending lower prices" makes a good laugh, but that's all.

And who cares if a game costs $65 in your country? Prices of various goods differ widely in different countries. If you are German, you are probably used to paying 2 euros for a döner and 2 euros for a beer, and yet you probably pay 1.5 euros or more for a liter of gasoline and here in the US we pay more for beer and less for gas.

'Defending' these prices (not that anyone can even do such a thing) does not remove the market conditions which make them so. That is not to say new ways of doing things cannot be found, and in fact it looks like Valve are trying these experiments to learn more about this new market, but the way you're going about this subject gives me nothing but lulz.

This comment was edited on Feb 19, 2009, 15:45.
 
Previous Post Next Post Reply Quote Edit Delete Report
 
    Date Subject Author
  1. Feb 19, 03:28 Re: Newell on Piracy, TF2 Comics, and More DangerDog
  2. Feb 19, 03:36  Re: Newell on Piracy, TF2 Comics, and More elefunk
  5. Feb 19, 04:00   Re: Newell on Piracy, TF2 Comics, and Mo  Blue 
  6. Feb 19, 04:22    Re: Newell on Piracy, TF2 Comics, and Mo Prez
  8. Feb 19, 04:39    Re: Newell on Piracy, TF2 Comics, and Mo elefunk
  20. Feb 19, 06:23  Re: Newell on Piracy, TF2 Comics, and More Nucas
  3. Feb 19, 03:42 Re: Newell on Piracy, TF2 Comics, and More Dr. D. Schreber
  4. Feb 19, 03:43 hum... PoopieMoopie
  7. Feb 19, 04:23 Re: Newell on Piracy, TF2 Comics, and More Tanto Edge
  9. Feb 19, 04:56 Valve discovers basics of economics eRe4s3r
  10. Feb 19, 05:09  Re: Valve discovers basics of economics Prez
  11. Feb 19, 05:14   Re: Valve discovers basics of economics eRe4s3r
  12. Feb 19, 05:23 Re: Weekend Sales Dev
  13. Feb 19, 05:45  Re: Weekend Sales eRe4s3r
  14. Feb 19, 05:53   Re: Weekend Sales Prez
  16. Feb 19, 06:00    Re: Weekend Sales eRe4s3r
  17. Feb 19, 06:14     Re: Weekend Sales Prez
  15. Feb 19, 05:54   DRM Jonny
  19. Feb 19, 06:23    Re: DRM eRe4s3r
  25. Feb 19, 08:10     Re: DRM Jonny
  18. Feb 19, 06:19 Re: Newell on Piracy, TF2 Comics, and More Donkey_Punch
  21. Feb 19, 06:49 Re: Newell on Piracy, TF2 Comics, and More theyarecomingforyou
  23. Feb 19, 07:28  Re: Newell on Piracy, TF2 Comics, and More eRe4s3r
  24. Feb 19, 07:36   Re: Newell on Piracy, TF2 Comics, and Mo wonkawonka
  27. Feb 19, 08:20    Re: Newell on Piracy, TF2 Comics, and Mo Ecthelion
  103. Feb 20, 01:00   Re: Newell on Piracy, TF2 Comics, and More MindStalkerReturned
  26. Feb 19, 08:11  Re: Newell on Piracy, TF2 Comics, and More Prez
  29. Feb 19, 09:00  Re: Newell on Piracy, TF2 Comics, and More killer_roach
  22. Feb 19, 07:25 Re: Newell on Piracy, TF2 Comics, and Mo wonkawonka
  61. Feb 19, 13:41  Re: Newell on Piracy, TF2 Comics, and Mo Krovven
  28. Feb 19, 08:33 Re: Newell on Piracy, TF2 Comics, and More theyarecomingforyou
  32. Feb 19, 09:28  Re: Newell on Piracy, TF2 Comics, and More eRe4s3r
  30. Feb 19, 09:02 Re: Newell on Piracy, TF2 Comics, and Mo Bhruic
  35. Feb 19, 09:40  Re: Newell on Piracy, TF2 Comics, and Mo eRe4s3r
  36. Feb 19, 09:44   Re: Newell on Piracy, TF2 Comics, and Mo killer_roach
  37. Feb 19, 09:48    Re: Newell on Piracy, TF2 Comics, and Mo eRe4s3r
  31. Feb 19, 09:15 Re: Newell on Piracy, TF2 Comics, and More RP
  34. Feb 19, 09:33  Re: Newell on Piracy, TF2 Comics, and More Jeraxle
  33. Feb 19, 09:29 Re: Newell on Pricing theyarecomingforyou
  51. Feb 19, 11:00  Re: Newell on Pricing loomy
  38. Feb 19, 10:04 Re: Newell on Pricing theyarecomingforyou
  40. Feb 19, 10:23  Re: Newell on Pricing Narf2029
  42. Feb 19, 10:30   Re: Newell on Pricing DrEvil
  46. Feb 19, 10:36    Re: Newell on Pricing Narf2029
  43. Feb 19, 10:30  Re: Newell on Pricing eRe4s3r
  58. Feb 19, 12:30  Re: Newell on Pricing Atomic
  39. Feb 19, 10:15 Re: Newell on Pricing xXBatmanXx
  41. Feb 19, 10:28 Re: Newell on Pricing xXBatmanXx
  47. Feb 19, 10:37  Re: Newell on Pricing eRe4s3r
  44. Feb 19, 10:30 Re: Newell on Pricing xXBatmanXx
  48. Feb 19, 10:38  Re: Newell on Pricing killer_roach
  49. Feb 19, 10:46   Re: Newell on Pricing xXBatmanXx
  50. Feb 19, 10:54    Re: Newell on Pricing eRe4s3r
  52. Feb 19, 11:13    Re: Newell on Pricing Prez
  45. Feb 19, 10:30 Re: Newell on Pricing Acleacius
  53. Feb 19, 11:17 Re: Newell on Pricing Bhruic
  54. Feb 19, 11:22  Re: Newell on Pricing Fion
  55. Feb 19, 11:22  Re: Newell on Pricing Ecthelion
  62. Feb 19, 13:41   Re: Newell on Pricing eRe4s3r
  56. Feb 19, 11:24  Re: Newell on Pricing Prez
  57. Feb 19, 11:46 Re: Newell on Pricing Kxmode
  59. Feb 19, 13:00 Re: Newell on Pricing xXBatmanXx
  102. Feb 20, 00:58  Re: Newell on Pricing Jerykk
  60. Feb 19, 13:32 Re: Newell on Pricing theyarecomingforyou
  63. Feb 19, 13:48  Re: Newell on Pricing eRe4s3r
  64. Feb 19, 14:12   Re: Newell on Pricing human
  67. Feb 19, 14:58    Re: Newell on Pricing eRe4s3r
  70. Feb 19, 15:20     Re: Newell on Pricing Krovven
  71. Feb 19, 15:24      Re: Newell on Pricing eRe4s3r
  75. Feb 19, 15:30       Re: Newell on Pricing Krovven
  77. Feb 19, 15:36        Re: Newell on Pricing eRe4s3r
  82. Feb 19, 15:40         Re: Newell on Pricing Krovven
  84. Feb 19, 15:45          Re: Newell on Pricing eRe4s3r
  85. Feb 19, 15:48           Re: Newell on Pricing Krovven
  86. Feb 19, 15:57            Re: Newell on Pricing eRe4s3r
  87. Feb 19, 16:16             Re: Newell on Pricing Krovven
  88. Feb 19, 16:24              Re: Newell on Pricing eRe4s3r
  89. Feb 19, 16:43               Re: Newell on Pricing Krovven
  73. Feb 19, 15:27     Re: Newell on Pricing Krovven
  80. Feb 19, 15:38      Re: Newell on Pricing eRe4s3r
  81. Feb 19, 15:39      Re: Newell on Pricing eRe4s3r
  65. Feb 19, 14:41 Re: Newell on Pricing theyarecomingforyou
  68. Feb 19, 15:04  Re: Newell on Pricing eRe4s3r
  74. Feb 19, 15:28   Re: Newell on Pricing Cutter
>> 78. Feb 19, 15:36   Re: Newell on Pricing human
  66. Feb 19, 14:45 Re: Newell on Pricing loomy
  69. Feb 19, 15:19 Re: Newell on Pricing VoodooV
  72. Feb 19, 15:26 Re: Newell on Pricing theyarecomingforyou
  76. Feb 19, 15:31  Re: Newell on Pricing eRe4s3r
  79. Feb 19, 15:37   Re: Newell on Pricing Krovven
  83. Feb 19, 15:43 Re: Newell on Pricing Hump
  90. Feb 19, 16:57 Re: Newell on Pricing Cock A Doodle Do
  91. Feb 19, 17:09  Re: Newell on Pricing Krovven
  92. Feb 19, 17:15 Re: Newell on Pricing theyarecomingforyou
  93. Feb 19, 19:58  Re: Newell on Pricing Kxmode
  94. Feb 19, 21:27 Re: Newell on Pricing Bone43
  95. Feb 19, 21:27 Re: Newell on Pricing Bone43
  96. Feb 19, 21:27 Re: Newell on Pricing Bone43
  97. Feb 19, 21:28 Re: Newell on Pricing Bone43
  98. Feb 19, 21:28 Re: Newell on Pricing Bone43
  99. Feb 19, 21:29 Re: Newell on Pricing Bone43
  100. Feb 19, 21:30 Re: Newell on Pricing Bone43
  101. Feb 19, 22:01  Re: Newell on Pricing Mike Hunt
  106. Feb 20, 10:33  Re: Newell on Pricing nin
  107. Feb 20, 10:38   Re: Newell on Pricing Prez
  108. Feb 20, 12:16    Re: Newell on Pricing xXBatmanXx
  104. Feb 20, 01:33 Re: Newell on Pricing Elricsi
  105. Feb 20, 05:25 Re: Newell on Pricing theyarecomingforyou
  109. Feb 20, 13:58 Re: Newell on Pricing Z9000
  110. Feb 20, 14:18 Re: Newell on Pricing RP
  111. Feb 20, 14:23 Re: Newell on Pricing Ecthelion
  112. Feb 20, 14:32 Re: Newell on Pricing Z9000
  114. Feb 21, 15:56  Re: Newell on Pricing [VG]Reagle
  115. Feb 21, 22:59  Re: Newell on Pricing Bluesfanboi
  116. Feb 23, 13:44   Re: Newell on Pricing Dots
  113. Feb 21, 02:43 Re: Newell on Pricing KilrathiAce
  117. Feb 23, 17:21 Re: Newell on Pricing Dades
  118. Feb 26, 00:42 Re: Newell on Pricing Tanto Edge


footer

.. .. ..

Blue's News logo