Why good business strategies don’t always involve higher price tags.
I’ve got to wrap this up quickly; I just bought six games in the space of a few days and all of them need to be played.
Yep, the Steam Summer Sale has been and gone and thousands of users have been filling their game libraries with stuff they might not have considered buying if the items in question had been priced at retail value. There are a few naysayers across all spectrums of the industry – even consumers – who suggest that this is a bad thing, that huge discounts devalue the work put into creating intellectual property and discourage purchasers from making future investments. Why buy a game on day one when you can wait a few months and see a chunky 75% off its asking price on Steam, right?
There is something I want to make sure we’re all aware of: it isn’t Valve’s decision whether or not a product is opted into the Steam discounts program. That decision rests squarely on the shoulders of the publishers who own the rights to the IP and, incidentally, who also decided to launch it on the Steam platform in the first place. It’s certainly not a case of one-sided profiteering, whichever angle you look at it from.
Now that that’s been clarified, let’s talk about the Steam Summer Sale and why all the aforementioned naysayers are talking out of their arses. They tell us, “Huge discounts don’t encourage consumer loyalty to an IP.”
I fail to see how the opposite could be true, but that’s hardly a valid response.
I bought no less than three ‘premium’ game editions in the Steam Summer Sale (those being Batman: Arkham Asylum, Civilisation V, and Strike Suit Zero), the combined total of which was around fifteen pounds. The argument here is that, having acquired these titles cheaply – none of which I have played before – I will feel indifferent towards any sequential releases in their franchises. Feeling indifferent, I won’t purchase future products when they arrive on the market and will instead wait for them to appear on special offer.
This is nonsense.
It’s true that I bought Batman: Arkham Asylum cheaply, but it’s also true that I’ve been completely awe-inspired by the faithfulness to Batman lore, the way our Dark Knight can scour a roomful of enemies and take them all down one by one, and the complex fluidity of the brawl gameplay. I can’t figure out why I didn’t buy it sooner, when it first appeared on the shelves. Was I busy that month? Did I mistakenly take rohipnol with my morning coffee on the day I went out to buy it? These are things I will never know, but the important thing to remember is this: I now own it and I’m very keen to finish it and see what Batman: Arkham City is like, after which I suspect I’ll be interested in the upcoming Batman: Arkham Origins.
Civilisation V is a hard nut to crack, but already I’m nibbling with enthusiasm at the levels of strategic conquest and, should future titles appear, I’ll be certain to get in early so I can learn the ropes. Strike Suit Zero, meanwhile, is fighting with my professional obligations – namely the need for me to write this blog entry.
The discounted prices lured me into buying these games and, if I’m being honest, if they hadn’t been so cheap I probably wouldn’t have bothered. But now that I HAVE bothered I’m eager to play and see more. Will I be waiting for future games in these franchises to drop in price by 75%? Fuck, no. That doesn’t mean I’ll shell out for the all-singing, all-dancing premium editions, but it does mean these IPs now have my attention and I’m prepared to spend on them whereas before they didn’t and I wasn’t.
But let’s not restrict this idea to games; we can use other media to emphasise how the cheaper option encourages consumer loyalty.
I presume a lot of readers are familiar with the Game of Thrones television series. It won’t surprise you to know that all three seasons are some of the most shared pieces of entertainment (illegally) across the internet. A lot of us have watched it on the cheap, which is to say we haven’t paid a goddamned penny towards it as an IP, but guess what? After people watch the series via illegal download, they go out and buy the books and DVD box sets – things which in my mind denote consumer loyalty. By naysayer logic, this shouldn’t have happened.
Some suggest that not only does the Steam discount process generally render consumers indifferent to high quality IP, but it hurts the profit margins of those who opt into the schemes.
That’s an interesting thesis, but here’s some actual evidence to the contrary. When 2K’s Civilisation V first came out there were problems on its servers; so many, in fact, that publishing rivals Kalypso Media had the bright idea of giving their real-time strategy sequel Tropico 4 an 80% price slash on Steam. They sold hundreds of thousands of copies to disgruntled Civilisation V players who had to find something to do while the server problem was fixed, and these people are still playing Tropico 4 today. Kalypso Media grew their consumer base by a significant figure and whatever money they ‘lost’ by doing this has been recouped by increased purchasing of Tropico 4 DLC and word-of-mouth advertising through the RTS community. Hardly what you could call a self-inflicted wound.
While it’s certainly true that publishers take a ‘loss’, in that they don’t make as much money as they would had I bought their IP at full price, once again I am compelled to point out that they have made a degree of profit and given me cause to show interest in future games. Which is more than they would have without the big discounts.
Ultimately there is always more than one way to skin a cat, so how Valve’s participating publishers choose to promote growth in their IP is liable to change. The Steam Summer Sale and Steam discounts in general present some of the biggest opportunities out there. It’s proving to be much more effective and less costly than an advertising campaign.