4 ms·

This is the problem with assuming humans are all rational, utility I maximizing machines. When a game like Skyrim comes out, I don't care that it'll be $45 inst

This is the problem with assuming humans are all rational, utility I maximizing machines. When a game like Skyrim comes out, I don't care that it'll be $45 instead of $60 in some months. My friends are playing it, the Internet is playing it, people are making memes. I picked $45 as an example price on purpose, because games which are brand new (according to my anecdata as someone who couldn't stop refreshing Steam in Dec), newer games just aren't as deeply discounted as older ones. So no I don't buy it. There's a lot to be said for playing the new and shiny if you can afford it and if it's great. The only time I hold off on for a Steam sale is for a game I wasn't going to buy anyway. In a sense he's committing the same fallacy as the RIAA did by presuming that, in the absence of piracy (or sales in this case) people would just pay full price. Maybe some would! But it's fallacious to ignore the difference an incentive such as a sale makes in purchasing at all vs no purchase at all.

Periodic 13y ago
The author somewhat addressed this when he mentioned that the number of people buying in at the lower price that wouldn't have bought at full price have to offset the people who wait. However, I think you're completely right that the number people imagine exist may not be there. Obviously 100% of the sale buyers would have paid full price. I know that the majority of games in my Steam collection are not games I would pay full price for, but they are game that I was happy to pick up in a Humble Indie Bundle. Half the games in those bundles I don't even plan on playing ever and just bought because they were bundled with a few games I thought might be interesting. Choosing to participate in a sale increases revenue over not participating, but the author is worried about a world where sales become the new norm. Of course, if that's the case, bump your price from $16 to $30 and feel free to participate in those 50% sales after you've done your initial price bump. The market will sort that out. Additionally, sales are great for increasing brand awareness. Many retail sales aren't designed to make money on their own as much as get people into the store where they might buy full-price merchandise. As an anecdote, I bought Terraria for something like $2.50 on a steam sale. When I first heard of it I thought it didn't sound that great. It turns out I love it and spent 60+ hours playing in in the span of a month. Now I will definitely buy the company's next game, Starbound for full price when it's released. If they hadn't had the sale I would never have bought either game.
chii 13y ago
The author of the blog is making, imho, the classic mistake that the music industry makes when calculating potential revenue. He makes this quote: > If just half of the players who buy the game during a 50%-off sale would have bought the game at full price if that was their only option, we'd already have a wash. What fraction of sale-waiting players fall into this category? I suspect way more than half. The picture gets even worse for 75%-off sales. Which is a plain wrong assumption. The buyers of a 50% sale would hardly contain any who would've bought it at 100% price. Those who would've bought at 100% price have _already_ purchased! This is the same reasoning that music industry counts lost sales in - if they pirated it, then they _must_ also would have purchased at 100% price had piracy been prevented, because the media is so rock solid that it's assumed that the acquisition is going to happen no matter what, just the route to it!

Periodic 13y ago

The author somewhat addressed this when he mentioned that the number of people buying in at the lower price that wouldn't have bought at full price have to offset the people who wait. However, I think you're completely right that the number people imagine exist may not be there. Obviously 100% of the sale buyers would have paid full price. I know that the majority of games in my Steam collection are not games I would pay full price for, but they are game that I was happy to pick up in a Humble Indie Bundle. Half the games in those bundles I don't even plan on playing ever and just bought because they were bundled with a few games I thought might be interesting. Choosing to participate in a sale increases revenue over not participating, but the author is worried about a world where sales become the new norm. Of course, if that's the case, bump your price from $16 to $30 and feel free to participate in those 50% sales after you've done your initial price bump. The market will sort that out. Additionally, sales are great for increasing brand awareness. Many retail sales aren't designed to make money on their own as much as get people into the store where they might buy full-price merchandise. As an anecdote, I bought Terraria for something like $2.50 on a steam sale. When I first heard of it I thought it didn't sound that great. It turns out I love it and spent 60+ hours playing in in the span of a month. Now I will definitely buy the company's next game, Starbound for full price when it's released. If they hadn't had the sale I would never have bought either game.

chii 13y ago

The author of the blog is making, imho, the classic mistake that the music industry makes when calculating potential revenue. He makes this quote: > If just half of the players who buy the game during a 50%-off sale would have bought the game at full price if that was their only option, we'd already have a wash. What fraction of sale-waiting players fall into this category? I suspect way more than half. The picture gets even worse for 75%-off sales. Which is a plain wrong assumption. The buyers of a 50% sale would hardly contain any who would've bought it at 100% price. Those who would've bought at 100% price have _already_ purchased! This is the same reasoning that music industry counts lost sales in - if they pirated it, then they _must_ also would have purchased at 100% price had piracy been prevented, because the media is so rock solid that it's assumed that the acquisition is going to happen no matter what, just the route to it!