How does Steam make so much money with all these sales and discounts?

[Moody]

Hello everyone,

I was just wondering how Steam makes their money from selling games for dirt cheap during most sales. Last holloween sale, I bought the Bioshock Triple pack for about $3.50, when it would cost $25 in package. Im also guessing that Steam makes more money than Xbox Live and PSN even though those games are complete ripoffs.

Im just wondering why?

[Moody]

Originally posted by Denis Fried Chicken:

I think its up to the developpers/publishers to decide wheter they put their games on sale or not, so the lose is more on their side than on steam side.

I imagine that steam/valve take a percentage of the price, so yes they get less, but the developper too.

If the developers do decide, then why don't they ask for sales on Xbox Live and PSN as well?

[Muppet among Puppets]

You make the most money if you harvest all possible levels of a digital product.
From full price to big discount over time.

That way you even sell the game to people who probably never would or actually play the game.

[Moody]

Originally posted by Muppet among Puppets:

You make the most money if you harvest all possible levels of a digital product.
From full price to big discount over time.

That way you even sell the game to people who probably never would or actually play the game.

That actually makes sense. I have a bunch of games that i hardly or didn't play at all.

[Black Blade]

There are a few reasons for it, as said all ready, if you drop the price over time, you get to sell to all users, and not just the users that are wiling to pay the full price for the game

The reason its seen less on Console in my guess, is for a few reasons:
1. They will not want to drop the price under the Disk price as then users may not buy on disk, that will be a lose on the company when they will be returned, Disks can also be resold\given away, what means one disk can be played by 10 users, unlike on download that only one user can play on each copy (ignoring Family sharing) so you sell more copys

2. On console you have a limited market, there are not that many games, when on PC if someone dose not buy your game, he has 1000000 other games to buy, so if you want to sell you may need to drop to make it worth it

3. Mental state of each, PC users expect cheaper prices, Consoles users expect higher prices, and buy on higher prices then PC players.. so if you can sell it for higher, why to sell for less?

[Quint the Alligator Snapper]

1. Valve gets like 30% cut from each sale. If developers/publishers want to lower the price, Valve gets less per transaction, but so do the developers/publishers, even more so. Devs/Pubs set the price themselves. Valve gets a cut no matter what.

2. As other people mentioned, consoles are limited market but PC is much broader.

[Python Jones P.I.]

Simple, it makes them more money.

If they sell an average of 50 - 100 triple packs a month at $25 thats $1250 - 2500, if in a sale it sells at $3.50 then the chances are thats going to sell a 1000+ copies making them $3500+. Thats money from people who would never of bought the game otherwise.

[Westie]

They make a lot, lets just say that

[Ledow]

Don't forget the market. Every single sale on the market - even for the lowest amount - makes them a percentage, and always at least a penny. It soon adds up. And look at how much sells every second on the market.

[Start_Running]

Originally posted by <\|/>Goblinthoody<\|/>:

Hello everyone,

I was just wondering how Steam makes their money from selling games for dirt cheap during most sales. Last holloween sale, I bought the Bioshock Triple pack for about $3.50, when it would cost $25 in package. Im also guessing that Steam makes more money than Xbox Live and PSN even though those games are complete ripoffs.

Im just wondering why?

Very simple. Your confusion comes from the fact that you think of steam like a traditional physical goods store. Where the retailer buys stock at a price and sells it at a marked up price. STeam doesn't operate like that. They are essentially a middle man providing a transaction platform. SO theyy are less like amazon and more like say Paypal. THey fascilitate the easy transaction between the pubklishers who are the actual retailer and the consumer. They take a roughly 30% cut of every financial transaction from sales to the community market. It's not a lot per... buuut factor in millions of transactions a day and yeah it adds up real quickly.

Also during those rock bottom sales, Publishers aren't exactly losing. Many times when a game goes on deep discount it's either very old and being used as a franchise hook. IT's like when WItcher 1 and 2 ere deep discounted around the time witcher 3 was released.

It's also a surprisingly cheap form of advertising.

[Insanity Claus]

Originally posted by Quint the Robot Girl (new mouse):

1. Valve gets like 30% cut from each sale. If developers/publishers want to lower the price, Valve gets less per transaction, but so do the developers/publishers, even more so. Devs/Pubs set the price themselves. Valve gets a cut no matter what.

2. As other people mentioned, consoles are limited market but PC is much broader.

Yep. Valve gets 30% of all sales. They don't actually buy keys or anything, so they have no real overhead.

On top of that, Valve gets a minimum of 10% for every transaction on the Steam Community Market. For Valve's own games, they get 25% of every transaction.

Then there is all of the sales of DOTA2 and TF2 and CS:GO stuff. Let's say that 2 million people play DOTA2 each day, 2 million play CS:GO each day, and 200,000 play TF2 each day. These are very conservative numbers and the amount of players is likely to be much higher, but I'm going to use these lowballed numbers to illustrate a point.

So, we have 4.2 million people play F2P Valve games each day. Let's say that only 1% of players each day decide to make a store transaction of only $5. That would mean that 42,000 people will buy something for at least $5. That's $210,000 each day. Within 5 days, Valve have made over $1 million. And that is, again, a very lowend number. DOTA2 and CS:GO regularly have over 500,000 concurrent players and can spike up to 1 million concurrent players (TF2 has around 50,000 to 80,000 concurrent), so total players per day is easily in the millions and Valve likely earns way more than what I guesstimated.

Reportedly, DOTA2 makes Valve $18 million each month[venturebeat.com], meaning that it pulls in $600k each day for a 30-day month. Giving the rough breakdown I did, you can easily see that $18m just for DOTA2 isn't too far fetched of a possibility. It should be noted , however, that we have no idea how much Valve actually makes. They are a private company, therefore, not required to publicly disclose their financials. The $18m per month for DOTA2 is simply a guesstimate from a professional data analysis company.

[Demba Ba]

because they can -.-

[Start_Running]

Originally posted by Spodermon99:

because they can -.-

..for the ones who are still alive...

[76561198188152325]

Originally posted by Ledow:

Don't forget the market. Every single sale on the market - even for the lowest amount - makes them a percentage, and always at least a penny. It soon adds up. And look at how much sells every second on the market.

^This

[Costa]

Originally posted by <\|/>Goblinthoody<\|/>:

Hello everyone,

I was just wondering how Steam makes their money from selling games for dirt cheap during most sales. Last holloween sale, I bought the Bioshock Triple pack for about $3.50, when it would cost $25 in package. Im also guessing that Steam makes more money than Xbox Live and PSN even though those games are complete ripoffs.

Im just wondering why?

You bought it for $3.50!?! I bought it for something like £5 or £6!!!

[Gaddox]

Lord Gaben Secrets