How are steam games so cheap?

[smallsusej]

Ok, I know a lot of you have been complaining that the price has risen blehblehbleh. But where I live, steam games are so much cheaper than the games in the stores! Like how can 75% off sales still be profitable? Someone please explain to me how it works. Thankss

[Cr4zy3ye]

It also helps to boost ratings for the games, making them sell better when they're off sale, :)

[KT Chong]

Tehnically, you pay to "lease" games on Steam, not to own them. Knowing what "buying" on Steam actually means, (which is actually NOT buying,) I would not pay too much to "lease" games on Steam.

[hot_gril]

What everyone said. Also, nobody can pirate Steam games and play online, so we don't have to pay for the pirates.

[MainframeMouse]

Diposting pertama kali oleh ktchong:

Tehnically, you pay to "lease" games on Steam, not to own them. Knowing what "buying" on Steam actually means, (which is actually NOT buying,) I would not pay too much to "lease" games on Steam.

Technically you don't Lease.
Google "software Lease agreement contract" or "software as a service contract"

All Lease agreements have a line like this

The Software is and shall at all times be and remain the sole and exclusive property of the Lessor and Lessee shall have no right, title or interest therein or thereto except as to the use thereof subject to the terms and conditions of this Lease.

Leases also have a set duration.

The Current SSA no longer has the line that says the software is licensed not sold. All software is licensed, you don't own a copy of a xbox game you own a "licensed copy of a licensed copyrighted product"

You DO own the licenses for your games, VALVe can not take this away. However when you get a game, your also get a subscription. This subscription allows you to download the installer and most importantly access the DRM authentication servers.

You own your games but they're locked and VALVe owns the keys

[MainframeMouse]

Diposting pertama kali oleh sudo:

What everyone said. Also, nobody can pirate Steam games and play online, so we don't have to pay for the pirates.

That's rather far from the truth.
I'm not sure if its a single statement or two.

If its two, Steam games are easily pirated. Just like any DRM system without hardware to back it up it only gives a slight delay before its available. With Steam the delay is even shorter since the work has already been done with the previous pirated release.

If its one statement, There are plenty of multiplayer games that are not key locked or have private servers.

[Alphacranberries]

Selling games in stores requires production of physical games and packaging. Then there's cost for shipping all the games to all the stores all over the world. Then there's the cut that the store takes to cover overhead costs and make profit. When it's all said and done, physical games cost loads more to get to you.

Digital distribution only has that last issue of store cut. Since most of the profit is made on the release, the developer still makes crazy bank at a 75% sale when people who normally wouldn't buy it go grab it because of the sale.

[DanTheKraut]

Diposting pertama kali oleh Alphacranberries:

Selling games in stores requires production of physical games and packaging. Then there's cost for shipping all the games to all the stores all over the world. Then there's the cut that the store takes to cover overhead costs and make profit. When it's all said and done, physical games cost loads more to get to you.

Digital distribution only has that last issue of store cut. Since most of the profit is made on the release, the developer still makes crazy bank at a 75% sale when people who normally wouldn't buy it go grab it because of the sale.

In the Euro Zone games are actually more expensive via Steam when it comes to certain Publishers. On sales games are of course cheaper.

[Alphacranberries]

Diposting pertama kali oleh DanTheKraut:

In the Euro Zone games are actually more expensive via Steam when it comes to certain Publishers. On sales games are of course cheaper.

Is that comparing the price when they're new releases?

[MainframeMouse]

The costs of
Hardware licensing (Console TAX)
Physical Production
Transport
Stock Storage
Defect Returns

Equate to about 25-33% of the cost of a console game. Just from basic cost reduction a PC Download should be £30 compared to £40-£45 on a console. Why on earth The Sims4 was £60 on release can only be put down to greed.

However it is after this things go south for the current PC ownership.

A console owner buys a new game for £40. Unwraps it and breaks the seal. The game now has a value of £35. He plays the game for a week, its worth £30. 2 months later, depending on the game, its worth between £10-£20. If he keeps the disk pristeen, 20 Years later it could be worth £0 again.

I've seen Dreamcasts going for more than I bought mine new.

Next there is the issue with Stock. A shop buys 1000 copies of GTA6. At release those games are worth £40, and the shop sells 500 copies in the first month. A month later the game is not so popular, there is more supply than demand also there are Second Hand copies going for £30. So the wrapped games are now worth £35. They sell another 300. A Year later they still got 100 copies. Almost no demand, so the games now worth £20.

A year or two later the publisher can re-release the game on Gold for £15.


For a Steam Gamer. They buy a game for £30, tick to agree to the SSA and pay. The game now has a value of £0.

VALVe will never have an issue with stock (except with the steamlink and controller). They will never have an issue with supply and demand. This will never effect game price.

There is no second hand market, no depreciation in value due to this.

The only factor to depreciate the value of a unsold game is its popularity. A less popular game is less likely to sell, therefore the price should be reduced. However as I'm about to show not to the level it should.

Lets Take Bioshock Infinite, 2 years old

Current Steam Price £19.99
New Disk Price from Game.co.uk
PC DVD £9.89
PS3 £9.99
XBOX £9.99

Yes for a short period Bioshock was available for £5 or something on a sale, but its those sales that are used to stoke the economy for times there is no sale. For the majority of the time the prices are higher, yet there is an assumption that it is cheaper.

[Alphacranberries]

What you say is true, but there is a flip side to it. Consider a physical game where the supply does not meet the demand. Strongest example of that I can think of in recent years would be Xenoblade Chronicles for the Wii. In US currency, it was $35 new. Because of it's limited release in the states, one would be lucky to find it for $60 used.

And on another note, the steam sales are not that rare. If you missed the last sale, there's always another one around the corner and you'll be likely to get that bioshock game or whatever game you were looking at for a significantly reduced price. Next big sale should be at the end of this month.

[DanTheKraut]

Diposting pertama kali oleh Alphacranberries:

Diposting pertama kali oleh DanTheKraut:

In the Euro Zone games are actually more expensive via Steam when it comes to certain Publishers. On sales games are of course cheaper.

Is that comparing the price when they're new releases?

New released or older titles it counts for both as example look at the Activision titles which are currently on sale all of them are cheaper if bought from retail (example Black Ops still costs 39.99 Euro via Steam when it is not on sale and the retail only costs 14.49 Euro which is even cheaper than the current sale is).

[0,0]

new released games are 20 to 30 euros cheaper in stores here in my country.like gta 5 its 60 euros on steam and 35 euros in stores

[Alphacranberries]

Interesting. In the states, new release costs are pretty similar between physical and digital versions.

[MainframeMouse]

Pure money grabbing.
When CD's first came out the production cost were about £1 of the £10 cost of a CD, compared to £0.30 of a £6 tape. Why so much more, because the audio quality (inspite of no additional costs) allowed them to charge more.
5 years later CD production cost was £0.10. Now the cost is about £0.02.

Same for DVD over VHS.

There are no major production costs difference between DVD and BluRay, but one cost a lot more.