• Hey Guest. Check out your NeoGAF Wrapped 2025 results here!

Valve counters EA's Steam sales "cheapen intellectual property" accusation

At least read the argument in detail before posting misleading information:

1. VAT (20%) is included in the prices anyway
2. Platform license (20%) will be paid anyway [of course Steam, Origin, etc. is limited to the PC]
3. Developer cost will be paid anyway
4. Marketing is paid anyway

in fact, the difference is that distribution cost (2%) is not happening in the DD [however, obviously DD has much risk such as inventory management, less work for smaller titles, etc. it has quite a number of advantages, but not as long as the revenue for each sold game is considered]

You're the one so desperate to deal in 'overall revenue' rather than actual PC sales, as a sign that DD is bad for the industry;

An EA title for PS360 sold at retail for $60 nets EA ~ $20.
An EA title sold on Origin for $60 nets EA ~ $40.

So if EA sell 1 game via DD for every 2 games they sell at retail, they've just made the same amount of money, but "overall revenue" has halved.

EDIT:
And this is without even factoring in the secondhand market, where a single initial sale can mean upwards of 10 resales to a retailer, vastly increasing 'overall revenue' but leaving publisher income flat. Hence project $10.
 
I hope people like Sakaguchi making more games for iOS... [I mean, it is not only programmers who can change job, and even within the gaming market, making games we like is not the only option]

If Steam / iOS didn't exist Sakaguchi would be out of business. In your wonderful world of $60 retail games only most developers would be out on the streets at this very moment.
 
According to that article, there's about a 22% difference (20% from licensing fees and 2% from distribution). I imagine that for most console developers, the increased number of potential buyers/sales over PC makes up for the 20% licensing fee and the 2% distribution cost is negligible. It doesn't seem the difference in profit for the developer is as pronounced as some like to make it out to be (Else, using Valve's logic in the OP, developers would stop making console games).

of course publishers are going to put their games on both, especially if the game was a significant investment.

consoles are still more mainstream than a pc as they offer a lower entry cost in terms of hardware and are (at least used to be) easier to use.

that doesn't mean the pc doesn't offer better margins, in fact that is probably a major reason for why so many console titles are ported, despite the smaller (active) user base.


sorry, but I don't understand what you mean? Would you please connect the dots more elaborately

he means: pre-orders going up suggest that the numbers aren't going down despite frequent sales. In other words: sales don't stop people from pre-ordering games, they buy games on sale on top of them, not instead of them, thus they spend more money.
 
Plus, being on Steam means I know it's compatible with Windows7, not all old games are.

Actually, not all games for sale on Steam are compatible with Vista or 7. However, the store page for the game will warn you in advance with a bright orange warning label that it doesn't work on Vista or 7. Just look up Midnight Club II on the Steam Store. I own it, but I got it for free from Rockstar.
 
of course publishers are going to put their games on both, especially if the game was a significant investment.

consoles are still more mainstream than a pc as they offer a lower entry cost in terms of hardware and are (at least used to be) easier to use.

that doesn't mean the pc doesn't offer better margins, in fact that is probably a major reason why so many console titles are ported.

And again, the PC has no secondhand market; this is an increasingly large factor, particularly as retail is increasingly relying on resale and trade ins which directly eats into both revenue per copy sold and long term sales for a publisher.
 
And if the programmers could find higher paying jobs, then they should by all means take them!

I'm a consumer. My interests and those of those from whom I purchase are sometimes diametrically opposed to each other. They want to maximize revenue, I want to minimize cost.
This consumerist approach is really baffling and short sighted;

Let's say in the extreme case, all the game developers make their games for free; do you think in the 3rd year of doing this there will be any game developer left anyway?

You think gaming industry which is already not in a good shape, becoming any more fragile is a good thing for gamers? That it is a consumerist approach?
 
Let's say in the extreme case, all the game developers make their games for free; do you think in the 3rd year of doing this there will be any game developer left anyway?

You think gaming industry which is already not in a good shape, becoming any more fragile is a good thing for gamers? That it is a consumerist approach?

I assume you're aware that the single largest gaming platform on the planet is Newgrounds?

Or that the fastest growing sector of gaming is F2P?
 
This consumerist approach is really baffling and short sighted;

Let's say in the extreme case, all the game developers make their games for free; do you think in the 3rd year of doing this there will be any game developer left anyway?

You think gaming industry which is already not in a good shape, becoming any more fragile is a good thing for gamers? That it is a consumerist approach?

the ones most "hurt" by steam and sales, especially sales of older games, are retailers. That doesn't affect devs at all, in fact they profit from it (if they time their sales right).
 
that sentence pretty much describes my case:

Bought my first sale (magic 2012) at 3,5$, preordered Magic 2013 at full price
 
What long term? EA shuts down their servers long term. EA releases more annualized titles than anyone in the business long term. EA shuts down more of their developers than any other publisher long term. EA changes corporate and franchise strategies every year or two long term. There is literally no one at EA who is making even the slightest overture towards the long term.

And you know what else cheapens intellectual properties? Releasing positively putrid XBLA (Dead Space), iOS (Mass Effect), and Facebook (Dragon Age) titles in a terrible attempt to advertise your product. Bulk-garbage discounting your entire iOS catalogue to 0.99 regardless of original price simply to monopolize the top 100 sales on iOS during a sales chart freeze. Killing off developers (Bullfrog, Origin, Maxis, Westwood, UK, Japan, Pandemic, Bright Light). Reviving classic franchises in totally unrelated properties (Syndicate). Masking tons of content behind DLC paywalls (Well, pretty much everything, but I'll pick Family Game Night because I haven't slagged their family stuff yet). Killing a product's secondary market lifespan by introducing project $10 (Dragon Age: Origin, Saboteur, ... every game released since then). Streamlining the shit out of your game design with absolutely no regard to the heritage of the IP (Dragon Age II). Making abominably bad licensed content to turn a buck (Monopoly, Harry Potter 7/8). Turning your multiplayer into Gachapan (FIFA, Mass Effect) or using IAP as powerups to break game balance (Flight Control 2). Pushing out your 3rd party titles with no marketing support whatsoever (Shadows of the Damned, Alice, Syndicate). Launching your own PC DD service that's not ready for prime time and abandoning a vastly superior platform, creating a fragmented less coherent marketplace for a few ounces of lucre (Origin).

The emperor has no clothes and a tiny penis.
give yourself a new tag
 
You're the one so desperate to deal in 'overall revenue' rather than actual PC sales, as a sign that DD is bad for the industry;

An EA title for PS360 sold at retail for $60 nets EA ~ $20.
An EA title sold on Origin for $60 nets EA ~ $40.

So if EA sell 1 game via DD for every 2 games they sell at retail, they've just made the same amount of money, but "overall revenue" has halved.
Am I desperate, or you compare PS3/360 sales to PC DD sales instead of PC retail sales to PC DD sales when the argument is focused on DD vs Retail in general?
Please re-read what I posted; you are not correct

EDIT:
And this is without even factoring in the secondhand market, where a single initial sale can mean upwards of 10 resales to a retailer, vastly increasing 'overall revenue' but leaving publisher income flat. Hence project $10.
I specifically pointed out that for every game 'sold' the revenue is not different and that DD has many advantages...

I assume you're aware that the single largest gaming platform on the planet is Newgrounds?

Or that the fastest growing sector of gaming is F2P?
Activision-Blizzard should do this with CoD and WoW; following the fastest growing sector and the largest platform strategies will definitely make them more money...

And Nintendo should make all their games $0.99 and put them on the iDevices, cause that the biggest thing now!
 
Sometimes, instead of listening to the crap EA spouts, I wish journalists would talk to EA about their actual practices. I know sports gaming isn't covered too often in the gaming media, but NCAA Football 13 has been $44.99 for pre order on Amazon for the past two months and still is days after release. Day negative 60 twenty five percent discount:

http://www.amazon.com/dp/B006VB2UO6/?tag=neogaf0e-20

Isn't EA cheapening the NCAA brand by not charging 60 dollars for this game everywhere? This is what bothers me about EA. They don't practice what they preach. They had to give the OK for amazon to sell the game at this price.
 
Activision-Blizzard should do this with CoD and WoW; following the fastest growing sector and the largest platform strategies will definitely make them more money...

And Nintendo should make all their games $0.99 and put them on the iDevices, cause that the biggest thing now!

Hey lets cherry pick two of the biggest publishers in the world and put them as the norm. Great idea bro!

Shame not every publisher has a World of Warcraft or Mario game though. :/
 
I wonder for example why Amazon doesn't do this with their kindle books? Then I think probably because they have a very long term view considering this as it is their only business; and the same goes for Nintendo

Funny thing, the publishers won't let them. Which is why they and Apple are being sued by the US government.
 
Hey lets cherry pick two of the biggest publishers in the world and put them as the norm. Great idea bro!

Shame not every publisher has a World of Warcraft or Mario game though. :/
Shame every f2p or social game doesn't make profit... shame the whole iOS market is small, like as small as few franchises... and shame that we don't know will happen if the big players enter the f2p market when smaller ones will try to compete with them


Funny thing, the publishers won't let them. Which is why they and Apple are being sued by the US government.
Probably book publishers don't like making more profit through sales on Amazon either; how ignorant can they be?
 
Who says they did? Do you even know what you're arguing about anymore?
I do: just because f2p is growing, or that flash games are really popular, or that more people are buying more games on Steam than before, it doesn't make them a good example to be followed by the whole industry...

if they don't make profit, it doesn't matter how fast they grow, like it didn't with iOS;
 
Probably book publishers don't like making more profit through sales on Amazon either; how ignorant can they be?

Actually yes, that's the case. They would be making more money under the old agreement, where they let Amazon set the prices.

Sorry to say, but your sarcasm failed you.
 
If I buy a great game for cheap, it actually just makes the game *that* much better to me. I don't view it as cheapening the product, but rather me getting incredible value and entertainment for my money. It's rare that I feel this way about a $60 purchase.

Same here. I bought Alan Wake's American Nightmare for $12.50 and loved it, but if I had paid $60 I probably would have been really disappointed.
 
Actually yes, that's the case. They would be making more money under the old agreement, where they let Amazon set the prices.

Sorry to say, but your sarcasm failed you.
Would you please elaborate on this? You are saying publishers are doing something which makes them less money?
 
Probably book publishers don't like making more profit through sales on Amazon either; how ignorant can they be?

the fight going on in the book market goes beyond sale prices.

Amazon being so big creates many problems (one of them being monopolisation) and it threatens to make publishers (as amazon has started to publish books as well) and retailers obsolete, at the very least, it upsets the current power balance in the book-market.

if there's one thing publishers like more than money it's control over their own product. For the costumer and the authors the new situation is not that different from the old one. Much like with DD vs retail the people suffering most are the middlemen.
 
Best of both worlds for me. I haven't bought a game full price from Steam in a long, long time. Even the ones I really, really want because I know they'll be ridiculously cheap very soon. If this isn't fucking up anybodies day, then yay! Everybody wins!
 
Stop talking about iOS like its a complete story. Even old-school devs like Epic and Square make good money in that space when they operate smartly in that marketplace. It's a hard place to apply conventional wisdom to, yes, but it's far from a failure. It's just very different from anything before, a mostly unregulated market that lets anybody in and gives them at the very least limited visibility, and always perpetual availability. That takes time to figure out. It's not the devil. It's just different and right now a bit risky.
I don't like to see things black and white; neither f2p nor iOS is a failure, quite the contrary; however asking for example Nintendo to go iOS or WoW to go f2p [or implicitly saying that f2p and iOS are the future of gaming] is laughable...

the fight going on in the book market goes beyond sale prices.

Amazon being so big creates many problems (one of them being monopolisation) and it threatens to make publishers/retailers obsolete, at the very least, it upsets the current power balance in the book-market.

if there's one thing publishers like more than money it's control over their own product.
Steam on the PC game market is probably as big as Amazon on the book market;

I also found what Zou was referring to, it is much more complicated than his/her posts make it look:

http://mediadecoder.blogs.nytimes.c...nst-apple-and-publishers-over-e-book-pricing/
 
I don't like to see things black and white; neither f2p nor iOS is a failure, quite the contrary; however asking for example Nintendo to go iOS or WoW to go f2p [or implicitly saying that f2p and iOS are the future of gaming] is laughable...


Steam on the PC game market is probably as big as Amazon on the book market;

I also found what Zou was referring to, it is much more complicated than his/her posts make it look:

http://mediadecoder.blogs.nytimes.c...nst-apple-and-publishers-over-e-book-pricing/

people tend to not take f2p seriously but it's one of the most profitable business models right now. Some of the biggest gaming companies in the world have only f2p offerings and popular games like LoL or world of tanks make more money than most console games, even titles with abismal quality, like most of zyngas stuff, make a lot of money.

Steam and amazon are in no way comparable in market power. Amazon could get a monopol on the whole book market, Retail and DD. Steam is nowhere close to that market power in the gaming space and not even in the PC space as lots of alternatives exist, as well as retail (at least here in europe). Furthermore Steam only really covers the part of the pc market that deals in "conventional" games. Few of the biggest money makers on PC are on steam.
 
I don't like to see things black and white; neither f2p nor iOS is a failure, quite the contrary; however asking for example Nintendo to go iOS or WoW to go f2p [or implicitly saying that f2p and iOS are the future of gaming] is laughable...

WoW dose have a F2P option. Did anybody in this thread ask about Nintendo going iOS, or are you just conjecturing more imagined arguments?
 
WoW dose have a F2P option.
but it is not f2p? That's basically like a trial, or a demo you would say, considering how huge the game has got through expansions

Did anybody in this thread ask about Nintendo going iOS, or are you just conjecturing more imagined arguments?
This is a result of the argument that more gamers buying more games is a good thing [without being supported by further data]

people tend to not take f2p seriously but it's one of the most profitable business models right now. Some of the biggest gaming companies in the world have only f2p offerings and popular game like LOL or world of tanks make more money than most console games, even titles with abismal quality, like most of zyngas stuff, make a lot of money.

Steam and amazon are in no way comparable in market power. Amazon could get a monopol on the whole book market, Retail and DD. Steam is nowhere close to that market power in the gaming space and not even in the PC space as lots of alternatives exist, as well as retail (at least here in europe). Furthermore Steam only really covers the part of the pc market that deals in "conventional" games. Few of the biggest money makers on PC are on steam.
I do take f2p seriously; however, it is a blind judgment to say it is the future of gaming or most games can be profitable there... there are a few that make a lot of money, but

1. different demographic with different [preferable] monetization methods
2. different type of games
I am just saying generalization won't work.

Also, Steam on PC is 'really' big; I believe it has the %70 of the overall PC market in control; there aren't really any major competition; not as big as Amazon, but mostly because of HD consoles market; on the PC market, they are huge
 
lso, Steam on PC is 'really' big; I believe it has the %70 of the overall PC market in control; there aren't really any major competition; not as big as Amazon, but mostly because of HD consoles market; on the PC market, they are huge
And I don't see anything wrong with this.

"Cheapening" or not is completely irrelevant to me, all that matters is me and my wallet. It's up to them to find a profitable business model.

It's their problem, not mine. That said I buy my games full price very often. :p
 
but it is not f2p? That's basically like a trial, or a demo you would say, considering how huge the game has got through expansions


This is a result of the argument that more gamers buying more games is a good thing [without being supported by further data]


I do take f2p seriously; however, it is a blind judgment to say it is the future of gaming or most games can be profitable there... there are a few that make a lot of money, but

1. different demographic with different [preferable] monetization methods
2. different type of games
I am just saying generalization won't work.

Also, Steam on PC is 'really' big; I believe it has the %70 of the overall PC market in control; there aren't really any major competition; not as big as Amazon, but mostly because of HD consoles market; on the PC market, they are huge

the biggest difference is rescources. Microsoft, EA, Activision, Ubi ect all have the rescources and (partly at least) the platforms to do something about steam's dominance if they wanted to. The same cannot be said about the book market.

and more gamers buying more games is most definetly a good thing. I don't think any data is needed to prove that.
 
EA's hypocrisy really annoys me. They're just saying that because they're competing against Valve with Origin. If was up to EA, following their example, developers would shaft PC development since they canned some versions of their franchises, many EA Sports titles didn't saw a PC release anymore.

EA is very oportunist, they just watch what is currently working and then they follow it. I doubt they would ever take the risk or ambition Valve took to made something like Steam.
 
EA's hypocrisy really annoys me. They're just saying that because they're competing against Valve with Origin. If was up to EA, following their example, developers would shaft PC development since they canned some versions of their franchises, many EA Sports titles didn't saw a PC release anymore.

EA is very oportunist, they just watch what is currently working and then they follow it. I doubt they would ever take the risk or ambition Valve took to made something like Steam.

the main reason EA is cautious today is because almost everything risky they ever tried bombed horribly. They even managed to fuck up buying good developpers.
 
Am I desperate, or you compare PS3/360 sales to PC DD sales instead of PC retail sales to PC DD sales when the argument is focused on DD vs Retail in general?
Please re-read what I posted; you are not correct


I specifically pointed out that for every game 'sold' the revenue is not different and that DD has many advantages...

You keep changing your argument so that it is hard to follow, but you were earlier saying that even though Steam is increasing in sales, because 'overall revenue' is decreasing that means that the market is contracting, and that that is somehow steams fault.

I showed you (with maths!) that overall revenue is utterly meaningless, because a publisher can make the same or greater revenue via direct digital distribution, and that the only end result is that people making games make money for the industry to thrive; not middlemen, not retailers, not DVD pressing plants, not delivery drivers.

I am comparing console sales in retail with PC sales via DD, because the PC has not had any significant retail presence for years now; this is one of the many reasons why PC gamers are so willing to embrace a DD market, because they've been utterly neglected at a retail level until now.

The point of me showing you the revenue EA make via a PC sale through their own store is not to say they should give up the console business; it is to point out that EA have a very real and very vested interest in being able to charge a consumer the same price for a DD only PC title and a retail console title - they make a lot more fucking money that way.

They might want to portray that as somehow keeping the inherent value of IP 'pure', but when you look at the figures involved you can also draw the conclusion that they are being fucking greedy and spin-spin-spinning that via PR.


EA's hypocrisy really annoys me. They're just saying that because they're competing against Valve with Origin.

It's not 'just' competition with Valve; selling DD only PC games at retail console prices means significantly more profit per game sold. It is very much in their interest for consumers to believe a PC title sold on Origin 'should' cost as much as a PS360 title sold at Best Buy.
 
You know what cheapens intellectual property? Hats.

And how.

teamfortress2timbuktues.jpg
 
Usually, in America we see consumers drastically lower their standards to derp out on whatever's cheap. This is a slightly different problem in that the games aren't inherently of a lower quality.
 
I'm not sure what the point of the iOS analogy is here. On Steam, games drop to absurdly low prices for a weekend, while on iOS, they have to be cheap all the time, so you can't have any purchases at a higher price point.

Because Steam sales come well after release and are time limited, they're a pretty effective form of price discrimination. Anyone who wants a game enough to spend $50+ on it probably wants it sooner rather than later.
 
I find myself feeling reluctant to pay full price for a game when I know that it will eventually go on sale. So I just wait.

What if we take it to the other extreme, where the more I pay, the earlier I get the game.

Pay $10,000,000 and you get a copy of the game before it was even conceived.
 
It's already been written 10 times but there's a whole unhealthy ecosystem which is way more damaging than sales:

A) Set up a huge budget project because that's the name of the game and there's obviously no other way to make good games.
B) Make a highly derivative game because said budget has obviously made you risk adverse. Additionally, hire focus groups.
C) Use every possible PR mechanism to hype your game, along the other 100 AAA games released this year. Glowing previews will help, even though previews are always flattering anyway. This will help balance out any creative shortcomings from B.
D) Set up retailer exclusives because assuaging retailers is the only way to have them push your game rather than one other of the dozen released this month.
E) Set up shitty DLC which will amount for 5% of the content of the game. Set its price at 15-20% that of the game. To hedge your bets, develop it with the game and put it on the disc.
F) Moan a bit about server costs, people having children to feed and retailers being crooks with their second hand market. Announce an online pass.
G) Launch the game, to reviews averaging above 75 because they have to.
H) Sell it for 2 weeks and forget about it until the next batch of shallow DLC.

Either go back to A) to make a sequel or proceed to I) depending on sales.

I) Your game has sold like shit despite your expectations and you realize the zero-sum game you're playing across your company won't cut it. Fire a few dozen people, blame the developers, piracy, the second hand market, sales, facebook, the mobile market, the players or the weather and move on to A).
 
Valve is living proof that you don't have to have an antagonistic relationship with consumers to make money.

Crazy, I know.

As for my habits I buy day one if I want it now. I check the sales just in case more than I actually wait for them, thus my growing backlog.
 
It's already been written 10 times but there's a whole unhealthy ecosystem which is way more damaging than sales:

A) Set up a huge budget project because that's the name of the game and there's obviously no other way to make good games.
B) Make a highly derivative game because said budget has obviously made you risk adverse. Additionally, hire focus groups.
C) Use every possible PR mechanism to hype your game, along the other 100 AAA games released this year. Glowing previews will help, even though previews are always flattering anyway. This will help balance out any creative shortcomings from B.
D) Set up retailer exclusives because assuaging retailers is the only way to have them push your game rather than one other of the dozen released this month.
E) Set up shitty DLC which will amount for 5% of the content of the game. Set its price at 15-20% that of the game. To hedge your bets, develop it with the game and put it on the disc.
F) Moan a bit about server costs, people having children to feed and retailers being crooks with their second hand market. Announce an online pass.
G) Launch the game, to reviews averaging above 75 because they have to.
H) Sell it for 2 weeks and forget about it until the next batch of shallow DLC.

Either go back to A) to make a sequel or proceed to I) depending on sales.

I) Your game has sold like shit despite your expectations and you realize the zero-sum game you're playing across your company won't cut it. Fire a few dozen people, blame the developers, piracy, the second hand market, sales, facebook, the mobile market, the players or the weather and move on to A).

citizenkaneclap.gif
 
It's already been written 10 times but there's a whole unhealthy ecosystem which is way more damaging than sales:

A) Set up a huge budget project because that's the name of the game and there's obviously no other way to make good games.
B) Make a highly derivative game because said budget has obviously made you risk adverse. Additionally, hire focus groups.
C) Use every possible PR mechanism to hype your game, along the other 100 AAA games released this year. Glowing previews will help, even though previews are always flattering anyway. This will help balance out any creative shortcomings from B.
D) Set up retailer exclusives because assuaging retailers is the only way to have them push your game rather than one other of the dozen released this month.
E) Set up shitty DLC which will amount for 5% of the content of the game. Set its price at 15-20% that of the game. To hedge your bets, develop it with the game and put it on the disc.
F) Moan a bit about server costs, people having children to feed and retailers being crooks with their second hand market. Announce an online pass.
G) Launch the game, to reviews averaging above 75 because they have to.
H) Sell it for 2 weeks and forget about it until the next batch of shallow DLC.

Either go back to A) to make a sequel or proceed to I) depending on sales.

I) Your game has sold like shit despite your expectations and you realize the zero-sum game you're playing across your company won't cut it. Fire a few dozen people, blame the developers, piracy, the second hand market, sales, facebook, the mobile market, the players or the weather and move on to A).

Damn.
 
The company that just added a premium service to Battlefield and is trying to turn Dead Space into a Gears of War clone is talking about other developers cheapening IPs?

What?
 
Sale prices hit gamers with a higher price elasticity of demand for the game in question. Once played, many of these cheap game purchases turn into day-one full price pre-orders for the sequel or next game from that developer.
 
Top Bottom