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[call_kotaku]

Steam is only cheaper when you factor in the huge mega sales. That is what draws people to Steam and has the last few years. It's done wonders for the platform, but then you get a ton of people who simply wait for the Steam sale. It's happening right now as people wait for the Summer one to take place. DD is definitely great for older titles though since they don't take up shelf space.


But the thing here with price though is people cite GMG on Day 1 releases of examples of how Steam is cheaper, but they completely ignore you can get similar sales from various retailers for physical console games too. Had the Xbox One went through with its terrible policies, you could have seen similar sales from competition among retailers for the physical unlockable digital games. It would have been similar. I guarantee you when the Xbox One launches, there will be sales on all the games on Day 1.



I didn't say they chose it because it is closed. I'm saying people keep throwing around how open the PC but fail to acknowledge the fact that Steam is in fact a closed platform. With that closed platform comes restrictions. For a good chunk of PC gaming, you're stuck with Steam despite how open some people are trying to make it sound.



Disc authentication is just like a PC physical copy being authenticated. It's the same thing. In fact it did one thing better. The ability to deregister your copy and resell it. Where MS really screwed up was the check in policy and the messaging on how this all was supposed to work among other things. I'm not saying Steam isn't better, I'm just saying Steam isn't the open freedom that people imply that it is.



And this is a contributing factor on the low prices.

Steam being a closed platform on an Open OS is still significant and why an Xbox store will never do what Steam does, because Steam has to actively work to make people invested in the platform. There's a ton of stuff that Valve does which is manipulative and exploitative, because they've essentially gamified game-buying, but ultimately they need to keep people on the platform and happy because they have competition via other platforms or piracy. There's stuff on PC that's similar but get awful reputations that people avoid, like GFWL (or Origin to an extent), or abusive DRM like Ubisoft's from years back and securom, yet the reaction to Steam is rarely negative because Valve gives good incentives for consumers to buy into their storefront and provides a positive experience even if the end result is less consumer rights for the users. Microsoft wants the results without providing the incentives, which is why the backlash is not hard to understand at all.

Microsoft should be able to provide better online features without locking people out of used games first, because DRM should come as a consequence of new features, instead of as a way to eliminate existing practices for users to want to adopt it. MS's always-on plan was just a way to cut out price competition from second-hand markets, period, and if they had features they wanted to push they could've done that even with the used market in place if it ended up being a better value proposition. MS wasn't trying to build their own Steam, not even close.

 

[Fantasmo]

$60 is a lot of money. $20 or less isn't. I can start playing at that price without getting off the couch. And it also has a fine library, chat, and friend setup. And I'm not paying annually for it, these conveniences are all free.

I've got a better question, why would I want to go back to console gaming when I have a service like this available to me?

Besides the initial headache of building a PC, I've got all the best parts of gaming right after I turn it on.

"Oh look my friend is on, I'll message him (for free). I'll also enter a chat room (free). Oh look!! The game I've been looking forward to is on sale! And I can just click 3 times and I've got it at a steal! And my friends have been playing! I can't wait to dive in with them and invite them, and chat about it (for free, on the same service)!!

In comparison, consoles are a nightmare of epic proportions.

 

[Wiktor]

The main advantage of used games is cheaper hobby. Nothing else matters. People might argue how they want to "own what they bought" etc, but it's mostly bonus points. People care about used games mostly because it makes gaming cheaper.

Meanwhile on PC games are a lot cheaper. Be it through DD promotions or even pure retail places. Heck, the traditional pc market is Europe even in the richest countries like Germany the pc version is often 20-30% cheaper than console one. And the further to the east you move the bigger it gets. In Poland the difference can often go up to 100%. When I can get a brand new retail game on PC this much cheaper I tend to not care all that much about used games.

Also..there's a lot of games that do not have account-DRM, couple this with F2P popularity and it's really not hard to understand why the effect used games existence or not is so much smaller in PC market.

 

[Wiktor]

Remove consoles, remove piracy from the PC, etc. I guarantee you publishers aren't going to have a soft heart and let you play their games for $5

But smaller PC centric devs still will be keeping lower prices and doing such nice sales. Which will strenghten them even further against big competition.

A large part of why we're enjoying such ressurgence of pc gaming right now, especially the more classical hardcore part is because big boys moved primarly to console development. This collapsed their sales on PC market opening up the market for smaller developers. And it was a good thing, because the big budgeted pc exclusives were killing the market. That's why all the niche subgenres, like adventure, turn-based games or simulators were dying, while now they're doing well.

 

[SatelliteOfLove]

But smaller PC centric devs still will be keeping lower prices and doing such nice sales. Which will strenghten them even further against big competition.

A large part of why we're enjoying such ressurgence of pc gaming right now, especially the more classical hardcore part is because big boys moved primarly to console development. This collapsed their sales on PC market opening up the market for smaller developers. And it was a good thing, because the big budgeted pc exclusives were killing the market. That's why all the niche subgenres, like adventure, turn-based games or simulators were dying, while now they're doing well.

And those independant/small/mid-sized developers know well the Steam Sale Effect and the long tail via word of mouth.

It's a new world out there, and profitable provided you play by its rules.

 

[Wiktor]

And those independant/small/mid-sized developers know well the Steam Sale Effect and the long tail via word of mouth.

It's a new world out there, and profitable provided you play by its rules.

Yep. Steam sales not only bring a lot of money to developers, but they also increase the regular sales. Plus even people who bought your game during sale are preaching about it to their friends and might buy add-ons/DLC.

 

[patapuf]

My point is, without the consoles, those games don't get created or the budget for the game goes significantly down - meaning the cheap PC $20 sales people see aren't a function of Steam, but more a function of the fact that their primary platform is console...

People are giving credit to Steam for low prices - when they should be crediting the hordes of console buyers that end up making those games break-even, and piracy on the PC in general for multiplats that forces publishers to be happy with $5

Remove consoles, remove piracy from the PC, etc. I guarantee you publishers aren't going to have a soft heart and let you play their games for $5

But my examples were Strategy games and MMO's.... They are almost inexistant on consoles...

Also, it's not like all AAA games sell peanuts on PC. Battlefield, Elder Scrolls, Far Cry, Crysis ect. are still very much PC centric franchises and sell a lot of copies.

 

[REV 09]

Many different reasons, but one is that pc gaming couldn't give two shits about retailers. Since there isn't unified hardware that needs to be sold, the pc market doesn't have to be bullied by another needless middle man.

Lower prices > used games

 

[PastorOfMuppets]

My point is, without the consoles, those games don't get created or the budget for the game goes significantly down - meaning the cheap PC $20 sales people see aren't a function of Steam, but more a function of the fact that their primary platform is console...

People are giving credit to Steam for low prices - when they should be crediting the hordes of console buyers that end up making those games break-even, and piracy on the PC in general for multiplats that forces publishers to be happy with $5

Remove consoles, remove piracy from the PC, etc. I guarantee you publishers aren't going to have a soft heart and let you play their games for $5

That are absolutely a function of Steam (and it's competitors). It's that way because of how digital distribution works.

With brick and mortar, hell, even online stores that ship physical copies, someone has to pay for the those games to be displayed at a storefront. Either the retailer pays the publisher $X for Y copies of a disc or the publisher ships Y copies to the retailer and get payment upon sale. If the game sells gangbusters, it's awesome. If it flops, the inventory sits there and is chalked up as a loss (why do you think you can write off inventory on your taxes?). But it's also a loss of opportunity since every additional copy of Super Game Thing is taking away space from a much better seller like Call of Duty. This is not even factoring in the costs of shipping and pressing the disc which is pretty significant when it's handled in large volume. When you see games being sold for $10 at a Gamestop or Wal-Mart, the store is losing money on those games and are just trying to recoup the loss.

Digital distribution eliminates all of that. You upload one copy of your game to the Steam servers and from that copy, it can be sold to every user on Steam. There's no additional marginal cost for ordering more copies and once you cover production costs, all sales generated are pure profit. When you see a game being sold for $5 on Steam, that's because the publisher/developer has concluded that every possible user who is willing to buy the game at $50, $40, $30, $15 and $10 has bought it and now you are going after the $5 users and drum up interest in the future when the game goes back to $10, $15 and beyond. Once you send up your 30% to Steam on the sales, you keep the other 70%. Because the marginal cost of producing an additional copy of a game is 0, you can everything you sell after covering costs is pure profit and there's no opportunity for online retailers to "store" your game vs another because there's no physical space required to store it.

 

[tehrik-e-insaaf]

That are absolutely a function of Steam (and it's competitors). It's that way because of how digital distribution works.

With brick and mortar, hell, even online stores that ship physical copies, someone has to pay for the those games to be displayed at a storefront. Either the retailer pays the publisher $X for Y copies of a disc or the publisher ships Y copies to the retailer and get payment upon sale. If the game sells gangbusters, it's awesome. If it flops, the inventory sits there and is chalked up as a loss (why do you think you can write off inventory on your taxes?). But it's also a loss of opportunity since every additional copy of Super Game Thing is taking away space from a much better seller like Call of Duty. This is not even factoring in the costs of shipping and pressing the disc which is pretty significant when it's handled in large volume. When you see games being sold for $10 at a Gamestop or Wal-Mart, the store is losing money on those games and are just trying to recoup the loss.

Digital distribution eliminates all of that. You upload one copy of your game to the Steam servers and from that copy, it can be sold to every user on Steam. There's no additional marginal cost for ordering more copies and once you cover production costs, all sales generated are pure profit. When you see a game being sold for $5 on Steam, that's because the publisher/developer has concluded that every possible user who is willing to buy the game at $50, $40, $30, $15 and $10 has bought it and now you are going after the $5 users and drum up interest in the future when the game goes back to $10, $15 and beyond. Once you send up your 30% to Steam on the sales, you keep the other 70%. Because the marginal cost of producing an additional copy of a game is 0, you can everything you sell after covering costs is pure profit and there's no opportunity for online retailers to "store" your game vs another because there's no physical space required to store it.

You just proved my point. The reason the PC games are sold at such a low price is precisely because the bulk of their sales come from $45 per game they take in wholesale up front on the console side. Retailers like Gamestop make $1.4 billion in profits on used games yet end up with $400 million in net income - because they lose money on everything else in the store - including fronting the costs of the new games they place bulk orders for.

Digital distribution has impact - sure - but considering the cost of printing and shipping, the difference is at best $20 - and even then, the volume is potentially much, much lower because there are natural advantages of being inside a retail distribution network for discovery and promotion purposes, as well as the upfronting of wholesaler cash to the publisher that allows some level of risk mitigation. It hardly gets these AAA behemoth games down to $20 on Day One which is what people are assuming the impact of Steam is.

DD alone doesn't get the price down to $20. Piracy + console revenues allow PC games to be as cheap as they are. Piracy because users have an alternative to paying for a game under light DRM scenarios. Console revenues because of the nature of those platforms and the audience cultivated by their manufacturers generates huge amounts of sales, and the natural retail mechanics lead to generating lots of cash upfront when a game goes gold and orders are placed for it. If piracy and console revenues dissappeared, Steam games would be much, much more expensive. Sales would be less because the view might be to keep titles evergreen and the lack of retailer display and discovery. To keep the same level of production going, I'd imagine they'd be at least be as expensive as console's $60 price point (if not more to account for lower overall volumes since it isn't a given console gamers would all just move to the PC and start using Steam)

Hence my point: we can't make 1to1 comparisons between Steam and consoles, they exist in a system dynamic that feeds/contributes to each other, at least in the case of big so-called "AAA" multi-plat games. It's better for us to speculate how changing one side of the ecosystem would affect the other.

P.S.
Bandwidth is also very expensive. Delivering a copy of a game that is 20 or 30 gigabytes has cost associated with it, as does delivering a patch and maintaining free dedicated servers, etc. It isn't a super rosy scenario where Steam is some shining beacon of hope. Building a huge title for PC exclusively with light DRM is a very dangerous proposition.

P.P.S.
The whole "one business model to rule them all" (i.e. Steam) logical fallacy is used by the Peter Moore's of the world that helped kill off arcades because they just assumed that magically all the arcade players would just buy console versions of Sega games or that Nintendo players will just magically purchase an Xbox to play EA Sports. They use the same logic for killing off rentals, used games, and implementing online passes. Things exist in SYSTEMS, not A/B cause and effect scenarios. You mess up one part of the ecosystem, and another part of it gets hit hard. If you guys love Steam as much as you do, you better pray that all three consoles do so well that publishers don't care about a PC beyond porting the game, and are happy to dump it for $5 or $10 in a sale going forward because Steam sales are so inconsequential to their bottom line, so releasing it is a no-brainer for the extra millions it generates at relatively little or no cost. The minute PC games become a gigantic portion of revenue, publishers will respond in kind.

 

[RionaaM]

Yep. Steam sales not only bring a lot of money to developers, but they also increase the regular sales. Plus even people who bought your game during sale are preaching about it to their friends and might buy add-ons/DLC.

Or sequels day one, like I'm going to do with Hotline Miami 2 after having bought the first one at half price.

 

[PastorOfMuppets]

DD alone doesn't get the price down to $20. Piracy + console revenues allow PC games to be as cheap as they are. Piracy because users have an alternative to paying for a game under light DRM scenarios.

There's a couple of things that throw a wrench into your arguments.

First, there are already PC exclusives that sell for less on Steam despite having no console equivalents and I'm not just talking about F2Ps and small indie titles. The Total War series for instance has never been ported to the consoles. ARMA, never ported to the consoles. Civilization, never ported. These games are released on Steam for $50-60 and then go down in price pretty quickly. The reason prices are lowered is because they figure that everyone who will buy a game at $60 will buy it before and around the official release date. Then they sell it at $40 a month or two later to capture those people and then later at $20 and so on.

Second. Steam AND the developers/publishers make money regardless of whether a game is sold at $60 or $5. They just make less money if it's sold at $5. If Gamestop sells a brand new game for $5, someone (possibly everyone) is losing money in that proposition.

Hence my point: we can't make 1to1 comparisons between Steam and consoles, they exist in a system dynamic that feeds/contributes to each other, at least in the case of big so-called "AAA" multi-plat games. It's better for us to speculate how changing one side of the ecosystem would affect the other.

Agreed, Steam offers more and PC gaming is inherently different enough from console that people should stop saying that XBone's (old) DRM was "exactly like Steam." There are things that happen with PC games that simply don't occur on consoles. A game like ARMA2 for instance jumped onto the Steam top seller list years after it was released because of the Day Z mod. There's no equivalent of that happening on consoles.

If you guys love Steam as much as you do, you better pray that all three consoles do so well that publishers don't care about a PC beyond porting the game, and are happy to dump it for $5 or $10 in a sale going forward because Steam sales are so inconsequential to their bottom line, so releasing it is a no-brainer for the extra millions it generates at relatively little or no cost. The minute PC games become a gigantic portion of revenue, publishers will respond in kind.

That's not how it works on Steam though. Look at their top sellers right now. Four of the top ten games are $50 or more. An additional two are over $40. Valve doesn't release numbers but I would imagine the amount of sales generated is significant since there are 20 million+ users on Steam. It's not as if Skyrim was released, Steam users ignored it and then they sold gangbusters during the Christmas sale. It was more like it was released, sold gangbusters. Sold even more gangbusters during the Christmas sale and is selling even more gangbuster now that they have the legendary edition up even though it's $60.

Digital distribution has impact (Edited out for length) but It hardly gets these AAA behemoth games down to $20 on Day One which is what people are assuming the impact of Steam is.

Nobody said this. Digital Distribution allows companies to make profit at all price levels and relatively quickly.

 

[Wiktor]

Or sequels day one, like I'm going to do with Hotline Miami 2 after having bought the first one at half price.

Yep. Alan Wake and Mirror's Edge are another examples of games "saved" by long Steam tail.

 

[Wiktor]

. Piracy + console revenues allow PC games to be as cheap as they are..

But majority of pc games aren't ports from consoles. This market exist on it's own. And sells well in many price points. The advantage of pc as a platform is flexibility. You can get DD, you can make huge price cuts for promotions or you can release games cheaply through local distributors (fees paid to console manufacturers make this impossible), cheap enough to have a lot of people pick the legal copy up instead of pirating.
This is market that lives from PC centric devs. Those console ports aren't exactly setting sales charts on fire. So it's doubtful they would raise the price of all big budgeted games to 60$ even without consoles as very few games can get away with this price point on PC.

 

[Haunted]

But majority of pc games aren't ports from consoles. This market exist on it's own. And sells well in many price points. The advantage of pc as a platform is flexibility. You can get DD, you can make huge price cuts for promotions or you can release games cheaply through local distributors (fees paid to console manufacturers make this impossible), cheap enough to have a lot of people pick the legal copy up instead of pirating.
This is market that lives from PC centric devs. Those console ports aren't exactly setting sales charts on fire. So it's doubtful they would raise the price of all big budgeted games to 60$ even without consoles as very few games can get away with this price point on PC.

Good point. With consoles, it feels like smaller downloadable titles are complementing the "meat" - the traditional AAA retail game.

With PC, it's the other way around. The sheer amount of small experimental games, free flash titles, game jam products, other downloadables and proper indie games means that the AAA portion of the market is the complementary one.

 

[Fonz72]

Goddamn this video says great things! I couldn't agree more.

 

[boiled goose]

For me the answer is simple.

PC has unlimited BC.

When I buy a game, it is mine forever, no matter how many times I upgrade my computer. (if games have limited activations or intrusive DRM I do not by them)

With console digital content, this is not the case.

Also, the economics balance out, so I do not get the big push one way or the other. PC is the way it is for different reasons than what is happening now with consoles. If I cannot resell my games to recoup part of the cost, I will not buy them at full price but wait for cheaper prices. Publishers will get the same amount of cash from me in the end.

 

[Marty Chinn]

For me the answer is simple.

PC has unlimited BC.

When I buy a game, it is mine forever, no matter how many times I upgrade my computer. (if games have limited activations or intrusive DRM I do not by them)

With console digital content, this is not the case.

Also, the economics balance out, so I do not get the big push one way or the other. PC is the way it is for different reasons than what is happening now with consoles. If I cannot resell my games to recoup part of the cost, I will not buy them at full price but wait for cheaper prices. Publishers will get the same amount of cash from me in the end.

This is a false assumption. You are bound to whatever DRM and authentication method used on the game. This applies to any method of digital distribution that has DRM.

 

[anexanhume]

My favorite Jimquisition so far. He nailed it on every single point.

 

[ghst]

Many different reasons, but one is that pc gaming couldn't give two shits about retailers. Since there isn't unified hardware that needs to be sold, the pc market doesn't have to be bullied by another needless middle man.

Lower prices > used games

i wish this were the case, but many PC games are put out by the same publishers who are under retail's thumb, leading to bizarre situations like the PC-only company of heroes 2 selling for £40 on steam, while being available for £26 on amazon.

 

[RionaaM]

This is a false assumption. You are bound to whatever DRM and authentication method used on the game. This applies to any method of digital distribution that has DRM.

Didn't you read what he wrote less than 2 sentences away? He doesn't buy DRM-ridden games. And there are always cracks to bypass those authentication methods, if the need arises.

 

[Marty Chinn]

Didn't you read what he wrote less than 2 sentences away? He doesn't buy DRM-ridden games. And there are always cracks to bypass those authentication methods, if the need arises.

I did read. He said intrusive DRM. He didn't say he didn't buy games if they had any type of DRM. There's a difference.

 

[patapuf]

I did read. He said intrusive DRM. He didn't say he didn't buy games if they had any type of DRM. There's a difference.

Sure, but cracking say steamworks, is trivial. If steam ever goes bust I'll be able to play my games just fine. Cracking your own game isn't even illegal where i live.

 

[Marty Chinn]

Sure, but cracking say steamworks, is trivial. If steam ever goes bust I'll be able to play my games just fine. Cracking your own game isn't even illegal where i live.

Cracking is illegal where I live. It's a gray area at best. But if it comes down to cracking/piracy to circumvent DRM, then that applies to just about any medium under the sun.

 

[EatinOlives]

Cracking is illegal where I live. It's a gray area at best. But if it comes down to cracking/piracy to circumvent DRM, then that applies to just about any medium under the sun.

Not to open a can of worms but cracking DRM is far, far, far easier on PC than on the 360 and presumably the XB1.

 

[Marty Chinn]

Not to open a can of worms but cracking DRM is far, far, far easier on PC than on the 360 and presumably the XB1.

Is it? I don't partake in that, but I was always under the impression it was simply flash the drive of the 360 and you can play anything. Cracking on the PC would require you to find an individual crack for each title and hope that you're getting something that isn't malware in the process.

 

[EatinOlives]

Is it? I don't partake in that, but I was always under the impression it was simply flash the drive of the 360 and you can play anything. Cracking on the PC would require you to find an individual crack for each title and hope that you're getting something that isn't malware in the process.

You're highly unlikely to run into malware from cracks, because the places where you get cracks from are not the places where people pirate games in their entirety. There's a bit of a distinction there.

Cracking a 360 more or less involves turning your console into a "cracked" console. Don't take it online, etc. (probably don't want to pay for Live and get banned from it for playing on a cracked console either). On the PC it's basically replacing a couple of files and you've cracked that one game. No need to turn the platform upside down to achieve the same result. I don't consider cracking each individual game to be a bad thing at all for that reason. You only complete that process for the specific games you want.

 

[Marty Chinn]

You're highly unlikely to run into malware from cracks, because the places where you get cracks from are not the places where people pirate games in their entirety. There's a bit of a distinction there.

Cracking a 360 more or less involves turning your console into a "cracked" console. Don't take it online, etc. (probably don't want to pay for Live and get banned from it for playing on a cracked console either). On the PC it's basically replacing a couple of files and you've cracked that one game. No need to turn the platform upside down to achieve the same result. I don't consider cracking each individual game to be a bad thing at all for that reason. You only complete that process for the specific games you want.

I would think any type of hacking/cracking is certainly ripe for there to be malware. Often people do it for piracy purposes. Most people will just Google it and it's really a toss up if what you're going to get is legit or not.

As for cracking the 360, I assumed we were talking further down in the lifespan of the device. Why crack the DRM if the servers are still up? I'm talking about long term where there's no guarantee the servers will be up to authenticate your legally purchased content. The only reason to crack the 360 now is if you want to do piracy or homebrew. I also would certainly say having to find and verify each crack for each game is definitely a hassle and cumbersome.

 

[tehrik-e-insaaf]

There's a couple of things that throw a wrench into your arguments.

First, there are already PC exclusives that sell for less on Steam despite having no console equivalents and I'm not just talking about F2Ps and small indie titles. The Total War series for instance has never been ported to the consoles. ARMA, never ported to the consoles. Civilization, never ported. These games are released on Steam for $50-60 and then go down in price pretty quickly. The reason prices are lowered is because they figure that everyone who will buy a game at $60 will buy it before and around the official release date. Then they sell it at $40 a month or two later to capture those people and then later at $20 and so on.

Second. Steam AND the developers/publishers make money regardless of whether a game is sold at $60 or $5. They just make less money if it's sold at $5. If Gamestop sells a brand new game for $5, someone (possibly everyone) is losing money in that proposition.

Agreed, Steam offers more and PC gaming is inherently different enough from console that people should stop saying that XBone's (old) DRM was "exactly like Steam." There are things that happen with PC games that simply don't occur on consoles. A game like ARMA2 for instance jumped onto the Steam top seller list years after it was released because of the Day Z mod. There's no equivalent of that happening on consoles.

That's not how it works on Steam though. Look at their top sellers right now. Four of the top ten games are $50 or more. An additional two are over $40. Valve doesn't release numbers but I would imagine the amount of sales generated is significant since there are 20 million+ users on Steam. It's not as if Skyrim was released, Steam users ignored it and then they sold gangbusters during the Christmas sale. It was more like it was released, sold gangbusters. Sold even more gangbusters during the Christmas sale and is selling even more gangbuster now that they have the legendary edition up even though it's $60.

Nobody said this. Digital Distribution allows companies to make profit at all price levels and relatively quickly.

I agree with some of what you've said i.e. that there are premium sales on the PC. However, the wrenches you bring up don't fully refute the fact that piracy and console revenues drive the pricing model on Steam. Simply restating the mechanics of Steam sales and saying "gangbusters" and exclaiming how much "value" is inherent within the PC platform doesn't account for the reality that the majority of PC developers with big budgets could never make it back exclusively on PC/Steam at the current levels of pricing and generous price reduction. I accept there are exceptions to this rule - but if you'd like - I'd be happy to have a PM conversation about this with some financial modeling.

I also think you aren't fully understanding how retail works. The way you describe Steam sales is similar to how retail works - except prices are slightly higher to account for the physical package and shipping and retail margin (but comes with resale ability for the user). The flipside of the higher price for pubs is that they get the benefit of fronted money from wholesalers nor do you have the placement marketing/discovery aspect that is important. IMHO that is pretty important, particularly for large pubs.

Retail (primarily console) games come out and drop to 40 or 20 in a very short period (minus Nintendo which generally refuses to reduce the price of its software and has a track record of evergreen hits). I got MGS: Rising for 20 bucks two months after it came out for the X360. Relative to Steam - the only difference is the economics might be slightly different, but there are pros and cons to that which you are just glossing over.

My estimation is half the AAA multi plat games would be sent to die as PC exclusives at the budgets they have if Steam functioned the way it did. It's not just me saying this, there is a reason why formerly PC-exclusive developers got into the console game, and build their games with minimum spec around them. Even Crytek said this over two years ago saying that big budget PC games just aren't happening on the same level they once were because of the price deflation and expectations of PC gamers in terms of follow-up support - not to mention rampant piracy. In the 90s and early 00s, these same devs could make enough money on the PC alone to justify "big" budget games.

I think games like Total War are great, but its budget hardly comes close to AAA multi plat games. What did Total War sell? Less than 1.2 million for the absolute best selling SKU after lots of sales? You realize that the average cost of a AAA game is $30-40M right? For a game to generate profits you need to be at least 50% above its total cost of production provided a three year development horizon and cost of capital of 12% (which is frankly generous, my experience in the industry is that 20% is more appropriate for cost of capital which means they need to get 2x cost of production at a minimum in terms of net revenue).

Civilization has a long history on the PC and I think they had enough of a PC fanbase to make their money back. But the game itself didn't have a gigantic budget, and two games are a far cry from the exclusives the PC used to see. In a console-less and DD-only world, I don't believe people conditioned on $5 games on Steam are going to keep all these publishers afloat. It's going to require the industry to fundamentally restructure and many of these games become impossible. While I'd personally be in favor of that (you can read my earlier topics on this issue) - there would be a huge bloodbath.

BTW just so you know - I'm not a console fanboy, I'm primarily a PC gamer - and have been since the 80s - I understand and appreciate the implications of Steam - but it's just wrong to say that we haven't benefitted from the fact that consoles exist and generate premium revenue in the past eight years. I accept that the PC is hardly the primordial platform it once was, but that's fine because it means we get the best pricing and promotions being the tail end of the revenue distribution curve. That said, the minute Steam sales represent 30-40% of units - we are screwed - because publishers are going to finely tune and manage sales to ensure they are extracting higher revenues.

P.S.
The PS3 and X360 have a combined userbase of 160 million, and games like Tomb Raider sell 3.4 million globally fronted by wholesalers. Do you really think Steam's 20 million users are going to be so "gangbusters" in terms of premium sales that they can make it up - especially when the revenue generated per user is going to be far less on average?

But majority of pc games aren't ports from consoles. This market exist on it's own. And sells well in many price points. The advantage of pc as a platform is flexibility. You can get DD, you can make huge price cuts for promotions or you can release games cheaply through local distributors (fees paid to console manufacturers make this impossible), cheap enough to have a lot of people pick the legal copy up instead of pirating.
This is market that lives from PC centric devs. Those console ports aren't exactly setting sales charts on fire. So it's doubtful they would raise the price of all big budgeted games to 60$ even without consoles as very few games can get away with this price point on PC.

Not really sure what your point is. I feel like we are saying the same thing. I am essentially adding that console sales have a halo effect on multi-plat PC pricing. Without them, you wouldn't be getting Watch_Dogs or Assassin's Creed 4 on your PC for $15 bucks in January. I do agree that PC-only non-AAA ecosystem is healthy, and Steam/DD and the PC model enables that.

 

[PastorOfMuppets]

I agree with some of what you've said i.e. that there are premium sales on the PC. However, the wrenches you bring up don't fully refute the fact that piracy and console revenues drive the pricing model on Steam. Simply restating the mechanics of Steam sales and saying "gangbusters" and exclaiming how much "value" is inherent within the PC platform doesn't account for the reality that the majority of PC developers with big budgets could never make it back exclusively on PC/Steam at the current levels of pricing and generous price reduction. I accept there are exceptions to this rule - but if you'd like - I'd be happy to have a PM conversation about this with some financial modeling.


P.S.
The PS3 and X360 have a combined userbase of 160 million, and games like Tomb Raider sell 3.4 million globally fronted by wholesalers. Do you really think Steam's 20 million users are going to be so "gangbusters" in terms of premium sales that they can make it up - especially when the revenue generated per user is going to be far less on average?

Please, I'd love to see some financial models of the video game industry.

As for AAA-type games on PC, I think that they are pretty much unfeasible as exclusives in general - exceptions aside. Even Tomb Raider which you cite, was considered a failure by Square-Enix despite selling 3.4 million copies across multiple platforms. You have Halo, and Uncharted as the only franchises I think have succeeded in the last half decade as AAA exclusives. You can maybe make a case for Gears of War as well but the first two games were had costs of under $20 million so it falls off your AAA radar.

I mean, if you're making the argument that AAA games would not exist on PC without consoles, you pretty much have to apply that across all the consoles except for the WiiU which exists in it's only interesting little bubble. Of course there are exceptions like you said but I'm not going to mention them.

 

[RedSwirl]

Thing is, its taken the PC years and years to get to this point where people don't care about the Steam DRM. From cardboard discs, the certain lines on certain pages, to CD-Keys and beyond. At launch Steam was an awful pile of crap but they kept on updating it and now its pretty much the savior of PC gaming. Gamers gave them the benefit of the doubt and Valve ran with that.

Why has console gaming not been given ample enough time to prove if the DRM could work in a similar fashion? MS tried to start something and the backlash was massive.

The problem is console gaming doesn't seem to be learning from PC gaming's mistakes, but is repeating many of them.

 

[BigDug13]

This is a false assumption. You are bound to whatever DRM and authentication method used on the game. This applies to any method of digital distribution that has DRM.

He's not talking about when servers get shut down. He's saying that a game he bought on STEAM in 1998 still works on his current PC, while a console game that you bought in 1998 requires a really old console that is no longer being made, so you have to search for a functional used version of the hardware.

And while what you say is true, STEAM has been going strong for 15 years now with no signs of slowing down or shutting you out of your purchases.

 

[MrCunningham]

wait you're saying gamersgate sells a steam key and valve doesn't get a cut?

that's pretty weird

That's how it also works for Amazon DD, Green Man Gaming, and Humble Bundle sales, doesn't it?

It may sound weird that Valve doesn't get anything. But in the long run it is rather brilliant. Not only does this system bring more users to Valves Steam client, but it also gives more exposure to Steam.

 

[Marty Chinn]

He's not talking about when servers get shut down. He's saying that a game he bought on STEAM in 1998 still works on his current PC, while a console game that you bought in 1998 requires a really old console that is no longer being made, so you have to search for a functional used version of the hardware.

Well his statement is ambiguous at best then. Well even then, if you're talking about buying new hardware, that doesn't always guarantee it. Games all the time become incompatible as time moves on. Plus what if we change processors at some point and backward compatibility is longer the case? Mac OS went through a hardware change that caused compatibility issues. So even if you want to talk about about buying new hardware, that still doesn't guarantee that you'll get access to it forever. I take your point how PCs make it easier, and in theory consoles moving forward should make it easier based on their new hardware architecture, but to state you'll have access to them forever strikes me as not true.

And while what you say is true, STEAM has been going strong for 15 years now with no signs of slowing down or shutting you out of your purchases.

Just because a company has a strong legacy doesn't mean they can't spiral down fast. Markets change, technology changes, and companies can fall quickly. Even if Steam shut down, the problem is they would only have the rights to authorize Valve content, not the rest of the third party software. You're at risk just like Direc2Drive shut down when GameFly bought them and some content didn't transfer over.

 

[N2NOther]

Don't just make random things up to try n form an argument...
Most pc exclusive games are done by studios or publishers that don't even touch console gaming, most of those same games release for 40 euros or less and most of those games have sales within a year.

What you are saying is nothing but made up nonsense.

Pardon my ignorance but what games are PC exclusive these days? Like what AAA PC exclusives have their been on the past 3 years or so. The last one I know about is The Witcher and that's not reall AAA.

 

[Linkstrikesback]

There's always a choice about where to buy the game, and the fact that Steam doesn't get a cent from purchases made outside of the Steam store puts Steam into competition even with storefronts that sell Steamworks games.

Really? Surely steam must get something? Even if it's a tiny fraction, after all, bandwidth, etc. isn't free.

 

[Cloudy]

What game is that at 4:25 and 4:58?

 

[Zarx]

Really? Surely steam must get something? Even if it's a tiny fraction, after all, bandwidth, etc. isn't free.

More people launching the steam client and possibly looking at the storefront and buying something. Also just adding to the community in general.

 

[CambriaRising]

Really? Surely steam must get something? Even if it's a tiny fraction, after all, bandwidth, etc. isn't free.

Publishers get unlimited steam keys for steamworks games, AFAIK.

 

[Kikarian]

It's just a monopoly effect with consoles.

With no open platforms, resulting in no competition DRM will always be far superior on PC.

 

[Wiktor]

Pardon my ignorance but what games are PC exclusive these days? Like what AAA PC exclusives have their been on the past 3 years or so. The last one I know about is The Witcher and that's not reall AAA.

So as long as the game doesn't have $40mln development budget and at least another $40mln marketing budget it doesn't count as exclusive? Mmmkay.

 

[Wiktor]

My estimation is half the AAA multi plat games would be sent to die as PC exclusives at the budgets they have if Steam functioned the way it did. It's not just me saying this, there is a reason why formerly PC-exclusive developers got into the console game, and build their games with minimum spec around them..

Maybe, but as PC exclusives those games would cost the at most 30% of what they do on consoles. So while drop would definitely happen, it wouldn't be as apocalyptic as you think.,

 

[Sober]

Pardon my ignorance but what games are PC exclusive these days? Like what AAA PC exclusives have their been on the past 3 years or so. The last one I know about is The Witcher and that's not reall AAA.

I suspect the only real big ones would be the Total War games. CoH2 maybe?

 

[toastyToast]

PC gaming was pushed to digital because retailers barely stocked anything that wasn't a new release after 2004

Wonder why he didn't mention that

 

[DrSlek]

I suspect the only real big ones would be the Total War games. CoH2 maybe?

Upcoming exclusives? Rome II: Total War, Company of Heroes 2, ArmA III, DayZ standalone, Planetary Annihilation, Mount & Blade 2, Europa Universalis IV, Amnesia: A Machine for Pigs, and Wasteland 2 just off the top of my head. In the far future there's Project Eternity, and Star Citizen.

Few of these could be called "AAA", but "AAA" is ridiculous and mountains of cash isn't a pre-requisite for quality.

 

[Htown]

Really? Surely steam must get something? Even if it's a tiny fraction, after all, bandwidth, etc. isn't free.

They don't care.

They figure once you get on Steam there are enough other things for you to buy that you'll give them money for something eventually anyway.

 

[Wiktor]

Upcoming exclusives? Rome II: Total War, Company of Heroes 2, ArmA III, DayZ standalone, Planetary Annihilation, Mount & Blade 2, Europa Universalis IV, Amnesia: A Machine for Pigs, and Wasteland 2 just off the top of my head. In the far future there's Project Eternity, and Star Citizen.

Few of these could be called "AAA", but "AAA" is ridiculous and mountains of cash isn't a pre-requisite for quality.

AAA is budgetary requirement and most of MMORPGs met it, those are incredibly expensive to make.
Which is funny, because publishers still are willing to make AAA exclusives on PC on their own. When was the last time we've seen a AAA title exclusive to console that wasn't paid off my Microsoft or Sony? MGSIV?