Valve: Online punters

[+Audioboxer Subscriber²]

Valve business boss Jason Holtman has told the Montreal International Game Summit that a direct digital system like Steam means game prices can go up as well as down and people will keep buying. "In a connected market, you can shift prices up and down, and people don't care," he said.

"You can change prices instantaneously. Customers are incredibly sensitive to pricing. You can adjust the price by five dollars, or a dollar, and you can see the demand curve shift."

Holtman said that in a traditional product model, once your price drops it's only ever going one way.

"You launch at $50 or $60, then you sit around for a few months until someone says, 'It's time to go to $30,' and you can never go back," he added.

"Then someone says, 'It's time to go to the Platinum Series at $20,' and then you're praying it stays there, and then eventually it drops off and it's gone."

Holtman voiced the now-familiar Valve mantra of seeing games as services, saying TF2 has been updated 97 times in the past two years.

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Source: http://www.vg247.com/2009/11/18/valve-onli...ed-up-and-down/

He has a point digital distribution when done right with a good sale is awesome - See TF2 going on sale for $2.99 a few times. You can do that then bang it back up to $20 or whatever. Obviously can't really do that in retail - Not just because a 24 hour sale is retail isn't practical, but because retailers would never bang something down to the likes of $2.99 just for the sake of a sale (would have to be to get rid of stock).

So yeah it's good for games as time goes on, where in retail game prices usually stick for months, sometimes years (see MW), online there can be sales and what not. Problem with online though is at launch, prices are usually rigid and near RRP, where as retail fight over launch pricing to attract customers to preorder with them.

[+Majesticmerc MVC]

He has a point digital distribution when done right with a good sale is awesome - See TF2 going on sale for $2.99 a few times. You can do that then bang it back up to $20 or whatever. Obviously can't really do that in retail - Not just because a 24 hour sale is retail isn't practical, but because retailers would never bang something down to the likes of $2.99 just for the sake of a sale (would have to be to get rid of stock).

So yeah it's good for games as time goes on, where in retail game prices usually stick for months, sometimes years (see MW), online there can be sales and what not. Problem with online though is at launch, prices are usually rigid and near RRP, where as retail fight over launch pricing to attract customers to preorder with them.

Exactly. It can't work like that in retail since too many people need paying. I don't know what the "cost price" (i.e. the price that retailers pay) for a TF2 disc is, but its sure gonna be more than ?2.99. Valve don't have any shipping or media costs, simply bandwidth, therefore they afford to make such drastic pricecuts.

[Jimmy0]

All Valve need to do now is have a more competitive launch price, because as you mention the price is usually near that of the RRP, so you can generally always find it cheaper in a retail shop.

[t_r_nelson]

I like the idea of special pricing and package deals they can offer for a limited period of time. It means sometimes you can find a really good deal on a game.