Sales, Discounts and Deals: Game Price Culture on Steam
Talk to anyone who plays games on PC and they’ll likely have a tale of a great deal they got during the Steam Summer or Winter sale, a period of time where a bevy of games on the Steam digital games distribution platform are offered at sometimes ludicrously low prices. I’ve even found myself in this situation. During the last Steam Summer sale, Chucklefish Games’ Stardew Valley was on sale for 50% off, and rather than just buying it for myself, I also purchased an additional copy for a friend in hopes of playing the soon-to-be released multiplayer together.
Additionally, outside of Steam itself, there are several websites where Steam users can purchase codes redeemable on Steam for massive discounts. One of the biggest is Humble, a site that offers “Humble Bundles.” Humble Bundles often contain a group of themed games together that a user can name their own price for, with a portion of their purchase going to charity. Following this trend, several other sites offering similar incentives, with a slightly different spin on the formula have popped up.
In an effort to fully understand where discount culture on Steam originated, I spoke with a few different prominent figures in this field to understand their point of view on the situation. The first person I spoke with was Alex Childs, CEO of “Last Best Offer” or “LBO,” a newer store on the scene (https://www.lbostore.com). Rather than offering traditional sales, LBO gives buyers the ability to “offer” a price, with an algorithm determining whether or not the offered price is fair. Speaking more in detail, Mr. Childs described the algorithm as such:
“When you make an offer on LBO, your offer gets compared to that publisher minimum as well as what other users have been paying for that same title. By looking at what all other users are paying for the same title, we can determine a ‘reasonable price range’ for that game. Should your offer fall into that price range, it will be accepted. If not, we will give you a counter offer that is on the upper end of that range. So if you come to the site and offer $0.01 on everything, you will almost certainly get the counter. That means you will still get a good deal, but you could have got a better deal just by offering what you are really willing to pay.”
“The result is that everything on our site is always on sale. Unless you offer full price, you will never play the list price for any title on LBO.”
LBO puts the power of discounts in the hands of the buyer
A new approach, putting the power of the discount in the hands of the consumer. As LBO is new on the scene, only time will tell if this is an effective way to sell Steam games to players. It’s not difficult to understand however, that this is a logical enterprise to launch in the cloud of a deal-based Steam price culture. In speaking about this culture, Alex seemed pretty positive on the subject, stating:
“Sales are a win-win for everyone. As a storefront, we take a percentage of each sale, and developers and publishers can use sales to increase interest in titles that may be mid to late in the product life-cycle.”
A situation that works for everyone seems like a good business to be in. With everybody involved in the sale, from the developer, to the publisher, the seller, Steam, and the player benefitting, it would appear to be a never-ending cycle of good things happening for everyone. There’s more eyes on more games, and more people are getting to play games that they may not normally be able to afford or willing to pay full price for.
With that in mind, though, it can be a bit difficult to figure out what to play. Most gamers have likely encountered the common dilemma of not knowing what to play, despite having a massive library of games staring them in the face. As such, Steam has seen a rising market of “curators,” individuals and organizations who suggest games to consumers based on their interests in genres, developers and other qualifying criterion.
One of the more successful curators to rise out of the recent boom is Chrono.GG, (https://chrono.gg/), a site that offers only one game every day, often at a significant discount. I spoke with Justin Sacks, the CEO of Chrono.gg to get a greater understanding of how their strategy works.
In our discussion, he mentioned that there are over 90 games released on Steam every week, and that it can be quite difficult to find a game that’s right for you. He mentioned that at Chrono, their focus on one game at a time guarantees a seal of approval from Chrono, and that the buyer can trust that they’re getting a quality product. Based on this, I was curious about the quality that Chrono.gg has in place. Mr. Sacks detailed the high bar of quality they have for their games, noting that they can’t have any major bugs or issues and should run on a majority of PCs, amongst other criterion. Finally, he noted:
“In featuring one game each day, we put our stamp of approval on it. If it’s a genre you’re interested in, you’re pretty much guaranteed to get something you’re going to like.”
Chrono.GG offers one deal, one game, every day
Personally, I can attest to this firsthand. Shortly after discovering Chrono.gg through their sponsorship of this year’s Awesome Games Done Quick event, I came upon Mini Thief, a stealth game with a pixel based art style by indie studio Tommah Games. As a fan of stealth games, and with a price of something like $2, I was sold immediately. Through this process, I discovered, played and enjoyed a game I wouldn’t normally had heard of.
As additional incentive to visit the site daily, Chrono.gg offers Chrono Coins, a form of digital currency that can be spent in the Chrono shop. Visitors to the site can claim a small amount of coins every day, once a day, while obtaining larger amounts of coins by collecting every day consecutively in streaks. Coins can then be spent in the Chrono Shop for a varying selection of games that are offered until they sell out of the allotment offered by Chrono. When I asked about this, Mr. Sacks noted,
“Chrono.gg buys the games that are offered in the Chrono shop and eat them as a marketing cost. In doing so, we’re offering gamers another incentive to check out our site every day.”
So, at this point, on top of regular sales and discounts, we’ve got on-demand deals and games being offered for free on a frequent basis, based on only a cost of persistence. As mentioned earlier, it’s a win-win for everyone, right?
On the opposite side of the equation lies Sergey Galyonkin, creator of Steamspy.com, a site that extrapolates data on Steam game sales and ownership based on a selection of user profiles. It’s important, and is noted on their website, that data from Steam Spy isn’t always 100% accurate, but it still provides a good basis for information pertaining the sales numbers of games on Steam.
Mr. Galyonkin has made the claim that indie game developers are selling their games for too cheap. He notes that the average price of an indie game in 2017 is $8.72, with that price being nearly cut in half during the last Steam summer sale. Galyonkin has stated that indie developers need to start charging more for their games. He justifies this as such:
“Some developers of good games will go out of business because they can’t sustain it. [frequent discounts]”
In discussing the general environment of sales, discounts and deals on Steam, Galyonkin has a strong opinion, stating:
“I think it’s because discounts are such a powerful marketing tool, people tend to overuse it. Can’t get people to pre-order? Offer a discount! Can’t move enough copies to meet the quarterly plan? Discount it is! Discounts are the marketings equivalent of over-the-counter painkillers.”
steamspy presents data on game sales and trends on Steam
While some may see the constant sales, discounts and deals on Steam as a win for everyone, it’s important to note that some viewpoints may play counter that. However, in thinking about this, I looked back in my chat with Alex Childs and LBO, who made an interesting point.
“It is also in the publisher’s best interest to have as many people as possible playing their games. In an age where games are increasingly becoming franchises, a customer missing a single title could have disastrous effects down the road for a given IP. Which is why it is incredibly important for publishers to keep consumers invested in an IP, even if that means discounting it significantly. “
Additionally, in my chat with Justin Sacks about Chrono.gg, we looked at the culture of deals and discounts as an inevitability. Sacks noted that the games industry has evolved in waves in terms of how development and marketing are coordinated with one another. In it’s current stage, players of Steam games want some outside input and incentive to play new games. As such, the discount isn’t just a discount, but also a marketing cost for the developer and publisher.
As cheesey as it may sound, I think it’s important to take the Spider Man point of view here, and recognize that with great power, comes great responsibility. There are many outlets for game developers the release games at a discounted price, and players are ready to buy a game at an appealing price tag. However, as a developer, one should be careful not to go to the well too many times, as offering deals and discounts may create a cost that far overruns the potential benefits.
In the interest of full disclosure, I (Cyrus Burris, the author of this piece) am frequent user of Steam Spy for research purposes, as well as a frequent customer to Chrono.gg and LBO.