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At Dice 2009, Gabe gave quite a speech on Steam, PC gaming, DRM, customer relations and how to sell buckets of games!
The details of his speech can be found in various places, but I want to draw attention to some key points here.
- DRM hurts more than it helps, because Pirates have better products than many game companies
- Steam ‘sales’ sell so much software it hurts the brain, and don’t seem to irritate customers who bought beforehand
- Keep your customers close, and make gaming a service, not a 3 yearly one night stand
Point 1 is well understood by many now, or so I hope. It also applies to TV and DVD content! Gabe admits his DRM comment is based on anecdotal evidence, but he is a smart cookie so I’m inclined to believe him on this.
The data behind Point 2 is truly frightening… check out this (taken from the g4tv coverage):
Last weekend, Valve decided to do an experiment with Left 4 Dead. Last weekend’s sale resulted in a 3000% increase over relatively flat numbers. They sold more last weekend than when they launched the game. WOW. That is unheard of in this industry. They beat their launch sales. Also, they snagged a 1600% increase in new customers to Steam over the baseline.
Worried retailers, fear not. The weekend sale didn’t canabalize sales from retail. In fact, they remained constant. Well, constant isn’t a 3000% increase, but it’s still pretty good, right?
Looking at a third-party game, they saw increases of 36,000% with a weekend sale. Oh. Em. Gee. Okay, Gabe is starting to convince me that PC at retail is going to die very soon.
During the Holiday sales:
• 10% sale = 35% increase in sales (real dollars, not units shipped)
• 25% sale = 245% increase in sales
• 50% sale = 320% increase in sales
• 75% sale = 1470% increase in sales
At 75% off, they are making 15% more money than they were at full price.
That’s truly amazing stuff, and I bet a few bricks and mortar retailers are a bit nervous about how slippery their control on gaming ‘sales’ is becoming.
Point 3 has been obvious to multiplayer gamers for year. However, it is good to see that games companies are beginning to work out how to maintain the relationship even with single player focused games (DLC being the key).
Good on Valve for moving the games industry forward, and I can’t work out whether I want them to dominate the industry, or whether other digital providers should catch up. It’s always simpler when you have 1 ‘choice’, but power does corrupt… look at MS.
Discuss here
- Scoobs
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