Steam sales: How deep discounts really affect your games

Valve's Steam sales have always proven a great time for consumers to score some cheap PC games, but over the past several months, there's been some debate over whether these promotions are good for game developers. Some have argued that the major discounts devalue games, and end up hurting the industry in the long run. But according to a number of developers that took part in this year's Steam Summer Sale, that doesn't seem to be the case. The teams who've discounted their games during this or previous Steam sales have found that the promotions not only attract more sales, but also generate more revenue and breathe new life into aging products. Runic Games CEO Max Schaefer, for instance, tells us that while it's been almost three years since his studio launched Torchlight, Valve's Steam promotions have helped the game maintain healthy sales to this very day. "We find that we get several thousand percent increases in units and revenue on the days of the Steam sales, and unit sales are usually about double the normal for a few weeks after the sales are over," he says. This year's Summer Sale (which ended July 22) was particularly noteworthy for Runic, as it helped Torchlight hit its second biggest day ever in terms of overall unit sales -- not bad for a game that came out in October 2009. And Runic's case doesn't seem to be an anomaly; Supergiant Games' Amir Rao tells us that these Steam sales have proven more lucrative than his game's initial debut. "A lot of times we judge the success of a game -- and predict its sales -- by looking at its launch day numbers. Steam sales have made that delightfully impossible. Our launch day [for Bastion], which we viewed as very strong, is only our fifth best day of sales ever on Steam due to the power of the promotions we've had the opportunity to participate in," Rao says. According to indie developer and Super Meat Boy co-creator Edmund McMillen, these promotions can increase sales to an almost staggering extent. His 2D dungeon crawler The Binding of Isaac, for example, saw sales multiply by five when it was marked down by 50 percent, and once it hit the front page as a temporary "Flash Deal" (for 75 percent off), sales multiplied by sixty. Believe it or not, those figures aren't all that unusual. Valve's director of business development, Jason Holtman, says plenty of developers have seen their sales increase exponentially, giving them a very healthy boost in revenue. "It's not uncommon for our partners to see [a] 10-20 times revenue increase on games they run as a 'Daily Deal.' Some titles really take off and see as much [as a] 70-80 times increase in revenue," Holtman said.

Is there a catch?

Despite the fact that Steam sales mark games down to just a small fraction of their usual price, the developers we spoke to don't think these promotions are devaluing games at all. Based on the data they've seen, Steam sales have only been a good thing for their business. Sure, players will jump on the chance to buy a game for $2.50, but the developers have found that Steam consumers are still perfectly willing to pay full price for a game once the sales are over. The "race to the bottom" we've seen on the mobile markets just doesn't seem to be there on Valve's platform. "While some may argue that [major sales] contribute to an industry-wide price deterioration problem -- where smartphone games have made people unwilling to spend more than $5 on a digital game -- [Steam sales] are a bit different," says Ken Berry, the executive VP of XSEED Games (Ys Origins, Ys: The Oath in Felghana). "Rather than looking at it as a 'lost sale' when people wait for these Steam discounts, I think it needs to be viewed as reaching out to a new customer that never would have purchased your game otherwise." Valve's Holtman says he's never noticed any negative consequences from these promotions. Instead, most games still see positive trends in their sales numbers well after the discounts are over. At the very worst, a game's sales will just revert back to what they were before the promotion began. And of course, it's not only about generating more sales. Sometimes, you just want to make sure that people are playing your game in the first place, so they pay attention when you're building excitement for whatever comes next. As Toxic Games' Daniel Da Rocha (Q.U.B.E.), puts it, "[When people] have the opportunity pick up a copy for next to nothing, this only grows the fan base around the game, so when we release new content or future games, we have a large community already there to market to." For those still looking to reap the benefits of these sales, you're in luck, as Holtman says "there's no secret handshake a developer needs to know to get their title on the front page [during a sale]" – all you really need to do is put out a product that consumers want to play.