Why are Valve's people saying pre-orders might hurt your sales – hypothesis

Being in the industry for some time now, I have a chance to observe the rise and growth of the Steam platform. Once an oversized DRM it became the central gear in the PC game publishing industry machine. Many games are released Steam-first and most of them never see other platforms (at least I don’t consider key-sellers shops as other platforms).

I think it is safe to say that Steam paid a major role in a raise of Indie gaming. And many do blame Steam for the not-so-recent shift in the indie market (called by the over-emotional crowd “indie apocalypse”).

Putting discussion about the end of the industry aside, it is obvious that many people do chain their lives and companies to this platform. Thus, so many articles trying to analyse all kind of Steam data. Valve not sharing much info about their algorithms is not helping here, fuelling the need for predictions and speculations.

I decided to jump on this train, as I was always curious why are Valve’s representatives discouraging developers and publishers from going with pre-orders. For me that is quite counter-intuitive, as on consoles it is ever-existing part of the publishing strategy and quite an important marketing tool.

Recently, thanks to Ghostrunner’s release in October, I had a chance to observe from the front seat how Steam pre-orders work. As any other person, I had some observations, some ideas and I would like to share one of those with the wider community – hoping to either confirm or confute my hypothesis.

Steamscore

But before I go there, I would like to point out one of the most important Steam features/flaws, which for me seems like common knowledge but many people are surprised by it. The thin is, Steam is like Amerigames: there is lots of luck and the more successful the game is the more support it gets from the platform. After getting to the top10 of bestsellers the game is visible literally everywhere. But if a game falls out of top50 its sales plummet to an almost invisible stream.

Of course, many people speculate how the top sellers list works. Few years back there was a discussion in the Steam community and someone from Valve gave some explanation – however given constant changes in policies and everything in game business, after a few years we might expect that things work differently. One thing is sure – the top sellers list is built based on game performance over some time. So, the more copies of the game sells and/or the more money the game earns the higher it is on the top list.

Let’s say that there is a steamscore based on the game copies sold and/or money earned and the higher this steamscore is, the more visibility the game gets.

Disappearing Ghostrunner

When we (together with 505 Games) started preparing the Ghostrunner’s release, we decided to go with pre-orders on Steam and other platforms. The campaign was designed, special bonuses offered, announcements sent. I must admit that we were quite happy with the results. The game was climbing the top sellers ladder, ending at the top2 position just before the full release.

And then it disappeared.

You can imagine my feeling (first time doing pre-orders on Steam), when my phone was ringing off the hook with  questions: where is our “hit title” because nobody sees it in the top10 anymore.

The game reappeared, somewhere around 50th position. Climbing at a quite decent pace to the top spot overnight (We are located in Poland, Europe, so for us it was night but in the USA it was a day).

Conclusions and hypothesis

What did happen? Looking from the perspective I think that was an issue that Valve’s people were warning us about (or one of those issues). It looks to me that Steam platform created two separate (internal) products for Ghostrunner (as it does for any game doing pre-orders). One for the “official release” and one for the “pre-order”. And when the release finally happened – the game was swapped.

Because the new product had 0 copies sold, it went down on the top sellers list. Its visibility was switched off until it got back to top10.  And that only happened when the first sells were registered.

Mid-term impact

I think that this explanation is reasonable and aligns with what we know about Steam. However, there is one more conclusion coming out of this analysis. If you have a successful pre-order campaign, you must prepare for smaller sales.

Why? This is coming from what I pointed out above. Steam gives games visibility based on the steamscore. Because a big chunk of sales (pre-orders) were not counted by Steam algorithms the steamscore of the game is lower, so every time game is being considered by those algorithms for any kind of visibility, it starts from a lower position than other titles with similar sales numbers but without pre-orders.

Of course, if you are CD Projekt releasing Cyberpunk2077 and you have over 1M pre-orders, and then over 1M first-day sales, and then after the next few millions of copies in the following days – those pre-orders don’t have such a big weight. But if you are an indie, hoping to sell 50k copies including Indie Gala flash sales, and you do one-year-long pre-order campaign selling (let’s say) 5k copies, that would definitively affect your post-release sales.

It all comes down to math and psychology. Pre-orders are usually made by the game's strongest fans. Those people who are usually expected (hoped) to buy the game over the first days after the release. When the game is out, there are those few people less ready to buy on day 1. But because pre-orders do not count, steamscore is starting from 0 with much lower potential for the sales on the first day. If your target group allows you to expect around 10k copies sold on the first day, but you had around 5k copies sold in pre-orders, you might find yourself selling less than those 10k copies.

What is more – the smaller potential, the slower growth. If the potential of the game for day 1 sales is 10k it will probably get to top10, but it would take several hours to get there. During those first few hours there is almost no visibility on Steam for the game. Because of that game is climbing up only based on wishlists and the traffic/interest built by you (or your publisher) outside of Steam.

The game that never makes top10 might not have satisfying sales numbers. And if it is in the top10 only for an hour or two during the post-release peak it might not be enough to change anything. Of course, for some it might be enough. And others might get post-release sales so huge that pre-orders won’t matter. Anyhow, at least in my opinion, it is worth considering how pre-orders might affect your sales.

Is there anything more…?

What scares me the most however, is that nobody really knows how Steam works. Do algorithms look into total sales numbers? In other words, is steamscore dependent only on recent sales or maybe also on total sales?

Maybe the answer is out there. Or maybe there is no answer or some crazy one (like 42). But one wonders…