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The Misconception of Sales on the Game Industry

Many publishers these days cry foul over sales as a threat to the industry. But a basic economic principle and my "secret buying strategy" says otherwise.

An unusual side effect of the rise of digital distribution is how prominent game sales have become. This trend started out with Steam having discounts during the holidays and other major events. Eventually this expanded to daily, midweek and weekend sales. Since then, the act of reducing a game's price has moved to the console and handheld markets.

Checking on, with exception to big name titles (Mario, Halo, Diablo, etc), many games do not retain their full price for long. Their price will steadily be discounted, or the game will be a part of some kind of sale event. Lately there have been discussions about the effect these sales are having on the gamers’ mentality. Some people believe that sales are hurting the industry as it is conditioning people to wait for sales to buy games.

Personally I find that idea to be BS and the reason has to do with basic economics. Specifically with one quote in particular by economist Jonathan Reeves:"Something is only worth what someone is willing to pay for it." What people in the game industry need to realize is that just because you price your game at $50 doesn't mean I'm spending $50 to buy your game.

Josh Bycer's guide to buying games:

This next statement is going to sound weird but hear me out: I may spend a lot of money on video games, but I don't spend a lot of money on video games. Most if not all of my disposable income in some way goes toward playing video games, and I could easily spend two to three hundred dollars per month on games. However, while I may spend that amount per month, I stretch my dollar out by not buying games at full price.

A regular consumer who buys games at retail price ($50-$60) may over the course of one month only buy 2 or 3 titles. I however, with waiting for sales may end up with anywhere from 10-20 games per month. Besides sales, I also buy indie titles which are also normally less than a retail game.

My secret is as follows. I do not spend more than $30 on any game, regardless of platform. There are only 3 exceptions to this rule:

1. If it's a game that I'm absolutely dying to play- ex: X-Com: Enemy Unknown.

2. If it's a game that will not drop in price for a long time- ex: Mario Galaxy 2, Diablo 3

3. If it's a game that will become rare before it becomes cheap- ex: Shin Megami Tensei series.

Thanks to these rules and keeping my eye on sites like that track sales, it's easy to keep track of major sales. Because of my system, my spending habits vary per month based on what is on sale. I may not buy anything for 2 to 3 months, and then buy 30 games in one month (thank you Steam Summer Sale of 2011.)

By keeping to this, it has allowed me to play a variety of games that I would not have played otherwise. Picking out games for $10 or less, means that I don't have to worry about blowing a huge amount of money on a game that I may hate. And there were plenty of times that I found an amazing game on sale, that I would not have even glanced at if I was going to buy it for $40 or more. But enough about my spending habits, let's get back to that quote and the game industry.

How Dollars and Cents Add Up:

The perceived thought from publishers and people in the industry, is that they're losing money because of people waiting for sales. My argument is that sales are not hurting the industry and that quote is exhibit A.

The value of a game is not something that is truly decided on by the developer or publisher, but by the consumer. The Call of Duty and Madden fans who buy every sequel, I'm willing to bet would not wait five months for a sale. To them, $60 for their favorite series is a no-brainer. But for someone like me, I wouldn't even glance at one of those games unless the price was 20 or below.

The beauty of these sales is that they expand the fan-base and give a game that may not have sold all that well, time in the spot light. Both Arcen Games and Introversion Software have said in the past that being a part of a Steam Sale, gave them more sales with their titles than ever before.

When publishers say that sales are costing them money, they believe that instead of getting $60 from someone, that they are now only getting $20. However that is not the case as it is instead of getting $0 from someone, they are getting $20.

For every genre there will always be dedicated fans who buy games on day one or week one. But with the # of people playing games expanding there are plenty of people who want to try new games. However, they don't want to gamble $60 on if they are going to like the game or not. Instead of rejecting game sales, publishers should be embracing them, especially on niche titles that wouldn't have had a huge fan base to begin with.

At this very second, I have a list of games that I check out every few days to see what their price is. And when it hits that magical number for me, I'm going to buy them. In the meantime I have plenty of games to play while I wait it out.

Josh Bycer

Reprinted from my blog: Mind's Eye 

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