Selling Sales to the Game Industry

In light of our recent post examining the devaluing of the game market, it's important to talk about the sales mentality that has swept across the Game Industry. Despite gloom and doom from major developers and publishers, sales have done several things to improve the industry.  

For today's post, we're going to examine why sales are important, who they really appeal to and why no matter what happens to the state of the industry, sales are here to stay.

The Start of Sales:

We've talked about this on previous posts so we're going to quickly reiterate this part. Digital sales became popular thanks to Valve with the Steam Summer Sale: offering massively discounted titles for a period of time.

Being a digital storefront as opposed to retail allowed them the ability to quickly and effortlessly control their pricing and made it easy to make sure that the pricing was correct.

Since then, just about every digital store front now has seasonal, weekly and daily sales to motivate people to buy games cheaper. For gamers this has been a good thing as it means getting more games for less, but many developers are debating whether or not sales are good for the industry.

The Sales Detractors:

Some developers feel that sales do more harm than good to the industry. A recent example would be Jason Rohrer the developer behind the game: The Castle Doctrine. In a post he made on Gamasutra, he talked about how he felt that sales punished the true fans of games.

Reason being that the faithful fans would buy the game day one at full price and would be punished for spending that money. As opposed to someone who could just wait a few months and get the game for a discount. Because of that, he decided that The Castle Doctrine would have a discount before the game was released for early adopters and then remain at full price from then on no matter what.

Sales have also conditioned a lot of gamers to not buy games on day one and instead wait for the eventual sale. We've seen many games go on sale within one month of release and gamers are taking notice. The only exceptions would be games from major developers like Blizzard, Nintendo and EA, whose games retain their value for a very long time.

As we've talked about on a previous post, sales are one of the main reasons behind the devaluing of the Game Industry.

But with that said, sales are not going anywhere soon and serve an important function in increasing your fan base.

Raising awareness:

Any popular game series has its hardcore fan base: the people who will buy the game day one at full price. These are the people who sales don't mean anything to them as they either love the series, game design or just want to support the development.

The reason you put your game on sale is to attract other people: Gamers who wouldn't look at your game otherwise or aren't sure if they're going to like it. Just like with any consumer product: The higher the price barrier, the harder it is to get someone uninitiated to buy it.

Steam's sales events are massive and help bring awareness and profit to the developers who participate.

Getting below $10 we start to hit the impulse threshold for a lot of consumers. This makes it easier to sell them on unique games or series they wouldn't touch anyway.

Bringing awareness can also be for older titles that have been updated. Another sales strategy is to have a promotion for an older game that has been continually updated via DLC and have a discount on the game. And the DLC as a way to either bring older people back to the game with the new DLC or to show value to someone who hasn't played the game yet.

Making Profit over the Long Run:

Anyone in the Game Industry or any product driven industry will tell that products have a shelf life or how long they will remain visible in the public eye. As more video games are being released on a weekly basis, the amount of time a new game has on the front page of a store is short. Mobile designers for instance have on average a few days at most before the flood of new apps pushes their title off the front page.

The lack of visibility is why AAA developers are so focused on immediate sales -- either day one or over the first month as they know that the more time that goes by, more people will simply forget and move on to the next big game.

The major advantage of sales is that it provides another visibility event for a game that may have came and went. While banking on sale events to make a profit on a game is not a smart business plan, it can be enough to turn a game that was a lost into a winner.

The reason is that again, you are trying to attract people who weren't interested in the game at its original price. So in the process they will either simply buy your game or become new fans that will support your next project.

The Market has decided:

And last but not least, the biggest reason why we're not going to see sales stop anytime soon is that the market has decided that they want it. At this point thanks to cheaper and more frequent game purchases, the consumer market has voted with their wallets that they want sales.

The first official sale from Steam was in 2009 which means that we are over five years of the industry shifting towards the sales model. With so many people who are now fans thanks to these sales, the industry can't go back to the way it was before without suffering a consumer backlash.

That leaves developers with the challenge of figuring out a way to make use of sales while still providing value to their games and it will make or break a lot of developers this decade.

(Reprinted from the Xsolla Blog)