Steam prices! Grey key sites! and the I love/hate developers thread - Enter if you dare!

[FoxEye]

If people aren't willing to pay what they're charging then they'll go out of business, grey market or not.

And again, we have the people who were (historically) willing to pay £35, but no longer have to, since the game is on a grey key seller for £20 from Day 1.

This is where the revenue loss is realistically occurring. Perhaps not from those who categorically won't spend more than £15 on a game.

I'm willing to bet there are a lot of people (esp kids) who have the money - and inclination - to buy lots of games at £35, but no longer have to, since the grey market give 50% discounts from release day onwards.

 

[GoogalyMoogaly]

Hmm, OK so the programmers, artists, engineers get paid a wage. And got paid that before the game was released.

So then if the studio goes out of business nobody loses, right? The coders, etc, will find/found another studio, get paid for making another game... and then if that studio makes no money and goes bust, still nobody loses...

...and this will just keep going on and on, and new studios won't struggle to find the investment necessary to start up, because... erm... logic?

And for all the people who say studios are giant, greedy, money-grabbing profiteers, are you just making sure EA/Ubi get less of your money, or are you using grey key sellers for all your games?

Why will they go out of business? They're still making a profit on every key sold. Unless you think they're selling the cheaper keys at a loss just so people in less wealthy nations can play games? If they were selling at a loss in those places business logic would suggest it's cheaper not to sell there at all.
Would they make less profits if everyone used the grey market sites. Yeah, no doubt. Would they make less profit if everyone waited until the game was on sale? Yeah, no doubt.

 

[FoxEye]

Why will they go out of business? They're still making a profit on every key sold. Unless you think they're selling the cheaper keys at a loss just so people in less wealthy nations can play games? If they were selling at a loss in those places business logic would suggest it's cheaper not to sell there at all.
Would they make less profits if everyone used the grey market sites. Yeah, no doubt. Would they make less profit if everyone waited until the game was on sale? Yeah, no doubt.

It doesn't work like that. If a game costs £10 million to make, then how are they "making a profit on every key sold", unless each key code costs >£10 million.

Clearly, that argument makes no sense whatsoever.

They only make a profit if "total revenue from all sales" > "total cost to develop, distribute and promote".

You cannot "make a profit on each key sold". That is a meaningless phrase.

 

[craig_t]

If a game is £10m to make, they only need to sell 250,000 at £40 - Assuming the 10m includes paying people to make it etc so everything beyond that is pure profit that means they will easily make into profit.

Tomb Raider sold 1 million copies for xbox one in 3-4 month, the money made here is crazy. Even if it cost 100m to make, the profit margins are huge due to the amount of sales

 

[Zethor]

Why will they go out of business? They're still making a profit on every key sold. Unless you think they're selling the cheaper keys at a loss just so people in less wealthy nations can play games? If they were selling at a loss in those places business logic would suggest it's cheaper not to sell there at all.
Would they make less profits if everyone used the grey market sites. Yeah, no doubt. Would they make less profit if everyone waited until the game was on sale? Yeah, no doubt.

If everyone used key sites they would make no profit.

 

[FoxEye]

If a game is £10m to make, they only need to sell 250,000 at £40 - Assuming the 10m includes paying people to make it etc so everything beyond that is pure profit that means they will easily make into profit.

Tomb Raider sold 1 million copies for xbox one in 3-4 month, the money made here is crazy. Even if it cost 100m to make, the profit margins are huge due to the amount of sales

http://www.develop-online.net/news/...3-4m-tomb-raider-sales-are-not-enough/0114376

The real costs are a lot higher. >$100 million. They were/are making losses even with sales of 3+ million, according to that article.

For reference, GTAV cost >$230 million to develop.

e: TR "finally achieved profitability after a year"
http://www.eurogamer.net/articles/2...chieved-profitability-by-the-end-of-last-year

"At least 5 million sales needed to break even."

 

[Dis86]

If a game is £10m to make, they only need to sell 250,000 at £40 - Assuming the 10m includes paying people to make it etc so everything beyond that is pure profit that means they will easily make into profit.

Tomb Raider sold 1 million copies for xbox one in 3-4 month, the money made here is crazy. Even if it cost 100m to make, the profit margins are huge due to the amount of sales

Lol what? Are you the most naive person ever?

You think 100% of the £40 cost goes to the developers? Who do you think sells the game? Do they do it for free? Do advertisers advertise for free? Does TV/Radio/Online allow the advertisers to advertise for free?
Do physical copies get transported by rainbows? Manufactured by elves?

 

[Vonhelmet]

It doesn't work like that. If a game costs £10 million to make, then how are they "making a profit on every key sold", unless each key code costs >£10 million.

Clearly, that argument makes no sense whatsoever.

They only make a profit if "total revenue from all sales" > "total cost to develop, distribute and promote".

You cannot "make a profit on each key sold". That is a meaningless phrase.

You make a marginal profit, because the cost of any individual sale is essentially nil. But yes, overall, you want total sales to exceed total costs, but that's such an obvious thing to say that it's basically worthless.

 

[Vonhelmet]

If everyone used key sites they would make no profit.

Citation needed.

 

[Vonhelmet]

And again, we have the people who were (historically) willing to pay £35, but no longer have to, since the game is on a grey key seller for £20 from Day 1.

What about people who would never have paid the £35 but will instead pay £20? You're making sales there that you weren't otherwise.

This is where the revenue loss is realistically occurring. Perhaps not from those who categorically won't spend more than £15 on a game.

I'm willing to bet there are a lot of people (esp kids) who have the money - and inclination - to buy lots of games at £35, but no longer have to, since the grey market give 50% discounts from release day onwards.

Speculation is the cornerstone of every good argument.

 

[FoxEye]

You make a marginal profit, because the cost of any individual sale is essentially nil. But yes, overall, you want total sales to exceed total costs, but that's such an obvious thing to say that it's basically worthless.

The cost of the sale is nil? What kind of statement is that?

The cost is not the cost of the code to produce. The code is just a string of letters and numbers, and has virtually nil cost at all.

Does that mean that if all keys were £1, you'd make a profit on all keys sold? And if that's "true", then that metric of determining profitability is as worthless as you say my statement is.

The fact remains, you don't "make a profit on every key sold", because that statement ignores the actual real costs involved in making a game.

 

[Zethor]

Citation needed.

Triple A developers don't have 100% profit margins so they would make no profit if they sold at 50% lower prices.

 

[FoxEye]

What about people who would never have paid the £35 but will instead pay £20? You're making sales there that you weren't otherwise.

This is only true for people who a) won't wait for the price to fall and b) won't pay £35 and c) will pirate.

People who would pay £20 but not £35 always had the option to wait.

You cannot say - as you seem to be - that you make /extra/ sales by having the game available at £20 on release. Some people would have waited for the price to decline, so they are /not/ lost sales. Just sales that come earlier instead of later.

The people who *will not wait for price drop* and *are prepared to pirate* are the extra sales, I will grant you that.

Does the revenue from this "WILL NOT WAIT!!" group offset the lost revenue from "Would have paid £35, but 50% discount at launch, yes please!" group?

 

[Moothead2]

What about people who would never have paid the £35 but will instead pay £20? You're making sales there that you weren't otherwise.

This is what I feel brings balance to these sites. Yes, less people will be paying full price for your game, but you'll also have many people, myself included, who will pick up a game for £20 that I wouldn't have otherwise bought for another 6-12 months when it eventually ends up on sale on Steam. You'll also still have people on both extremes either pre-ordering on Steam and those who won't buy it until it's £4.99. Overall I would imagine that they make just as much money now than if they exclusively sold them for £40 and followed the natural downward pricing curve from yesteryear.

The problem with devs such as Square Enix is that they expect too much. They expect their games to sell 10m+ units when it just isn't likely to happen. They also pile money into marketing and graphics when they could be innovating in the gameplay department, which as proven by Splatoon, does lead to a high number of sales.

 

[FoxEye]

This is what I feel brings balance to these sites. Yes, less people will be paying full price for your game, but you'll also have many people, myself included, who will pick up a game for £20 that I wouldn't have otherwise bought for another 6-12 months when it eventually ends up on sale on Steam.

So... not a lost sale in that case? You still paid them what you would have paid them in 12 months time.

But undeniably, there are people who bought at release who got a discount they didn't need, because they would have bought anyway.

What we're saying is, does the loss of income from this group get made up by any other group?

Clearly it doesn't by your group. You were always going to pay them £15-£20. Now or in 12 months doesn't really matter.

 

[P.B]

http://www.develop-online.net/news/...3-4m-tomb-raider-sales-are-not-enough/0114376

The real costs are a lot higher. >$100 million. They were/are making losses even with sales of 3+ million, according to that article.

For reference, GTAV cost >$230 million to develop.

e: TR "finally achieved profitability after a year"
http://www.eurogamer.net/articles/2...chieved-profitability-by-the-end-of-last-year

"At least 5 million sales needed to break even."

But wasn't loads of codes gave away with by amd thus lowering how much people was willing to pay for it ?

 

[P.B]

I personally don't have a problem with these sites as the developer will still get the money as otherwise I wouldn't of bought it. but i do pay full price for some games fallout and bf

 

[Moothead2]

So... not a lost sale in that case? You still paid them what you would have paid them in 12 months time.

But undeniably, there are people who bought at release who got a discount they didn't need, because they would have bought anyway.

What we're saying is, does the loss of income from this group get made up by any other group?

Clearly it doesn't by your group. You were always going to pay them £15-£20. Now or in 12 months doesn't really matter.

Not necessarily. The sale price could be £10 rather than the £20 for a start which means they've lost £10 from their sale to me. I also wouldn't spend £20 on a game that's been out for 12 months but I would spend £20 on a game I was interested in that's just been released. The Witcher 3 I bought for £20 on release day. If I were to buy it now from Steam/GOG I'd definately wait for it to be sub £10 because of the length of time it's been out. That mindset has been brought on by Steam sales rather than CD Key sites too.

 

[FoxEye]

Not necessarily. The sale price could be £10 rather than the £20 for a start which means they've lost £10 from their sale to me. I also wouldn't spend £20 on a game that's been out for 12 months but I would spend £20 on a game I was interested in that's just been released. The Witcher 3 I bought for £20 on release day. If I were to buy it now from Steam/GOG I'd definately wait for it to be sub £10 because of the length of time it's been out. That mindset has been brought on by Steam sales rather than CD Key sites too.

Hmm, I hadn't considered that. Your interest in a game wanes quickly after release date?

Although having said that, with a few exceptions, it only takes 1-6 months for a typical title to hit £20. XCOM:EU, for example, was 1/2 price after one month.

Would you say your interest has cooled significantly in the first 3 months, then?

 

[GoogalyMoogaly]

It doesn't work like that. If a game costs £10 million to make, then how are they "making a profit on every key sold", unless each key code costs >£10 million.

Clearly, that argument makes no sense whatsoever.

They only make a profit if "total revenue from all sales" > "total cost to develop, distribute and promote".

You cannot "make a profit on each key sold". That is a meaningless phrase.

So it's better to sell 100 copies at £5 than 10 copies at £40...

If they don't want to sell 300,000 copies at Ukrainian prices (for example) why release 300,000 keys at Ukrainian prices? Surely they've budgeted for that?
They can't guarantee any sales at Full European/UK prices.

I ask again, what if everyone bought at sale prices? Are we supposed to feel guilty for waiting for the sale prices too?

If game studios and publishers are struggling to make money, why do they keep doing it? Would you keep doing something where you barely broke even?

If it's not a legal issue then what is it? Just something you feel strongly about and believe everyone should agree with you?
It's not wrong, it's just that you don't like it?
Like some people feel about eating meat?