With the Steam Summer Sale well underway, I thought it would be good to chat about the pricing strategies for games in the sale.
This year, Valve have removed the flash sale element (which previously featured certain titles on the homepage at a slightly better discount for a short period of time). This was a good move on their part – although it had given developers a nice burst of new business, it did mean players were holding off buying in the main sale to wait for the better flash sale discount.
With a more even playing field, big sales like this does leave a challenging question for developers – particularly indie devs. What should the discount be set at?
There are a number of factors to consider and the reality is, there’s no right or wrong answer. You have to make the decision on what’s best for your game.
A low discount won’t result in a high volume of sales
But the revenue generated may be higher. It’s difficult to estimate this, but over time you should get a feel for what works best for your game. Are unit sales more important than revenue? They could be for certain games that are more heavily dependent on an active community.
A low discount may help maintain the perceived value of your game
Which means you can continue to keep your price higher for a longer period of time. This will potentially return more revenue in the long term as it goes some way to extend the lifespan of your product.
A high discount may lower the perceived value of your game
Not quite to extent that a price drop would, but still has a perceived impact. It’s very common for players to follow a game for months and gauge the levels and frequency of discounts. Dropping by 66% in the summer sale, then only 25% later in the year may have an adverse impact (as people wait for another 66% discount to come around). If the expectation that a higher discount is to come, then even a good deal of 25-33% off can seem like poor value.
A high discount can trigger buyer’s remorse
Nobody likes buying something just to see it half price a few days later. The initial purchase could have been good value in itself – you don’t want customers getting annoyed about that situation.
A high discount can help hit the top seller’s list
You REALLY need to strike gold for this to happen! But, if you can make it on to the “under £7” or “under £4” (and to a lesser extent, the category top sellers), then that’s a real boost to visits to your store page and sales. These lists are updated automatically based on unit sales / revenue.
- Top tip – centering your marketing efforts around this objective at key points in the sale can be a good approach. It takes a lot of resource to pull it off though.
A high discount for a new game can be its death warrant
Players aren’t stupid. They know what that 66% discount for your 3 month old game means. Maybe you can find the sweet spot between the perception of a flopped title and a good bargain worth having in the library, but that point it’s likely you’re mitigating your losses rather than shooting for success.
A high discount can hurt review scores & player retention
There’s a definite correlation between the price someone pays and how much time they give the game. Sure, you can find some gems in the sale that become your new favourite game of all time, but generally people pick up cheap games, play them a little and move on. Worse still (Early Access titles take note!), if your game is buggy, that low attention span from those bargain-seekers are more likely to trigger negative reviews.
Is it worth trading off the long term success of your game for a short term injection of cash? Sadly, for some indie devs the answer may be yes – money is tight and bills need to be paid. But not a decision to be taken lightly.
A high discount can change the community
An influx of new players can be a mixed bag. If you’re in Early Access, do you want feedback from a core selection of engaged fans, or do you want feedback based on quick impressions from people who picked the game up cheap? In the Venn diagram of these two groups, there’s a good overlap of really useful feedback, but the lower your price goes, the more noise will be included in that feedback.
When managed properly, Steam sales can be fantastic for indie devs (50-60 sale days throughout the year can account for a large part of annual revenue), but you do need to think about the long term impact as well. Revenue injection doesn’t always equal success (although it’s certainly nice!).