Elastic PC game prices are proof games cost too much

December 22nd, 2010

What does it mean when Steam, the world's largest PC gaming store, regularly slashes prices of its games by upwards of 75%, and in some cases 90%? I'll tell you.

The frequency of such discounts, including this week's massive Christmas sale -- with many top games going for less than $5 -- is proof that gamers are responding in kind. Steam wouldn't be offering these crazy discounts as often as they do if the people involved weren't making money.

In other words, video games are elastic. When elasticity occurs this often, and at mark-downs well below the $50-60 MSRP, it means gamers are no longer willing to pay full price. And since games cost less to make than Hollywood movies, it's not unreasonable to expect them to cost about the same as a movie ticket or at most the cost of a DVD.

What do you think: Is the rise of Steam with the help of regular discounts proof that games cost too much? Have you stopped paying full price for games, waiting instead until they go on sale to buy them?

Read more: PC gaming headlines

Comments

I still prefer buying games from GameStop personally, because I like to have physical copies of games, I just think it's nice to have something to look at or something to feel in front of you rather than having something virtual. If Steam would offer shipping the physical copy as well as the virtual for a little higher fee I would definitely shop on Steam.

Anything worth having is worth working hard for.

1
Posted Thursday, December 23rd, 2010    Quote This Post
Level 7
6397 ARP
4897/2147482148, 2147477251 ARP to go
4897/2147482148, 2147477251 ARP to go
Pffft... There are so many middle men inbetween any big name in games and gamestop, that the original company only nets around $7 p/game, while digital sales give $30-$40 to the original company. What's that mean? Well, it means that the company still makes money even with these huge sales because: A) digital DL has no production costs (excempt bandwidth fees) and B)The old games that barely make any sales at full price get purchased more frequently while the big companies still net more p/game.

Sorry for bad punctuation, in a rush, gotta go!

2
Posted Thursday, December 23rd, 2010    Quote This Post
Level 2
166 ARP
66/150, 84 ARP to go
66/150, 84 ARP to go
I do think that the prices of the games in the last few years are
too expensive, that is why I prefer buying the virtual copies because
I have no money...
The only games I have bought, without any discount, from my own money this year is Battlefield: Bad Company 2 in a pre-order price, which was 50 dollars.
After a couple of months Steam lowered the price to 30 dollars, and two
days ago there was a 60% discount means the game was sold for 10 dollars.
My friend was pissed, but I didn't really care, what's done is done.
Anyhoo, I had a lot more games that I wanted to buy in order to play them
online including Hot Pursuit, Mafia II and a couple of more games but
each copy valued at about 50 dollars, so its about 250 dollars a year most
of the time.

To sum it all up, the answer is Yes.

3
Posted Thursday, December 23rd, 2010    Quote This Post
Level 2
139 ARP
39/150, 111 ARP to go
39/150, 111 ARP to go
I saw this sale and another around Halloween where left for dead 2 was only ten bucks!

I have to say if steam keeps this up, many more people are going to make the switch from consoles to PC gaming :D
Don't get me wrong, I love my PS3, Xbox360 and even my Wii but after seeing the sales on steam and what a PC can do,I ordered my Alienware Aurora :D
still waiting for it in the mail, can't wait to play l4d2 and crysis!

If it ain't broke, don't fix it.

4
Posted Thursday, December 23rd, 2010    Quote This Post
Level 1
33 ARP
32/99, 67 ARP to go
32/99, 67 ARP to go
I blame the publishers, and some of the game development companies for making games that contain less but cost more, I'm mean seriously what happened to good ol mod tools, instead of having to pay for extra contest we were able to make it ourselves as a community. I think this alone is the cause for so many games early deaths lately.

Knowledge is Power

5
Posted Friday, December 24th, 2010    Quote This Post
Level 6
1120 ARP
120/500, 380 ARP to go
120/500, 380 ARP to go
The Steam deals are nice but they aren't necessarily unique. Amazon is offering many of the same deals for digital game downloads. Bad Company 2, for example, is $19.99 for the DVD version or $14.99 for the digital download.

This suggests that the sales themselves are at least somewhat coordinated by the publishers, rather than the retailers deciding to deeply cut their profit margin on the sale.

That being said, the question posed by the article is a good one. Are video games too expensive? The market answers the question for us. If games were too expensive, people wouldn't buy enough of them and publishers would lower the price.

One of the main reasons games are move expensive than movies is because movies are generally 1.5-2 (sometimes 3 or more) hours of entertainment, while a video game lasts much longer. MUCH, MUCH longer if you account for online play.

In other words, video games will cost what they cost so long as people are willing to pay.

And while it's true that video games generally enjoy a much higher initial profit margin than movies, we should also keep in mind that movies have a second profit phase from DVD/Blu-Ray sales, and popular titles (think the Eclipse movies) can generate huge profits from product royalties, so the OVERALL profit of a movie can certainly be competitive to the most profitable games.

Of course, games still cost 1/5 to 1/10 the money to make...

I am the judge, the jury, and the Executioner!

6
Posted Friday, December 24th, 2010    Quote This Post
Level 3
451 ARP
201/250, 49 ARP to go
201/250, 49 ARP to go
I get hard copies for special games only like Starcraft 2. Other than that I love Steam and purchasing there. Very convenient and deals are unbeatable when they have this Christmas sale.

For newer games when they release and the elasticity thing. I think a new game is good anywhere from $40-50. $60 is just too much. Although I can't complain with anything lower than 40 =) lol and most of the time its good to hold off for a few months after a games release because most likely a sale will occur.

7
Posted Saturday, December 25th, 2010    Quote This Post
Level 2
219 ARP
119/150, 31 ARP to go
119/150, 31 ARP to go
really amazing prices i keep saying to myself am gona buy me some games :P but like then i dont buy them because i dont have time to play ?:P

Alienware M11x : C2D | 4GB RAM | 250GB HDD | 1GB NVIDIA® GeForce® GT 335M

8
Posted Sunday, December 26th, 2010    Quote This Post
Level 2
192 ARP
92/150, 58 ARP to go
92/150, 58 ARP to go
When games go on sale on steam, I look for the games that I want, but don't feel are worth paying full price for. Some games, such as the cod series, I find are worth paying full price and getting them when they come out (except Black Ops *cough*).

youtube.com/playertwogaming

9
Posted Saturday, January 1st, 2011    Quote This Post
Level 5
751 ARP
1/250, 249 ARP to go
1/250, 249 ARP to go
I love these Steam Sales. It gives me more incentive to try out new indie games that I would normally be really cautious of buying and quite often I get way more than my money's worth.

My only gripe is that AAA titles are very overpriced (I live in Australia) and can be as much as 1.5-2x the price of the same game in the US store.

10
Posted Friday, January 7th, 2011    Quote This Post
Level 1
82 ARP
81/99, 18 ARP to go
81/99, 18 ARP to go
Slackin said: I blame the publishers, and some of the game development companies for making games that contain less but cost more, I'm mean seriously what happened to good ol mod tools, instead of having to pay for extra contest we were able to make it ourselves as a community. I think this alone is the cause for so many games early deaths lately.



I agree, i still keep The Elder Scrolls: Oblivion /Shivering Isles installed on my pc, even tho the last time i installed it, it was 2 years ago. Fully installed, patched + dlc the game is around maybe 7-8GB, mine is around 18GB. That's 10+ GB of downloadable content made by me and other players. The game doesnt even look close to the "vanilla" version, but still it gives the same/better experience. And have it in mind with the Constuction Set, Bethesda provided the players for free, you can basically change the entire game, even the main story to you liking. So thumbs up for games like that (talking about single player games). Any other single player game is not worth my money. It has to prove that its worth buying.

11
Posted Friday, January 7th, 2011    Quote This Post
Level 2
148 ARP
48/150, 102 ARP to go
48/150, 102 ARP to go
I usually wait until they go on sale but if its an online game then I do think that paying full price is worth it because it at least has some replay value.

Sup

12
Posted Monday, January 10th, 2011    Quote This Post
Level 3
406 ARP
156/250, 94 ARP to go
156/250, 94 ARP to go
If a game is cheap, normally the development team is not so expert and the game quality will not be the best from the market. servicii seo

13
Posted Monday, May 23rd, 2011    Quote This Post
Level 1
13 ARP
12/99, 87 ARP to go
12/99, 87 ARP to go
Games cost really too much yeah, 60€ for a game now :'(

"It's Nice To Be Important , But It's More Important To Be Nice"

14
Posted Wednesday, October 19th, 2011    Quote This Post
Level 7
4776 ARP
3276/2147482148, 2147478872 ARP to go
3276/2147482148, 2147478872 ARP to go
Cant w8 for l4d3 to come out! payday cash advance

15
Posted Monday, January 2nd, 2012    Quote This Post
Level 1
12 ARP
11/99, 88 ARP to go
11/99, 88 ARP to go
I do think that the prices of the games in the last few years are
too expensive.servicii seo

16
Posted Thursday, March 29th, 2012    Quote This Post
Level 1
14 ARP
13/99, 86 ARP to go
13/99, 86 ARP to go
I wait until they go on sale but if its an online game then I do think that paying full price is worth it because it at least has some replay value.consultant seo

17
Posted Tuesday, April 17th, 2012    Quote This Post
Level 1
14 ARP
13/99, 86 ARP to go
13/99, 86 ARP to go

Add Your Comment

You are not logged in. To leave a message you must Login First.