[green.pixel]

Late news, but better late than never.


THQ CEO: "Our Steam business is going through the roof"

At Gamescom they've also said PC isn't getting the attention it deserves:
http://www.bit-tech.net/news/gaming/...ion-it-deser/1


This is a response from 1C Publishing director Davyd Styll to "Steam is killing PC market" claim by retailers:

What is more surprising is the reaction of retail now. I have read it described as the reaction of a small child who threw his toy away because he no longer wanted it, but started screaming as soon as another child picked it up to play with. The metaphor works perfectly, especially in the light of the excuse I heard on numerous occasions.

‘There is no demand’ went the mantra. But is this really true? Not in our experience.

I remember fondly the meeting in my office with a red-faced publisher who was explaining why their initial order from a major retailer for one of our new releases was just 30 units. At the time I had my browser open on the Steam product data page, which updates sales numbers every few minutes.

“They have taken one unit for each of their top 30 stores” he told me. “There is just no demand from their customers”.

I glanced at my screen, hit refresh and advised him: “In the time it’s taken you to tell me that there is no demand, Steam has sold 45 units”.

Steam is selling decent numbers of our titles. They are really cool to work with, have a refreshing, knowledgeable developer mentality, and never bully or threaten their suppliers.

On the economics of retail vs. Steam:

As a generalisation, retail would pay these guys a maximum of 40 per cent of what they made. So on a £29.99 game the publisher would receive about £12 (and on a sub-licensed deal, we would then only get about £4.25 of that) – minus return, write down and consignment costs.

When would we get that money? Well, payment would be by the end of the quarter.

So, let’s say £10 per unit sale goes to the publisher, £3 to the developer/sub-licensor, and it’s in your bank five months after the customer has paid out £30.

Compare that to the digital model. On a £29.99 sale, the digital partner will pay the publisher – or in many cases direct to the developer – between 60 and 70 per cent, by the end of the month following the sale.

Wow. To recap: on a sale over the counter today, we can have our £3 by the end of March, or on a digital sale, we can have £20 by Christmas.

Remind me why we should choose to go with retail and decline to let Steam sell the game?

EA:

Brown also claimed that Battlefield Bad Company 2 had generated around $30 million in digital sales.

Also contributing significantly was "full game downloads... primarily of PC products. What we're starting to see, especially for first person shooter titles like Battlefield Bad Company 2 is a higher propensity for people to purchase the PC client digitally. This is an area where with our first person shooter games, our Sims franchise and others, we've been able to grow our digital business."

Brown stated that $750 million of the company's current revenues derived from digital, up from $430 million two years ago. The PC was the major provider of this, with consoles and mobile roughly equal.

Sega:

Publishing giant Sega has defended PC gaming, calling it a strong and vital market for the games industry.

Physical retail sales of PC games are continuing to slide in 2010, but Sega’s UK MD John Clark says that isn’t a fair representation of the market – with digital sales now accounting for a large proportion of revenue.

“The PC market is third in terms of its year-on-year performance with a decline of 26 per cent, but this doesn’t really reflect the full picture,” said Clark.

“The PC digital download business is now a viable sector but somewhat invisible as it’s not yet covered by Chart-Track. The PC market overall is actually performing much better than is currently reported and remains a vital and strong sector to be involved in.”

[Silent_Buddha]

Aye, there's a lot of good things associated with digital distribution. The biggest as pointed out quite well by 1C Publishing that even at the same price a publisher can have a potentially large increase in revenue (600-700% in his example).

So even as the traditional PC gaming segment continues to contract (Sega saying the PC market is down 26% YoY) they can still make more revenue. More revenue = more money available for game developement. Or to put it another way, due to digital downloads, they can avoid raising the price of games for at least another half decade if not longer.

What I find absolutely hypocritical is EA who are attempting to thumb their noses at the largest digital distribution vendor (Steam) in order to attempt to make their own in house store appear more attractive. Well good for them I suppose. But I won't ever buy a single DD title from a EA store or THQ store or UBI store or whatever as I want all my games to be easily gotten from one location. Hell, I bought one game from EA a long time ago when Steam was still new and I have no clue what my login information is or how to get the game.

I wish Blizzard would move to Steam, but unfortunately they are so big and successful they can afford to make people buy from them instead of Steam. Ah well, one exception isn't too bad I suppose.

Regards,
SB

[hoho]

Originally Posted by Silent_Buddha

I wish Blizzard would move to Steam, but unfortunately they are so big and successful they can afford to make people buy from them instead of Steam. Ah well, one exception isn't too bad I suppose.

Good thing about blizz is that you don't have to have some app running in background to get your stuff and play them. You just get the installer, run it and that's it.

[Silent_Buddha]

Sure, that's a benefit on older systems I suppose. But really, I have so much memory that 75 MB for Steam isn't going to affect anything even a little bit. And since it uses 0 CPU cycles when not updating a game in the background or when not open, it's a non-issue IMO.

Regards,
SB

[Bouncing Zabaglione Bros.]

It's hardly surprising that PC gamers are turning to direct download. Go into the average store, and they have swept away their PC games in order to make lots of profit selling second hand console games. If they do have a few PC games, they will be out of date and grossly overpriced compared to a good e-tailer or direct download.

Retailers have made their own bed, they can hardly complain when PC shoppers don't want to lie in it with them.

[Mize]

OTOH I occasionally scan the 2x12" long shelves dedicated to PC games at one of the local retailers and find a great deal. I picked up BFBC2 for $19 USD while Steam was still at $59 literally a month after it came out. I was looking for a used x360 version for my son (no such luck) at the time...so it never hurts to scan.

[Bouncing Zabaglione Bros.]

Originally Posted by Mize

OTOH I occasionally scan the 2x12" long shelves dedicated to PC games at one of the local retailers and find a great deal. I picked up BFBC2 for $19 USD while Steam was still at $59 literally a month after it came out. I was looking for a used x360 version for my son (no such luck) at the time...so it never hurts to scan.

Yes, you can find deals, but that's because you are picking over the bones of an area where the retailer has already given up and just wants to clear those shelves. It's just a self fulfilling prophesy where they've already decided that they can't sell PC games, so any games sold are just an aberration.

[NRP]

I think DD is the future, even for consoles. It's just so much easier (when it works).

But as it stands, I won't buy anything from EA via DD because I have an extremely low tolerance for hassle these days, and my experience with the EA store has been mostly hassle.

[Scott_Arm]

Direct download is not the future in Canada, thanks to usage based billing and download caps.

[NRP]

You should move south.

[green.pixel]

Originally Posted by Bouncing Zabaglione Bros.

Go into the average store, and they have swept away their PC games in order to make lots of profit selling second hand console games.

Yep, Gamestop and similiar shops makes the vast majority of their profits from used game sales. Retailers buy games at close to MSRP so sales cut directly into their profits, unlike with DD platforms which get a huge increase in sales. New games are a loss leader for them. However, I've been reading that Fry's Electronics has more shelf space for PC games that the entire size of the average Gamestop mall. They are a loss leader for more profitable stuff like PC hardware and accessories.

Originally Posted by NRP

I think DD is the future, even for consoles. It's just so much easier (when it works).

Digital-only future would only hurt consumers. You are giving up rights for convenience.

[Davros]

Originally Posted by green.pixel

Retailers buy games at close to MSRP

No they dont

So on a £29.99 game the publisher would receive about £12

[green.pixel]

Originally Posted by Davros

No they dont

That's publisher, not retailer? At what % of the price they buy games then (i.e., not used ones)?

[Bouncing Zabaglione Bros.]

Originally Posted by green.pixel

Digital-only future would only hurt consumers. You are giving up rights for convenience.

That would be true if software was not excluded from all kinds of consumer laws already, with another end-run around those laws in the form of EULA and other licensing tricks.

Try taking back an open box of game software because it doesn't work properly on your PC, and see how far you get. Online registration and purchases locked to accounts already take away basic ownership rights as publishers try to kill off any second hand markets.

[Squilliam]

Steam is almost like a game education service. I have a few friends who no longer just pirate everything, they also grab games from the Steam sales. Sure they don't buy the $60US new releases but anything pretty much $20 or under is typically bought rather than downloaded. I wonder if the reason why Steam sales increase sales so much is because there are a lot of price sensitive pirates out there. Case in point - Amnesia the dark descent. It was bought rather than pirated. I think they would do better if they took advantage of the content updates and added more free content over time to the free games so effectively it would feel that if you downloaded it illegally you were missing out.

Im not trying to talk about piracy but im just trying to reconcile steam with piracy and how the two relate to each other.

[KKRT]

Originally Posted by Silent_Buddha

What I find absolutely hypocritical is EA who are attempting to thumb their noses at the largest digital distribution vendor (Steam) in order to attempt to make their own in house store appear more attractive. Well good for them I suppose. But I won't ever buy a single DD title from a EA store or THQ store or UBI store or whatever as I want all my games to be easily gotten from one location.

I actually like EA Store, they dont have intrusive DRM, the EA client dont have to be on, except the moment when You are downloading game and its fast.
Steam is cool, but sometimes broke, has too many ads and doesnt allow to choose download location and has sometimes strange download speed, its says for example 600kb/s but real speed is two times lower.

It would be cool though if You could use serial keys on steam and ea store simultaneously.

[Silent_Buddha]

Yeah, if I hadn't had the opportunity to use Steam in Japan with my US account, I wouldn't have known what you meant with the slow speed. But in that case, it would have been REALLY nice if I could have chosen where to download from as I was getting ridiculously slow download speeds there with my US based account. And that was on a 100 Mbps connection. Granted single connection downloads from outside of Japan are limited in speed, but even that limited speed should have been faster than I was getting over Steam at the time.

Regards,
SB

[hoho]

Originally Posted by KKRT

doesnt allow to choose download location

Is Steam -> Settings -> Downloads + cloud -> Download region not good enough or am I missing something? That option has been there for ages

[Silent_Buddha]

Oooooh, cool. I'll give that a try next time I'm in Japan. Wish I'd known about that last year.

Regards,
SB

[KKRT]

Originally Posted by hoho

Is Steam -> Settings -> Downloads + cloud -> Download region not good enough or am I missing something? That option has been there for ages

I meant location on HDD

[willardjuice]

has too many ads and doesnt allow to choose download location

Besides the store page, where is there ads? You can disable the pop-up that alerts you about upcoming news/deals/etc (settings->interface). You can also pick your download location (settings->downloads+cloud).

[willardjuice]

Originally Posted by KKRT

I meant location on HDD

http://en.wikipedia.org/wiki/NTFS_symbolic_link

[hoho]

Originally Posted by KKRT

I meant location on HDD

It's a bit uncomfortable but you can back up all stuff through steam, uninstall it, reinstall it on other place and restore backups. Or if you have fast and/or uncapped net just re-download them

[Davros]

So on a £29.99 game the publisher would receive about £12

Originally Posted by green.pixel

That's publisher, not retailer? At what % of the price they buy games then (i.e., not used ones)?

yes the publisher gets £12 who's getting the other £18 ? The publisher pays the dev so that just leaves the retailer

[aaronspink]

Originally Posted by green.pixel

That's publisher, not retailer? At what % of the price they buy games then (i.e., not used ones)?

Between distribution and retail the markup is roughly 2x. This is true for games and MANY other categories of good. The reason a company like say walmart is able to do what they do is they act as both the retailer and distributor, same for amazon. Any brick and mortar retailer that isn't it own distributor has a hard time competing today in any mainstream categories.