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by jerf 4771 days ago
I see I'm the seventh reply, but I don't think anyone has yet correctly explained why Steam gets away with it. The reason Steam gets away with it is that their prices reflect the fact you can't sell the game.

Watch any simultaneously Steam and console release you like, for a decent game that doesn't immediately crash in value everywhere because it stinks. Watch the prices over the course of the first six months. Watch them both start out at $60, but watch the Steam price come down first, and more often. It's the usual pattern.

Watch Steam have their sales where something goes on sale for $5 or $10 while the consoles are still charging $25 on average.

I played Mass Effect 2 for $5 on the PC, when it was still ~20$ on the consoles. At that price, I don't care that I can't sell it. The abstract ethical arguments still theoretically apply, but in practice it's not worth worrying about. That's already approximately the delta between buying and selling used anyhow.

Based on history, Microsoft isn't going to work this way. For some reason, Steam is still the only digital retailer that has figured out the true supply/demand relationship and tweaked the price curves to maximize their returns, based an a rational model of the economy. Almost everyone else would seem to rather sell nothing at $20 than sell lots at $5.

(Nintendo's even worse than Microsoft at this, actually. EA's Origin seems to have at least partially absorbed this lesson. What's really weird to me is that rationally, the lower prices almost certainly maximize revenue; holding on to higher prices is probably based more in politics than economics.)

2 comments

I believe this is the real reason that Steam doesn't get flak for it. If Xbox One games saw the same price fluctuations that Steam games do, I don't think anyone would care about lending games out.
see/will. It hasn't happened yet, so we can't speak as though it already has.

I'm a Microsoft employee; but I don't know what they're going to be doing with that.

I am basing my expectations on the pricing on XBox Live. The XBLA stuff fluctuates and there's been a couple of sales (got El Shaddai for ~2$ so I know it's non-zero), but mostly everything stays pretty high relative to what the market can bear. If they change behavior, so be it, but let the record show it's not groundless speculation; the digital download market for Xbox 360 has been around a while.
It's true that we can't speak on how pricing will work for Xbox One games, but we can certainly comment on consumer opinion regarding the inability to lend games out on Xbox One vs. Steam.
Consoles don't have to compete with alternative publishers (MS takes a cut off of every new Xbox game sold regardless of the store, Valve doesn't get a cut of every PC game unless it is sold via Steam).

They also don't have to compete with the scariest publisher of them all, bittorrent; who sells everything for $0.

Console games are probably priced quite well to maximize marginal revenue. I know people who will drop $40 on a console game but who would not be willing to spend $20 on the same game for PC simply because there is a pirate version available.