this post was submitted on 15 Mar 2025
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Real goods have a limited lifespan, they usually go on sales when they are about to reach the end of their life or when you physically have to get rid of them. Software doesn't expire.
A price is usually set to cover the initial costs and to make a reasonable profit not to squeeze how much money you can from people.
Games on Steam are not usually recurring purchases, one person won't buy the same product over and over like they need to for food. This means the market of people willing to pay the full price gets saturated over time.
Sales are a way to increase the market size by lowering the "barrier to entry" (price). Sometimes a price will be permanently lowered, however usually not because a temporary sale encourages people to buy now instead of later.
Sounds like videogames sales are made to make money and the original price has not much to do with cover costs bur rather making as much profits as people are willing to pay
It's a digital good, just a bunch of 1s and 0s in a particular order. The manufacturing cost of making a copy is near 0. There are license fees, but those are almost always pencentage based. Valve takes 30%, the publisher takes a percentage, and so on.
Then it's a balance of volume vs price. If you can sell 10,000 copies at $10, vs 1,000 at $15, ($100,000 vs. $15,000), it is more profitable to sell the game at $10.
And human psychology is manipulable. Seeing the original price at $15 will influence them to value the game around $15, and so $10 would be a good deal. If they want it, they should buy it on sale. Where as seeing the original price at $10 would influence them to value the game at $10, which could mean it's not as good as a $15 game they can get for $10 on sale.
The developers need to make enough profit to cover the development costs' debt. Then after that, the rest of the profit goes to the next project and maybe bonuses... Probably to the executives. Part of that is also to cover the cost of past and future non-pofitable games. Not all games make a profit and developers and publishers need to offset the cost of past and future failures.
Valve ceo is thinking about the next project from his mega yachts