How do Steam/GOG sales work?

[Enthrone]

Hello,

 

just out of curiosity - I wonder how this works...

 

I buy all games exclusively on Steam. When there is a sale for a given game, does Steam somehow compensate it to the game developer? If not (which is likely) who decides if/how often/how big the sale is? Because I've seen many games being on sale very often very cheap and others hold their prices no-matter-what. Some game goes at a discount price only like 10-15% off whereas other goes even 90% off (which is crazy).

 

I admit I often buy games when they are on sale (same as many others I suppose). But sometimes it makes me feel bad...

Edited April 26, 2021 by Enthrone

[Earth]

dev set's price + profit and steam etc adds it's own profit and later both prolly cut profits etc.

[TriRodent]

From what (admittedly very little) I know, the developer sets the price - at least initially.  After 'x' amount of time Steam?GOG probably can cut the price/put it on sale. As to what % it gets cut by, that's probably up to the developer too (to a point).  Smaller developers (such as SW) may not want to deeply cut their prices until the game is several years old, while a big developer may just want to wring the last little bit out of a game (with a deep discount) before their next three games come out in the next couple of months & will dilute any buzz over the  new games. (or they've completely moved on from anything to do with that game/universe & any further sales are just a nice bonus that really won't impact the bottom line all 'that' much).

 

Take SW as an example (& I know NOTHING about how Jeff sets this up with S/GOG).  Fairly often we get new users stopping by & saying that they just discovered SW games & are looking forward to exploring the back catalog.  Jeff probably has discovered, over time, that he would make a little more money with those people who just discovered his games (with a smaller discount) than with a lot of people buying a complete collection of say Avernum that's 90% off once.  EA otoh knows that there aren't a whole lot of people out there left to 'discover' them & be willing to pay 70-80% of retail for older games.  For them, getting a few cents from a lot of people is probably the better option.

[TriRodent]

Hey, I just got promoted to Wingbolt...I'm so proud...

[googoogjoob]

The developer or publisher of a game sets the price Steam or GOG sells the game at. Steam or GOG then takes a share of the revenue generated by the game- Steam normally takes 30%, but cuts deals to take a smaller share of some bigger sellers; GOG, I believe, takes a flat 30% from all sales, but they might make individual deals like Steam does- but that's all behind closed doors. For comparison, the Epic Games Store normally takes a 12% cut, and itch.io does not take a mandatory cut at all.

 

7 hours ago, Enthrone said:

When there is a sale for a given game, does Steam somehow compensate it to the game developer?

Steam just takes the same 30% cut they do as when the game is sold at full price. The developer/publisher makes less money from each sale, relative to a sale at full price, proportionate to the discount.

 

7 hours ago, Enthrone said:

If not (which is likely) who decides if/how often/how big the sale is?

Developers/publishers decide when and for how much their game goes on sale, and they can do this themselves. However, Steam also does daily/weekly sales, and bigger sales events (sometimes in collaboration with publishers). These generate more attention, and thus more sales, than a game just going on sale normally does, and Steam asks the developer/publisher if they would like their game to be a daily sale, or whatever. The developer/publisher still chooses how much it goes on sale for, but I presume that Steam mandates, eg, a game must be at least 50% off to be a daily sale, or the like. GOG is, I think, more restrictive in allowing devs/publishers to do their own sales- launch discounts are common, and sometimes a publisher with a decent-sized catalog on GOG (Bethesda, Paradox, etc) will do their own sale on GOG; but generally, GOG does weekly/seasonal sale events that it offers developers/publishers a slot in, rather than letting devs do their own sales on individual games. Neither Steam nor GOG can put games on sale without the consent of the developer/publisher.

 

If you want to support the developer of a game- in the sense of ensuring that the largest proportion of what you pay for a game goes to the people (or at least the company) who actually made it- the ideal is to buy the game directly from the developer (who may sell the game on their site, or via itch.io); if that's not possible (and it often isn't), then directly from the publisher (who is normally going to also take a cut); if that's not possible (and again, it often isn't), then the Epic Store takes the smallest cut of the big storefronts.

Edited April 25, 2021 by googoogjoob

[Enthrone]

10 hours ago, TriRodent said:

Hey, I just got promoted to Wingbolt...I'm so proud...

Congratulations! 👍

 

8 hours ago, googoogjoob said:

Developers/publishers decide when and for how much their game goes on sale, and they can do this themselves. However, Steam also does daily/weekly sales, and bigger sales events (sometimes in collaboration with publishers). These generate more attention, and thus more sales, than a game just going on sale normally does, and Steam asks the developer/publisher if they would like their game to be a daily sale, or whatever. The developer/publisher still chooses how much it goes on sale for, but I presume that Steam mandates, eg, a game must be at least 50% off to be a daily sale, or the like. GOG is, I think, more restrictive in allowing devs/publishers to do their own sales- launch discounts are common, and sometimes a publisher with a decent-sized catalog on GOG (Bethesda, Paradox, etc) will do their own sale on GOG; but generally, GOG does weekly/seasonal sale events that it offers developers/publishers a slot in, rather than letting devs do their own sales on individual games. Neither Steam nor GOG can put games on sale without the consent of the developer/publisher.

 

Thank you for very detailed clarification. Much appreciated.

[Enthrone]

One more thing - why would present developers sell their games through publishers? Isn't that outdated? I mean I saw a presentation of game designer Daniel Vavra (creator of Mafia and Kingdom Come games) and he was talking precisely about this. How they first had to travel to US to present their game to big studios/publishers like Bethesda or Ubisoft to publish the game through them. But then online stores appeared and after that there was no need for a publisher because they (the developers) could sell the game directly through Steam etc. Online stores have changed gaming business entirely.

 

I don't know how big cuts publishers used to take but I imagine it being something close to Steam/GOG cuts. A benefit of using a publisher could be a financial support from them - which would turn them into investors and that's the downfall - now they would probably be "nosy" and have some demands how the game should look like.

 

So yeah, online stores may be greedy but I think they actually benefit independent developers like SW.

Edited April 27, 2021 by Enthrone

[googoogjoob]

3 hours ago, Enthrone said:

One more thing - why would present developers sell their games through publishers? [...] A benefit of using a publisher could be a financial support from them - which would turn them into investors and that's the downfall - now they would probably be "nosy" and have some demands how the game should look like.

That's basically it- a publisher will generally have greater resources than most (indie) developers will have access to, unless the developer has had previous hits. Not just financial support per se, but marketing/PR employees, QA teams, porting teams, contacts with distributors, etc. Which are important in that, even apart from not necessarily having enough capital to support the developers throughout a game's development, many developers (both individuals and teams) simply don't have the skillset to do marketing for their game, or an existing fanbase that they can draw volunteer testers from, or the time or skills to be a good community manager. There are also some smaller "indie" publishers, which are relatively principled, and privately held (so immune to shareholder pressure), and which thus can and do allow developers great or total artistic control over their work-  New Blood, Nightdive, and Devolver Digital are examples of this sort of publisher.

 

So there are benefits to working with publishers, although many independent developers start to self-publish once they can- once they have the skills and employees and capital that they don't need a publisher. It's much easier for a developer to reach the point where they can self-publish these days, given that you don't need a publisher to get on Steam anymore, and that GOG accepts games based on what they think will sell, and so on.

[The Almighty Doer of Stuff]

Spiderweb Software used to publish other studios' games, back in the day: Galactic Core, Lost Souls, Ocean Bound, SubTerra, and Homeland: The Stone of Night. They eventually decided it wasn't profitable enough and stopped doing it.

[Drayk Armitage]

Additionally, SW did use another indie dev (Fantasoft, known for Realmz) as a publisher for a year or two in the very early days.

[Enthrone]

Since we talk about different game publishing strategies I would come with one more topic.

 

If there is something I really, really hate, it is game being published exlusively only for gaming consoles (Xbox, Playstation). Why would someone do that? Are the benefits of being exclusive really so big? Don't I want to sell my game to as many players as possible? And yet this is happening, quite often actually. I admit I am PC orthodox, so I may be blinded. 😉

[Randomizer]

Some game console companies push for exclusivity to lock players into their system. Why help a competitor by advertising and creating a player base only for them to jump to another console when the next game in that series comes out. Game developers go where the money is and console companies offer advantages to making the games just for them.

 

The other main reason is how specialized the coding is needed to play on a system. Just to port from Apple to Windows systems used to be harder for Spiderweb games because of the way they were written. Until recently you couldn't transfer a save game file between the two because the data was saved in different formats.

[googoogjoob]

2 hours ago, Enthrone said:

If there is something I really, really hate, it is game being published exlusively only for gaming consoles (Xbox, Playstation). Why would someone do that? Are the benefits of being exclusive really so big? Don't I want to sell my game to as many players as possible?

Signing an exclusivity contract with a console manufacturer can be a big advantage for a developer or publisher. First, and most obviously, the console manufacturer might offer money up-front, or a bigger cut of the profits on each sale on the console in question. But beyond that, console exclusivity can very well mean a bigger audience than a cross-platform release can: the console company will do marketing to hype up an exclusive game, in the hopes that it drives further sales of their console, and this type of super-powered marketing can result in more game sales, on one console, than the game would sell on multiple platforms without the marketing push.

 

Fortunately, console exclusivity- or at least absolute console exclusivity- is diminishing. It's more common nowadays for a developer or publisher to make a timed exclusivity deal with a console/platform company, where the game is exclusive to a certain console or storefront for a certain amount of time (eg a year), and after that period is up, the developer can put ports of the game out on other platforms. Console and PC architecture have also become more similar over time, and consoles and PCs have become more similar in their capabilities, so it's usually easier to do ports now than it was a decade or two ago. Popular game engines like Unreal or Unity are natively cross-platform, too, allowing for developers who use such engines to release games cross-platform without having to either do porting work themselves, or hire someone else to do it.