Valve: Steam is making us rich

Written by Joe Martin

February 20, 2009 | 11:00

Tags: #keynote #newell #steam-sales

Companies: #dice #steam #valve

This is more of a news summary than a news article, but Gabe Newell's keynote speech at this year's DICE summit has revealed more than a few tidbits of interesting information about Valve's Steam platform and we figured we'd have to share.

The Valve co-founder started his keynote by giving a summary of why he thinks Steam is so successful and how he thinks Valve as a company is doing a good job of tackling piracy head on. He claimed that most of this success came from looking at pirates as under-served customers and that the solution was to create DRM methods that benefit the user, such as Steam.

What Steam is really good at, claims Valve, is giving gamers a definite reason to buy games on Steam, because facilities like auto-updates, achievements, VAC and friend lists are preferable than laboriously circumventing the Steam platform.

Going on, Newell revealed some truly staggering figures about how successful Steam is. There's 20 million people on the service now, apparently, with a 100 percent year-on-year growth that's kept up since 2004.

Most interesting though was the talk about after-sale support, such as the Team Fortress 2 updates. Apparently every time they drop a new update they get a minimum of a 100 percent increase in sales for that game, while the ability to gift games to other accounts has seen a 71 percent increase in sales, total, and a 75 percent increase in the number of Steam registrations.

Discount offers over short periods have a huge impact too, apparently. That recent half-price weekend on Left 4 Dead? That caused a 3000 percent increase in sales, plus a 1600 percent increase in Steam registrations.

By analysing the figures Valve's been able to make some interesting predictions too. A 10 percent price reduction creates an average income increase (not just in sales) of 35 percent, while a 25 percent discount gives an increase of 245 percent. 50 percent discounts create average increases of 320 percent, while a price slash of 75 percent off will push income up by a staggering 1470 percent.

The single most impressive figure though is that one (unfortunately unnamed) third-party game saw an increase in sales of 36,000 percent in a single sale weekend. Wow.

If you want to know more about Steam then you can check out our Full Steam Ahead feature, which offers an in-depth look at the platform. What do you think of Valve's sales strategy though? Let us know in the forums.
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