How many things would you purchase for $5?
It turns out that $5 is a magic price point for me and video games. Every week I check Steam for sales and if I am curious about the game, I can rationalize an impulse purchase. "$5? That is 2 cups of coffee. Sure..." (Of course I still buy the coffee so this is just an unnecessary personal expense but let me live the delusion.)
Apple has put tons of price pressure on software with their app store but Steam has recognized that weekend sale prices create all kind of demand from people that otherwise would not purchase the product.
Would I have paid $20 for an old game like Elder Scrolls 3: Morrowind? Heck no. But for $5, I am willing to get it just on the chance I might have the free time to try it. Even though that scenario is highly unlikely, I made the purchase.
Have I mentioned how much I love Steam?
Video games are like perishable foods. They make over 50% of their sales as pre-orders before release and then another 30% within the first month of release. After that they are "old", past their expiration date, moved off the mental shelf for the next pre-order/new release.
Sales on Steam is a great way to produce new sales revenue from old products whose development cost are already sunk costs. It is like DVD sales versus theater showings. With digital distribution, that means marginal revenue with almost no marginal cost. And I doubt that I am the only person that pays for a game he never even downloads which means there is zero marginal cost.
Steam sales - another smart business move that benefits gamers and game developers.
