It definitely seems to be a factor that only effects certain companies. Or perhaps that only certain companies cant seem to find a sensible way around. No end of small and Indy developers who have made more money thanks to the sale. No end of large companies who have suddenly made a bunch of money on an older product by relaunching it on steam and hitting a sale. Even just companies that make better games seem to have no trouble with it.
But I have read some first hand accounts of those same small and Indy developers who got schwacked by a steam sale.
It does seem to mostly be an Issue with aaa studios. And it’s more of a feed back loop. They were already going for microtransactions and needless social/mobile elements and perfunctory multi-player to recoup supposed “losses” over the life of the game. They were already using pre-orders to front end sales during early full price. They were already operating in a weird marketing driven press environment. They were already trying to Side step reviews and word of mouth. The more they’ve done to shift those sales towards the first week, The more they need to do so. Because all the tactics used contribute to the fact that they’re shipping product that can’t really sustain sales long term. Once price goes down volume may not be high enough to make up for reduced margin.
I also think there’s some fuzzy math involved. The media business tends to view piracy as 1:1 lost sales. Which clearly isn’t the case. Like wise I think they’re assuming a sale at reduced price simply means lost money. Rather than accounting for the fact that increase sales at reduced margins often mean more profit overall.
So there seem to be real factors at work here. That do reduce profit to some extent (in a way that’s easily offset by increased sales). But the response to that from the biggest players largely seems to make those effects bigger. The window of profitability smaller. Which means you need to press more of your sales into a shorter amount of time. Repeat. Until your product out and out bombs.
