So, why is Steam more expensive than retail?

[Blink]

I remember a time back when Steam first begun to sell games and it was always cheaper than retail. I imagined the idea was lack of packaging, retail distribution, delivery costs etc. Made sense.

Why is it now that Steam (the UK version at least) is quite often twice as expensive as buying online and ordering a physical copy of the game.

Some quick examples:

Call of Duty: Black Ops
http://store.steampowered.com/app/42700/ - £39.99
http://goo.gl/DYtn5 ( Amazon ) - £19.99

Assassin's Creed Brotherhood
http://store.steampowered.com/app/48190/?snr=1_4_4__13 - £29.99
http://goo.gl/VXvEH ( Amazon ) - £23.91

Dead Space 2
http://store.steampowered.com/app/47780/ - £29.99
http://goo.gl/qnmbw (Amazon) - £14.91

I can't see how this can be justified. A retail copy requires a disc to be created, packaging to be designed and created and also distribution to be handled. An overhead that surely can't be more expensive than uploading to Steam?

Unless Valve are charging an absolute fortune to host games nowadays, which I see as unlikely.

On that note I noticed Portal 2 was actually cheaper on Steam

http://store.steampowered.com/app/620/ - £26.99
http://goo.gl/EcARI (Amazon) - £29.99

Some games barely change (Dragon Age II is only a pound cheaper retail) but some games (such as the older COD editions) are still more expensive even now.

Any thoughts? Maybe I've missed a major point...

[Ark11]

I think it's cause the video game retailer strike that happened a couple of months ago got a Tax put on all Steam products.

[Kosire]

It's a competition like any other, while retail you can pay for cases and whatnot on steam you can pay for bandwidth. Also steam cannot just set the price for black ops to 20 dollars cause Activision wants a specific price for it.

Also I see that in europe everything becomes expendsive cause 1$=1€ and that's fucking bullshit for us. In Denmark, norway and sweden we don't use euros but in UK they got their will of paying pounds instead of euros.. Why not put in ALL the currency in eu instead of just pounds and euros..I liked it way more when it was dollars, that was CHEAP for us europeans.

[grabbie]

Bandwidth on steam is considered to be the same as Netflix (which is estimated at 0.03 per GB). If this is accurate or close to what valve pays, bandwidth costs isn't even a major factor in calculating the higher game prices.

[Mighty Monk]

$1 also equals £1 on Steam.

Us Brits don't get some sweet deal either y'know!

But I think it is annoying Steam is more expensive than retail; look at the new MMO Rift. They want £29.99 for standard edition, or £39.99 for the Collectors (what's collectible about a digital copy anyway?)

I can get the Standard Edition for £23 the last time I checked on Amazon. What gives!

[Blink]

I think it's cause the video game retailer strike that happened a couple of months ago got a Tax put on all Steam products.

This can't be the reason.

• They would need to list the tax
• The price difference varies greatly across the board

[Plague]

Probably stems back to the company's choice in price.
But that is a large gap.

[Major Banter]

I expect it's to do with the fact a CD, DVD or Blu-Ray is ultimately going to be lost/broken/scratched/run out of installs.

Steam provides the rather nice service of infinite installs, no lost discs, no DRM, constant and permanent access to your games anywhere on the planet. And pure convenience - a few clicks and you're downloading a brand new game.

They charge that much because they simply can. There's no competition whatsoever against Steam.

[Plague]

Steam provides the rather nice service of infinite installs, no lost discs, no DRM, constant and permanent access to your games anywhere on the planet. And pure convenience - a few clicks and you're downloading a brand new game.

Steam is the DRM.

[cheesemoo0]

They charge that much because they simply can. There's no competition whatsoever against Steam.

Just because Steam is currently the leader in digital sales for video games does not mean it is without competition. That would be like saying Windows doesn't have any competition.

...and permanent access to your games anywhere on the planet.

Also wrong for several games. Like you can't buy TF2 in Russia and then try to play it in the US. They do this so people don't buy games at reduced prices in other countries.

[Mighty Monk]

If I buy my game here in the UK surely I can go to anywhere in the world with an internet connection and download it?

[Text_Fish]

Amazon pretty much invented the concept of loss leaders. They discount the fuck out of everything because they make their money out of volume and crossover sales. This goes for games, books, kitchen utensils, paper lanterns and anything in between. As well as seeming to compensate for delivery costs and the two to three day wait, it encourages customers to buy more in each purchase to cut down on P&P per item. They also know that bricks'n'mortar retailers can't possibly compete with such aggresive pricing so they'll pinch some customers from there as well as from places like Steam that could probably afford to discount their games a bit but don't really need to because they offer such a great service.

Furthermore, Amazon's distrubution costs will generally consist of physical post and packaging costs, where as Steam's equivalent is Bandwidth. P&P is just as liable to go wrong [items being lost or damaged] as Bandwidth, but the difference is, when P&P goes wrong it probably only effects a handful of customers, but if a server goes down it's going to effect thousands and probably have knock-on effects because Gamers seem to be much less accepting of technical failures. This all adds to the overheads.

Basically, Amazon is a faceless corporation that just wants to sell as much shit as possible as quickly as possible and therefore as cheaply as possible and it doesn't matter what that shit is, whereas Steam is the "face" of a passionate company who genuinely want to encourage gaming and gamers. The quickest way to devalue any product or industry is to discount it too much.

All that said and done, when Steam do have Sales they're out of this world so it's usually possible to pick up a proper bargain if you're prepared to wait a few months. I imagine they stagger these sales to ease the strain on their servers.

[Dr. Delta]

Games here in the Netherlands on steam are way overpriced, you can buy new games in retail for around 45 euro's while they cost like 60 on steam, and they just cost the same in dollars in America, which is rediciolus since 1 EUR = 1.38 USD.

So Idk why it's more expensive here than it is in America? Hosting and all that kind of stuff here in the Netherlands is cheaper and better/faster than in America, so it's not like that they up the price because it's really expensive for them to operate here. We have the largest internet exchange in the world and the 2nd largest when you look at the peak-range; so hosting and being online isn't going to be a problem for VALVe here. But I guess they just do it so they can away with it, and work on EP3/HL3 for 10 years.

[Woe Kitten]

Valve doesn't set the prices on Steam, the studio/publisher that released the game does. Usually Valve games are cheaper on Steam but not always. I'd say that the reason that some games are more expensive on Steam is that publishers know that people will pay more.

You could probably make a fair case saying something like this:

Steam actually adds value to the game that isn't available from a packaged product, such as the ability to re-download the game, auto-updates, steam community integration, cloud, etc., so why shouldn't we charge more for the Steam version than the packaged version.

I'm not saying I agree with that argument but it could be seen as fairly persuasive.

[Dr. KillPatient]

Steam provides the rather nice service of infinite installs, no lost discs, no DRM, constant and permanent access to your games anywhere on the planet. And pure convenience - a few clicks and you're downloading a brand new game.

Steam is the DRM.

I never considered it DRM until I knew the technicalities of such things. The convenience far outweighs the DRM factor, in my opinion, and that sort of makes up for the price increase. I've noticed that Valve games are ridiculously cheap at times, especially Steam sales.