During Steam’s Monster Summer Sale, I noticed something during the Tom Clancy franchise sale. The price of the upcoming Rainbow Six: Siege is $80 CAD. The US dollar price is $60. If you were to pay for the game in USD and have your credit card company convert it to CAD, a Canadian customer would spend $73. That’s an inexplicable loss of $7 as a sort of living in Canada tax (when no sales tax is charged by Steam in Canada) from a company whose biggest development studio is in Canada and receives subsidies from various levels of Canadian government.
It’s not just the Canadians who are losing out for not living in America. According to the Steam All Region Price Checker extension, British customers are being charged the equivalent of $80 USD and others in the EU will be paying the equivalent of $68 USD.
So why are certain countries paying more than other and who is at fault for the price discrepancies?
When Steam launched the 2014 edition of the Steam Summer Sale, it came with a new wrinkle that no one saw coming. No, I’m not talking about the four packs of Community Picks. This time out, Steam introduced the Summer Adventure to the sale. While it looks like a little competition between users for prizes, it’s actually another quiet way for Valve to make a few dollars more from Steam.
It’s been six months since Steam introduced their Trading Cards. When they first launched, I was utterly confused as to why anyone would be interested in virtual trading cards that had no purpose and no value. It just seemed like a way for Valve to make some money that no one would buy into.
However, having just completed the Steam Holiday Sale, it’s readily apparent that Valve has hit a home run with the Trading Cards. It’s not just the transaction fees that are making Valve money. The spin-off effect from Trading Cards does just as much to make Steam even more profitable.
At the beginning of January, I wrote up a detailed breakdown of how much a publisher actually makes for each new copy of a game they sold. With today’s release of BioShock Infinite, I thought it would be a good time to apply these numbers to a practical example to show how profitable games actually are.
A few weeks back, one of the hot stories in the video game world was that Call of Duty: Black Ops 2 reached gross sales of $1 billion in only 15 days. What sounded like good news for publisher Activision was quickly reigned in by writers pointing out that CoD: Blops 2 sold fewer copies to reach $1 billion of gross sales than 2011’s CoD: Modern Warfare 3.
This raised an interesting question in my mind: How profitable are video games to make? Even if Blops2 sold fewer copies, shouldn’t Activision still have covered the sunk costs of development and marketing after paying for the variable costs of each unit sold? Read the rest of this entry