In response to retailers lambasting Steam and threatening to ban it from stores (some quotes):
I remember fondly the meeting in my office with a red-faced publisher who was explaining why their initial order from a major retailer for one of our new releases was just 30 units. At the time I had my browser open on the Steam product data page, which updates sales numbers every few minutes.
“They have taken one unit for each of their top 30 stores” he told me. “There is just no demand from their customers”.
I glanced at my screen, hit refresh and advised him: “In the time it’s taken you to tell me that there is no demand, Steam has sold 45 units”.As a generalisation, retail would pay these guys a maximum of 40 per cent of what they made. So on a £29.99 game the publisher would receive about £12 (and on a sub-licensed deal, we would then only get about £4.25 of that) – minus return, write down and consignment costs.
When would we get that money? Well, payment would be by the end of the quarter.
So, let’s say £10 per unit sale goes to the publisher, £3 to the developer/sub-licensor, and it’s in your bank five months after the customer has paid out £30.
Compare that to the digital model. On a £29.99 sale, the digital partner will pay the publisher – or in many cases direct to the developer – between 60 and 70 per cent, by the end of the month following the sale.
Wow. To recap: on a sale over the counter today, we can have our £3 by the end of March, or on a digital sale, we can have £20 by Christmas.
Remind me why we should choose to go with retail and decline to let Steam sell the game?
Steam is here to stay. Retailers needs to communicate and work with publishers, rather than dictate and pontificate to ensure the same can be said for them.
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