Origin opts for long-term strategy over mass sales
Steam sales may pay dividends in terms of units shipped, but this comes at a real cost to the value of IP, says EA's David DeMartini.
In an interview with Games Industry International, the boss of EA's digital download service Origin pointed to differences between his company's attitude and that adopted by Valve's rival Steam service.
Steam offers regular sales of entire catalogs of games, slashing prices by as much as 75 percent.
"We won't be doing that," said DeMartini.
"Obviously they think it's the right thing to do after a certain amount of time. I just think it cheapens your intellectual property."
Advertisement
To DeMartini, the problem is one of massed short-term sales versus long-term profits.
"I know both sides of it, I understand it. If you want to sell a whole bunch of units, that is certainly a way to do that, to sell a whole bunch of stuff at a low price," he explained.
"The gamemakers work incredibly hard to make this intellectual property, and we're not trying to be Target. We're trying to be Nordstrom.
"When I say that, I mean good value - we're trying to give you a fair price point, and occasionally there will be things that are on sale you could look for a discount, just don't look for 75 percent off going-out-of-business sales."
He went on to clarify that Valve's "old-school" approach of slashing prices to reflect the cost of sales was only one way of doing things, hinting that EA's own attitude was that value can be extended over time by engaging with the audience.
"We don't have the old-school approach that you're describing," said Demartini.
"We're all about building as big a universe as we can, and there are multiple ways to build the universe. One way is to discount the price, the other is to form a longer-term relationship with them and draw them in that way."
This is directed to David DeMartini, from a person who works in the game industry: David we are all entitled to our own opinions, but yours happens to be dead wrong. First off you were way to general about the IP’s that Valve (steam) has fire sales on. Are we talking about all the IPs in steams library or just the games Valve makes?
From what I’ve seen Steam has a three way strategic approach to how they apply a discount. The first is if the game has been out for X amount of months and sales start to slip they will give the consumer an incentive to buy the game based on Y discount.
If it’s an indy game and the sale start weak, they apply a discount to get the IP into as many hands as they can to do something called “word of mouth”. Sure you lose $ in the short term but if the game really takes off you get a fan base, from there ver 2 will make bank (or you would hope so).
The third is to make the game free (think of TF2). Why make it free?!? Won’t that devalue the IP? Nope because now you can buy, trade, items you get in other Valve Ip’s. Also remember that user that made $47,000+ on his created TF2 items (http://www.joystiq.com/2010/10/21/user-created-tf2-items-bring-in-up-to-47-000-for-some-steam-mem/). Just think about all the “keys” steam sold for the Mann Co. crates (TF2), so yes Valve happens to be A LOT smarter than EA.
So in concussion EA has again failed to see the big picture and now they hired Mr. Demartini to make them lose even more money, glad I don’t own any EA stock.
*conclusion (sorry for the spelling error, writing from my phone)
You really think he's going to say that his competitor's digital distribution is better than EA's??? In a month or two when he goes to work for Zynga he'll say that EA sucks or some other type of spin.....that's what these guys get paid to do.
Origin has more to worry about like the failing bf3 title. They have ruined a good series by greed and inability to deliver a polished product. The newly released premium service has split the fan base and latest patch has turned the game into an alpha release game.The priority que has and will cost them.
The first game I got on Origin was Battlefield 3. The only reason is because it's mandatory. Since October last year, when BF3 came out, I have bought 0 games on Origin. My steam collection, however, has practically doubled with the purchase of at least 20 games - the Christmas sale being a prime culprit. Honestly, I've not even had a chance to play all of those games properly, but when they drop below a certain price into "impulse buy" territory, it's hard to resist. That's steam's real secret and that's why I probably will never buy anything else on Origin.
Honestly, what business doesn't do sales?
This is one of the most ridiculous comments i have ever heard in the industry(along with Kotick's "I would raise game prices higher if I could"). I work in a small/middle sized publishers own gaming studio and the prices and sales that happen on steam come to 100% from them. You set your own prices thats how it works. So all the "fire sales" are from the developer/publisher and if you are making great money you are not going to do that. It happens mostly after the first couple of months or weeks when the initial sold unit per day drops significantly. And what does he even mean with "it cheapens your intellectual property"?? Are we selling Ferrari's? We are not making an elitist product. we are making (as corny as it may sound) entertainment for the everyday people and the best way to make money on that is to get it into as many hands as possible.
TBH i myself wouldn't / couldn't buy every game i play and own if they always were full price since i probably don't even make the eighth of what you make.... And then you try to justify the 'greedy' approach by saying you would never do a 75% sale since it cheapens your game. I hope Origin will burn and crash under your management so you can see the 'value' of 'cheap' products...
I understand there is a lot of pressure for people in your (David DeMartini's) to say the right thing, represent the companies goals, and still attempt at sounding human. I know it's difficult, so hear are some suggestions:
You are coming from EA. To the more passionate gamers, you are a vastly more evil company than Valve who, essentially, can do no wrong.
Valve and Steam are at the Heart of PC culture. They are here to show you how communities can be built around an industry everyone thought was dying.
Do not use analogies if they do not make sense. Valve is more like Toys R Us, where pretty much every gamer can find something they enjoy. Toys R Us maintains a lot of nostalgia as well. EA, maybe more like Best Buy, where its considered more "Adult" with "Big boy toys." Target sells everything, even food now, and while being more "Premium," Nordstrom only sells cloths.
I just feel his comments were dedicated to shaking people up. I'm sure it will, but I don't like when people do it and seem vengeful.
EA doesn't want to be Nordstroms, they want to be Bank of America.
im a freshman business student and I kow that EA veep is full of shit, if your not moving product your not moving it, waiting for a game to go out of style or hoping it comes back in to fashion (as a gamer I know this is all but impossible) it is far better to move it on the cheap then let it set" I know its digital so no warehouse to ship from but still. this is fu*&ing 101 shit guy, im not even an intern yet and I have a better sense and knowledge of the industry than this supposed titan,,,cant wait to get a job imam crush old fogies like this idiot
