Steam Sales “cheapens your IP,” Says Origin SVP

EA’s digital download service won’t be offering the super deep discounts of rival Valve’s Steam, says David DeMartini, head of Origin. Speaking on those wallet-busting sales:

Obviously they think it’s the right thing to do after a certain amount of time. I just think it cheapens your intellectual property. 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. The gamemakers work incredibly hard to make this intellectual property, and we’re not trying to be Target. We’re trying to be Nordstrom.

He continues:

“Also what Steam does might be teaching the customer that ‘I might not want it in the first month, but if I look at it in four or five months, I’ll get one of those weekend sales and I’ll buy it at that time at 75 percent off.’

Now, try and keep your jaw up: he’s right. No, there’s nothing wrong with giving consumers uber deals that benefit the small publishers or indie devs. No, there’s nothing wrong with deep discounting to sprout sagging sales. No, there’s nothing wrong with the customer waiting for the best deal; that’s what you’re supposed to do as a consumer.


… the movie industry tried the same thing and effectively knocked itself out of the home media market. DVD sales began to top out. The growth within the home media market began to evaporate. Why? Bad economy? Sure. Anything else? Bottom dollar DVD bargain bins.

Ever walk into a Wal-Mart and stare in awe of the $5 DVD bin? It’s overflowing with deals that are absurd, but what happens at a consumer level? They walk right past the $20 new releases. People stopped buying those shiny new releases because they became smarter. The allure of DVD began to wane, or rather, began to wane because customers grasped that waiting netted them substantial savings. They could buy four movies for the price of one, and if Netflix has proven anything, people don’t care if the movie is brand new on shelves or has been sitting there for eight months. They want cheap entertainment.

Therein lies the reasoning for why the movie studios are pushing Blu-ray at a higher margin price, but a better value. They include DVD and digital copies inside Blu-ray cases to spruce up the packaging, allowing the value to stay high along with the price. The idea that Blu-ray is anything less than a premium product -at least from the major studios- is not happening.

Let’s look at this from the Steam perspective. There’s a summer sale coming up. Super-Steam fanboys on Reddit are gearing up for the sale with comics boasting as to how their digital wallets will be drained of funds… and what are they buying now? What have they bought since the last sale? What are these sales doing except flooding a digital locker full of games a lot of people don’t even play? What have they skipped out on buying at full price knowing full good and well they’ll get it for a tenth of new cost later?

If you purchase a copy of say, Dead Space on Steam for $3 on sale but don’t play it, who benefits? EA? Steam? No. They gain practically nothing. Just because the unit sales go up doesn’t mean exposure or franchise investment does. The same goes for the home media industry. The idea of getting a low-priced copy of Transformers on DVD is great, but it you only bought it because it was cheap, the process isn’t working on a business side. The studios tried this model, and it failed.

Why would Origin?