There are 3.5 million people using Steam right now. Overnight, there were 5 million. Many of those people are there with one, single aim in mind: to take advantage of Steam’s ridiculous summer sales.
Steam’s sale prices, generally considered by all and sundry to be a good thing, have been an unusual talking point lately. David DeMartini, the head of EA’s competing digital download service Origin, famously said in early June that Steam’s sales “cheapen intellectual property” by teaching consumers that they just need to wait in order to grab games for massive discounts.
Confusingly, even EA’s games are on sale through Steam for criminally low amounts of money. Crysis went on a flash sale yesterday, allowing me to pick up Crysis, Crysis: Warhead, and Crysis 2: Maximum Edition for a paltry $19.99. Mass Effect 2 is half-price at $9.99. Dead Space 2, Bad Company 2, The Sims… the list goes on.
Meanwhile on Origin, the same games are twice the price. They’re not having a sale.
“We’re not trying to be Target”
This isn’t surprising, after all: DeMartini went on in his interview to liken Steam to Target, and themselves to Nordstrom – or for our Australian purposes, let’s just say David Jones.
DeMartini’s claim that deep discounting cheapens intellectual property is certainly an interesting one, but it’s the idea that Origin offers a somehow more up-market game service that is actually legitimately confusing. This isn’t some sort of situation where the games you buy on Origin are somehow better quality, or less likely to crash, or more efficient on your CPU cycles. It’s literally the same product in every way – only more expensive.
If you go to David Jones over Target, you might expect that you’d get access to different, more costly brands. Maybe you do want to pay more and get the Scanpan set of cookware, rather than rummaging through Target’s frying-pan bargain bin. That’s fine. But if I buy Mass Effect 2 from Origin over Steam, I’m still getting Mass Effect 2. I’m not getting Mass Effect 2: Optimised Edition (Now With Fewer Bluescreens).
Origin not only doesn’t offer a superior quality of games, but it actually can’t. If the games you purchased from Origin were better than those of Steam or any other download platform, there’d be blood in the streets.
They have to offer the same product that’s available everywhere else, so the only room left to establish the upmarket brand that they’re seeking to cultivate is in the service they provide.
So far, it seems that the only thing that differentiates their service is a client with less functionality, and a range of games at generally higher prices. Needless to say, the PC gaming community hasn’t been quick to embrace it. This is a shame, because so far Steam has an effective monopoly on the digital distribution service, and EA is in a position where they could be the ones to break that monopoly.
There’s certainly a lot of ways that Origin could stand to improve. Hell, there’s certainly a lot of ways that Steam could stand to improve. But Origin’s (relative) new entry into the market means that it’s the new guy with a lot to prove, and so far it’s used the spotlight to make claims that only serve to annoy the people genuinely looking for a viable Steam alternative. DeMartini might have come to terms with the fact that everything Origin does is “going to generate a certain amount of reaction” from hardcore gamers, but that’s an unhelpful dismissal of what is, beneath the hyperbole, a consumer frustration with a product that lacks any real reason to voluntarily use it.
Origin is for companies, not consumers
From the original interview with Games Industry International, DeMartini’s approach is clearly outlined. EA wants to build Origin as a service – as a “universe”, in fact – one that encompasses all aspects and all platforms of your gaming life. It’s clear that they’re very serious about this goal, and they’ve thrown a lot of money behind it. But from a consumer’s point of view, I don’t look at a game on Origin and think “Great! I’ll buy this here, so that sometime in the future, my friends on the Xbox can see how well I’m playing!”
Instead, I think: “Wow, I could buy this on Steam for half price.”
And that’s because as it stands, Origin is not a consumer-facing operation. Rather, Origin is a company-facing operation. DeMartini’s comment that he doesn’t know if Steam’s deep-discount system “works as well for the publishing partners” is telling. His concern is primarily for developers and publishers, who do, as he says “work incredibly hard”, which fits in perfectly with the idea that having a sale on intellectual property “cheapens” it for them. It’s entirely correct to be worried about them. Nobody wants to rip developers off.
DeMartini also recently announced that indie developers who successfully crowdfunded a game would get 90 days of fee-free sales on Origin, to much delight from audiences. A fantastic and forward-thinking move to be sure, but again, one that directly benefits developers, not consumers. Consumers are left wondering: what’s in it for me? Will the price go up after ninety days when Origin’s fee kicks in?
The future of Origin
Origin’s immediate concern should be to start directly addressing consumers rather than publishers and developers. So far, Origin has coasted along on the popularity of EA’s core PC franchises, which is why forcing people to use it for games like Battlefield 3 was a smart business decision. They’ve used that leverage to get people in there, but now they need to figure out a way to make them stay beyond “this will be the only place to play Battlefield 4”.
At the moment, the most positive opinion you’ll hear about Origin from PC gamers is “Well, I’m only using it because I have to, but it’s honestly not as bad as some people say.” This is, understandably, not an ideal situation for a product. If all Origin has to offer are EA big-name titles, what happens when one of them is an inevitable flop?
When the consumer reaches for their credit card, they’re not buying into the potential future of Origin, into the “Origin universe” that David DeMartini is envisioning. The consumer wants to know, right now, what Origin offers them.
Unless there’s some economic reason I’m not comprehending, it seems like EA could start by lowering prices on their own games. The price of EA games on Steam incorporates a fee from Valve, generally believed to be about 30% of each transaction. So when the consumer sees an EA game on Origin for the same price as on Steam, it doesn’t take a maths wizard to work out that EA is just keeping Valve’s cut of the profits for themselves. And that’s fine – that’s the way business works.
But is EA actually under any obligation to price match? If they’re happy with the profit they’re getting on Steam sales – and presumably they are – then why not simply take 30% off their Origin prices and let the market run its course? At least that would give the consumer some reason to put Origin first – at the moment, it’s cheaper to buy EA games from a third party rather than through EA themselves. This is, to say the least, counter-intuitive.
“We don’t believe in the drop-it-down, spring-it-up, 75 percent off approach, but we’ve got something else that we do believe in that we’ll be rolling out,” said DeMartini in the same interview. What this “something else” is remains to be seen, but if it’s not something that immediately grabs consumers by the wallet, then nothing is going to change.
A tried and true formula
Steam’s rampant success, and the money-throwing furore that surrounds every single Steam sale, shows that consumers actually don’t care about cheapening intellectual property. In fact, they love it. For many people, it’s the time of the year they spend the most money on games. It’s also the time of year that Valve makes money hand over fist.
“If we thought having a 75 per cent sale on Portal 2 would cheapen Portal 2, we wouldn’t do it,” claimed Valve’s Jason Holtman. “If we were somehow on a cycle where you could see (a negative impact), you wouldn’t see us repeating it. We wouldn’t repeat it with our own games. We wouldn’t repeat it with partner games.”
With even brick-and-mortar kings Gamestop now rolling over and accepting that Steam’s approach to digital distribution has been overwhelmingly successful, EA are left in an odd position where they publicly claim that they’re not going to copy Steam, but not offering any real alternative. The bottom line for Origin is that unless consumers see a real reason to voluntarily use their product, they’ll continue to throw their money at Steam in droves.