Steam Summer Sale may have succeeded by dropping flash deals

By Marshall Lemon, Saturday, 9 July 2016 16:08 GMT

2016’s Steam Summer Sale was the first without daily or flash deals, which worked in its favor.


Steam Summer Sale seems to have grown from dropping flash deals

As we’ve already mentioned, the latest Steam Summer Sale was a phenomenal success for Valve, raking in almost 50% more revenue for a grand total of $236 million. Now Sergey “SteamSpy” Galyonkin has posted his full financial report, and an interesting theory emerges – Valve earned all that money by removing traditional flash and daily deals.

In case you’ve never participated in a Steam sale (somehow), Valve’s flash and daily deals are additional – but temporary – reductions in price lasting anywhere from 8 to 24 hours. In theory, they encourage customers to constantly visit Steam across the entire sale’s duration just in case the most anticipated game ends up with an extra discount. While that makes sense, Galyonkin thinks it actually harmed sales in the long run.

“While sounding exciting, these deals incentivized people to wait for the best deal possible instead of buying already discounted games,” Galyonkin writes in his report. “Last year the sales were spiking around the first and the last day of the sale. This year they were a bit more evenly distributed across the whole sale period with a spike around the first weekend.

“The removal of daily and flash deals also made developers more cautious with their discounts. An average discount this year was 50%, instead of the 66.67% from last year. While one could argue that this is a bad deal for consumers, I’d say consumers will be better off if the game developers don’t go bankrupt in the long run.”

In other words, while flash discounts sound great, they prompt customers to only make mass purchases on the last sale day instead of smaller purchases across the week. Removing them freed players to make regular purchases and impulse buys, even if the actual discount wasn’t that significant.

What’s more, SteamSpy’s figures actually back this up, with smaller discounts bringing in higher revenue. “The median revenue for the games with a 75% discount was $33.5K this year ($40K last year), $40K for 66% ($75K), $60K for 50% ($90K), $106K for 33% ($90K) and $120K for 25% ($90K last year). There was only a handful of games discounted by 10%, most of them being recent releases.”

In other words, we probably shouldn’t be surprised if flash and daily deals disappear from Steam’s Fall and Winter sales as well.

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