The steep sales generate more players/buzz, and the games sell more afterward at normal price. - Edit 2
Before modification by Zalis at 13/07/2012 04:45:50 PM
So, even with the low profit for the sale period, it seems to be made up for by sheer volume and after-the-fact retail price purchases.
Unlike brick & mortar stores that have supply & demand, digital retailers create the "demand" out of thin air. (unless the game requires keys and they run out...which has happened) So, you put something on a too-good-to-be-true sale and people will buy it. When more people play the game, others get interested in the game, and so on. On a network like Steam, game promotion can be kind of viral.
At least I think that was how it was explained in one of the interviews I read.
Unlike brick & mortar stores that have supply & demand, digital retailers create the "demand" out of thin air. (unless the game requires keys and they run out...which has happened) So, you put something on a too-good-to-be-true sale and people will buy it. When more people play the game, others get interested in the game, and so on. On a network like Steam, game promotion can be kind of viral.
At least I think that was how it was explained in one of the interviews I read.