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Other interesting stats for Steam that weekend:
1) 35% increase in sales with 10% off
2) 2.45x increase in sales with 25% off
3) 3.2x increase in sales with 50% off
4) 14.7x increase in sales with 75% off
1) 35% increase in sales with 10% off
2) 2.45x increase in sales with 25% off
3) 3.2x increase in sales with 50% off
4) 14.7x increase in sales with 75% off
With normal goods, there's only so much discounting you can do without getting too close to cost. But with products like games and movies, they do not have high material costs (probably $2 or less for disc pressing, printing and packaging), so the only major costs are from the production phase (paying programmers, cast/crew), which usually doesn't increase after release (there is tech support though). So the more they sell, the more they make, regardless of the price. With digital distribution, the costs are even less to become almost negligible.
So to put the above 4 sales stats into real numbers:
1) $100 in sales becomes $121.5
2) $100 in sales becomes $183.75
3) $100 in sales becomes $160
4) $100 in sales becomes $367.5
Offering the *most* discounts seem to indicate the *most* increase in revenue: if they priced all games at 75% off, then this will translate to 3.7 times more revenue.
This works really well because low prices convert people who pirate into people who buy, much more effectively than DRM or policing. And there is also the "it's so cheap, I will get it even if I don't want it" factor, which I'm afraid to say, I've fallen victim to many times.
All it will take is a game company with guts to release a hit title at 25% of the usual price (say $15 for the boxed version, $10 for the download) - it would then be really interesting to see the sale stats on that, and also compare the piracy rate to a normally priced ($40) game. I think they will be pleasantly surprised. And they would also save money that otherwise would have gone to Sony DADC for SecuROM protection.