Steam's regional pricing changes: a big deal?

Or just clearer for indies? Also: what Xbox's latest results mean, and more.

[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & company founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s.]

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Steam’s regional pricing changes - what’s up, doc?

Some (or many!) of you may have noticed Valve’s big regional pricing announcement around Steam late on Monday. For anyone who didn’t, here’s the main things to bear in mind:

• There’s a new bulk pricing tool for Steam games, which includes: “A clear summary of price changes, with warnings for currency prices that are drastically higher or lower than the rest of your currencies; An integrated CSV import/export with a preview function; A simplified flow for updating all packages to match recommended currency conversions.”

• Almost all regional pricing suggestions for Steam games changed, too. As Valve sez: “We're also updating our pricing recommendations to provide more accurate guidance to developers who choose to use those suggestions. As always, these are purely recommendations, and developers will continue to set their own prices across all currencies on Steam.”

So, a reminder: this doesn’t change any live prices of games on Steam. And if you do decide to change prices on your own games and even just one of them increases, you can’t be discounted on Steam for another 28 days. (Many devs are waiting until after both the Autumn and Winter Sales to tweak, based on these new suggestions.)

Firstly, I think this change is appreciated by devs, some of whom were feeling forced to tweak certain currencies like Argentina and Turkey above Valve-recommended values - to stop ‘lite piracy’ in those regions - and then getting yelled at by players.

And there was definitely information asymmetry between the larger publishers - many of whom over-rode Valve’s recommendations anyhow - and the smaller indies, who didn’t have enough macro-economic background to change Steam’s estimates.

This change means the players may still be yelling, but it’ll be partly at Valve, who spent a long time - presumably using their on-staff economist - using “purchasing-power parity and consumer price indexes” to tweak the recommended values. (They’re promising to “take a close look at these recommendations on an annual basis”, btw.)

As for the exact changes, SteamDB did a great blog post comparing the ‘before’ and ‘after’ values for different price points. Here’s the suggestions for $19.99, for example:

What seems to have happened is that the strength of the U.S. dollar - and the particular weakness of select currencies - has been leading to underpricing. For example, many thought that USD and Euro prices should already be closer to 1:1, and you’ll see Valve is also suggesting this (+16% Euro.)

The headline increases are where you’d expect - in Turkish Lira (+494%) and Argentine Peso (+522%). But there are some other semi-surprising changes - Polish Zloty up 28%, for example, and even Japanese yen up 12%. But if you think how long it’s been since these prices were changed & currency fluctuations - perhaps it’s not that surprising?

A couple of final points, here. Firstly, this doesn’t mean that all new games magically make lots more money on Steam. These are just ‘more correct conversions compared to what you charge’. And the biggest non-U.S. countries didn’t increase prices by that much. (Heck, you could even decide to shift your game’s overall USD price point down a bit, because of the strength of the dollar.)

Also since a lot of the biggest-earning AAA games on Steam already made their own custom price decisions which were close to - or even exceeded - these values, the net result, I think, is the right one. It helps smaller devs set the right prices.

It won’t always feel good for players in some smaller countries affected by ‘price increases’ in the future. But it’s doing what my ideal of a platform should - fixing information asymmetry, and trying to be fair to everyone.

Xbox’s earnings keeps Game Pass growth cryptic!

So yes, it was Microsoft’s latest quarterly financials yesterday - which the market didn’t love, btw, partly due to weak demand for PCs (& therefore Windows), even though it posted $50 billion in revenue and $17.6 billion in profit. (Jeez.)

For Xbox specifically, hardware revenue was up 13%, and Xbox content and services revenue was down 3%, “with lower engagement hours and higher monetization, partially offset by growth in Xbox Game Pass subscriptions.” Woo, Game Pass?

TweakTown’s Derek Strickland listened to the Microsoft earnings call and noted: “Gaming was on the back burner. No one asked about Game Pass, Xbox, or Activision. It was all cloud, Azure, and advertising.” It’s easy to forget that Xbox is a small part of MS.

Still, there were some interesting top-line Xbox boasts, as viewable in the call transcript, and we’d love to go through them with you:

• The highlights chose to de-emphasize Xbox hardware: “We saw usage growth across all platforms, driven by strength off-console… PC Game Pass subscriptions increased 159 percent year over year.” (Perhaps this is partly due to the big ‘Xbox vs. PlayStation’ fight over ActiBlizz. If you’re saying how much better PlayStation hardware is doing in gov filings, you don’t want to be pushing Xbox hardware growth here.)

• On that specific PC Game Pass stat? It’s an odd one, because most people get access to PCGP via Game Pass Ultimate. We’re estimating PC-only Game Pass titles for our upcoming GameDiscoverCo Pro offering, and we think Total War: Warhammer III has about 300,000 Game Pass owners of any kind (Ultimate or PC-only). So sure, PCGP is ‘up 159% YoY’ - but that’s off a pretty low base number. (We’d be surprised if PC-only Game Pass is >1 million subs.)

• Also said: “With Cloud Gaming, we’re transforming how games are distributed, played, and viewed. More than 20 million people have used the service to stream games to date.” Some of this is Fortnite being available for free without a Game Pass sub. And most of the rest is likely the ‘stream cloud instead of downloading the game’ option on Xbox consoles. Like PC Game Pass, cloud growth here is a long-term goal.

• Finally, an interesting fact: “Nearly half of the [Xbox] Series S buyers are new to our ecosystem.” Would love to know more - how does that compare to Series X, or previous Xbox consoles? It could well be that PS5 shortages have driven players onto other consoles. Or it could just be a cherry-picked stat that sounds nice…

What’s also notable is that - again - there was no update in the total number of Game Pass subscribers. (The last milestone was 25 million active subs in January 2022.) So it’s difficult to see where GP numbers are going - other than slight overall revenue growth.

So, yep. Game Pass has been a boon in growing overall Xbox revenue, and setting up a multi-hardware platform opportunity. It’s also cleverly shifted the narrative - Xbox is ‘providing you the benefits of Game Pass’, rather than ‘running a store that sells you games’.

And breaking news as we go to press - Phil Spencer was at the WSJ Live event, and said that Game Pass “will stay in that 10-15% of our overall revenue, and it's profitable for us”, and: “We’re seeing incredible growth on PC.. on console, I’ve seen growth slow down, mainly because at some point you’ve reached everybody on console that wants to subscribe.”

The next question is whether these ‘hopeful’ stats on PC and cloud (and mobile) gaming can be backed up by meaningful off-console revenue & usage growth, as a percentage of the entire business. (And if Microsoft will tell us if it isn’t, or just push up the yield on existing subscribers, which also works for ‘em.)

[BTW, more signs that Microsoft is serious about growing PC Game Pass over time? The biggest ending logo on the new Age Of Mythology Retold trailer? One for PC Game Pass.]

The game discovery news round-up..

Finishing off the free newsletters for this week, let’s take a tour around the most notable game discovery and platform news that’s popped up since Monday:

• As more long-running ‘pay once’ games carefully add monetization, interesting to read how The Long Dark is transitioning to paid DLC, with a Steam blog explaining the $20, 12-month Expansion Pass for Tales From The Far Territory, alongside continued free updates for the base game.

• As The Verge notes: “It looks like Discord voice calls will be available on the PS5 soon. Twitter user advaith, who regularly discovers Discord features, has unearthed Discord PS5 voice integration in the mobile app.” Perhaps not on PS4, though?

• A little more context on that ‘30 million Steam users online’ milestone: “‘Only’ about 8.5 million (28%) of them were actually playing a game at the time. That’s about normal, for the record.” And on recent growth: “The first ten million [simultaneous] users took more than a decade. The second? Five years. The third took less than two.”

• Apple continues to tweak enforcements to get its 30% iOS App Store fee - the latest being social media post ‘boosts’ and NFT-related purchases, for which Epic’s Tim Sweeney has a view: “To crytocurrency detractors, this shows Apple's motivations are only money. For digital items, they support NFTs they tax, and ban NFTs they don't tax.”

• Presumably also co-streamed, The MIX Next 2022 is tomorrow (Thu, Oct. 27th) starting at 10am PT, 1pm ET, 7pm CET, and includes three ‘indie game showcase’ parts: "MIX Next Showcase, Publisher Spotlights (Akupara Games, Assemble Entertainment, Raw Fury and tinyBuild), and Black Voices in Gaming.” Worth checking.

• RoboStreamer is a new(ish?) paid service specifically for easily streaming video to your Steam broadcast page: “With RoboStreamer, you can upload videos and have them streamed in a loop as long as you wish… you can set up simultaneous broadcasts to as many pages as you want… from a single account.” Handy.

• The U.S. game ratings board the ESRB (part of the ESA) talked to Axios about early challenges & recent proliferation - almost 320,000 ratings assigned in the last year, largely via IARC. But hmmm: “While [the ESRB’s Patricia] Vance says that in-game spending has become a top concern for parents - and something the ESRB labels - she says that parents aren't that concerned about loot-boxes, and that the ‘random elements’ labels were added more for traditional gamers.”

• Tools round-up: SteamDB’s Discord bot is now public, so you can look up real-time CCU for any game in your Discord; Streamladder is a free/paid service which converts your Twitch clips to TikTok, Reels and YouTube Shorts; you can check Steam front page ‘takeover’ ads via this SteamDB page or this thread from my colleague Alejandro.

• It’s sorta a stealth ad for Patreon, but the platform did a survey of creators (largely video-based ones?) which said: “70% of creators say they feel screwed by big tech platforms (ie. Instagram, Facebook, YouTube), yet over 60% say they primarily rely on these platforms to showcase their creative work.” There’s a .PDF with interesting graphs (above) in it, too..

• What is a good median playtime for a demo on Steam? Turns out Chris Z. has a whole new blog post about that: “Average playtime: 19.75 minutes; Bottom 30th percentile = 10 minutes; Median playtime: 14 minutes; Top 70th percentile = 22 minutes.” But top-selling titles are more like an hour average/median. Fun data!

• Esoteric & weird microlinks: Twitch’s CEO on streamer employment status: “It’s not quite a W-2 job and it’s not quite a contracting job”; a history of Raph Koster’s ‘declaration of rights for virtual world players’, back in 2000; amused by this ‘demo-scene’ showcase running on a European pharmacy electronic sign. (Games are next?)

Finally, you may have noticed that Marvel Snap, the quick-play new F2P card game from ex-Hearthstone veterans, is doing great. (Mainly on mobile, though there’s a semi-experimental Steam version that has 8k CCU.) But here’s something else:

Simon Carless @simoncarless

Marvel Snap doesn't just nail the post-Hearthstone 'now this is a good card game' landing, it's also got the 'Chinese game companies -> West' trend going on. How? 1. NetEase invested in the dev (seconddinner.com/press-release/) 2. Bytedance is publishing (gamesindustry.biz/gaming-arm-nuv….)

[We’re GameDiscoverCo, an agency based around one simple issue: how do players find, buy and enjoy your premium PC or console game? We run the newsletter you’re reading, and provide consulting services for publishers, funds, and other smart game industry folks.]