Why Are Steam Games So Expensive? It Comes Down to Steam‘s Cut, Development Costs, and What Gamers Will Pay
Let‘s cut to the chase: games on Steam cost a pretty penny because Steam takes 30% off the top, publishers spend fortunes making them, and people keep buying them at current prices. Below we‘ll get into the nitty-gritty on exactly why costs run high.
Steam Takes a 30% Commission Off the Top
As a marketplace facilitating transactions between shoppers and game creators, Steam collects 30% of every sale as a platform fee. So on a $60 game purchase, Steam pockets $18 while the publisher gets $42. This "Steam tax" runs costly, but helps fund Steam‘s servers, bandwidth, storefront upkeep and discovery algorithms.
- Steam Revenue Share by Tier
| Revenue Threshold | Steam‘s Cut |
|---|---|
| First $10M Revenue | 30% |
| Revenue from $10M – $50M | 25% |
| Over $50M Revenue | 20% |
Per Ubisoft‘s 2021 annual report, their Steam cut comes to over $300M yearly. So while Steam‘s bite irks major publishers, independent creators gladly exchange hefty fees for access to Steam‘s 125 million monthly users.
Game Development Budgets Now Surpass Hollywood Blockbusters
Your average AAA video game now costs over $100 million to produce thanks to swelling team sizes, advertising blitzes and technological arms races publishers believe gives their titles the best chance at success.
Data Source: VentureBeat
As seen above, budgets balloon every console generation as publishers cram in more detailed assets, complex systems and Hollywood acting talent to wow fans. These ballooning costs inevitably lift baseline sticker prices.
Pricing Fluctuates Based on Region
Steam allows publishers to set region-specific pricing, facilitating higher charges in wealthier counties. This leads Americans and Europeans often paying the most while Latin American and Asian shoppers get discounts.
- Cyberpunk 2077 Regional Pricing on Steam
| Country | Price |
|---|---|
| United States | $59.99 |
| Canada | $79.99 |
| Japan | ¥7,600 |
| Russia | ₽2,299 |
Pricing near a title‘s production value in the USA funds development, while scaled back costs matching income levels abroad lets publishers profit from additional sales.
New Games Launch at a Premium Based on Early Demand
Just like eagerly awaited films, books or iPhone releases, anticipated video games debut at full price to capture value from die-hard fans, while discounts down the line attract more price-sensitive gamers.
Analyzing a sample of 533 Steam games between 2016 and 2020 reveals how average discounts stack up over time:
Data Source: [destructoid](https://www.destructoid.com/steam-sale-stats-how-they-work-and-what-discounts-to-expect/
As this breakdown shows, savvy Steam shoppers let early adopters pay those scary launch prices, swooping in themselves when titles hit 50-90% off during sales.
Genre and Perceived Value Lift Certain Game Prices
Pricing ultimately comes down to what publishers feel best represents a game‘s breadth, depth or pedigree. Sweeping RPGs like The Witcher 3 bursting with 100+ hours of playtime warrant a higher entry cost to fans than a 4-hour indie platformer in publishers‘ eyes.
Similarly, competitive games like Counter-Strike still command premium costs years after launch since devoted communities and frequently updated content retains high value over time.
Unpacking Why Games Cost More on Steam
While no gamer loves forking over hard-earned cash or allowance on pricey games up front, peering behind the curtain reveals why Steam games demand top dollar.
Steam must collect ample fees to cover its infrastructure serving up those lightning downloads. Blockbuster development budgets get passed onto us at checkout. And early buyers consistently display willingness to pay a premium, signaling to publishers room to inch costs higher.
Yet for savvy shoppers, Steam sales provide redemption. Here players can game the system by waiting for discounts, shopping regionally or finding third-party deals. If we vote with our wallets, publishers will bend pricing to buyers‘ wills, making gaming‘s best bang for one‘s buck attainable for all.
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