Valve Economics – Part II

So barring life getting in the way, this was ultimately the point I was trying to make.

The conclusion I stopped short of with my previous point, is the line between matter and energy is blurring. Valve is modeling this transition from post-capitalism into post-scarcity through Stout Shakos.

First, understanding the differences between electronic and physical distribution. Steam has done an excellent job of killing secondary markets – by binding game purchases to Steam accounts – profits made by secondary sales (used game market, eBay, inflated resale value for limited runs, etc) that do not go to developers. The elimination of physical media results in an infinite supply and the elimination of resale puts more of the money in the hands of the developers. Valve has taken two important steps, through their daily/weekly/semi-annual offering of deals, enabled through the elimination of physical overhead and presence of metrics to efficacy,  as well as their recent “loyalty method” of reward. Their well documented sales metrics on the result of these discounts this helps convince many publishers to enable people to get their hands on the game for a price that they’re actually willing to pay.  This serves to find a middle path, allowing developers to make a profit, consumers to enjoy a product at their specific price point.

What is the next step for the steam workshop/item creation process right now? Lowering the bar through tools. Crowd sourcing, both of in-game items and the game screening process allow people to determine what is valuable without imposing judgement of a third-party and it allows developers to grow a community, blurring the line between devs and modders.

It goes on like that for a while, but between vacations with limited internet, the Olympics, dog surgeries, exhaustion, and personal frustration – the important thing to note is that this is being done.  This is some high-grade George Bernard Shaw talking about apples type stuff going on.

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