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- Valve’s Gabe Newell once spoke about a series of pricing experiments on Steam, and stated that a price reduction of 75 percent should mean gross revenue remains constant, based on their prior experience. “Instead what we saw was our gross revenue increased by a factor of 40,” he said. “Not 40 percent, but a factor of 40. Which is completely not predicted by our previous experience with silent price variation.”
I am such a huge fan of Valve, not just the service, but the way they structure their business to experiment with services, prices and internal structure. Some day an economist will realize that they Valve has one of the best data sets on supply and demand for digital goods and will become famous for the paper they publish.