Let’s say you’re Valve. Hello Valve. I notice you’ve started your Winter Steam Sale again. That’s awesome, but I’ve noticed you’re doing something different this year. In the past you’ve metered out the sale prices in the form of daily deals and “Flash Sales” that rotated every eight hours or so. We had to come back to the site constantly to see what was on sale.
This year, though, you just sort of put everything on sale at once:
A little further down the homepage it says that there’s “4,076 titles on sale across Steam.” That’s… a lot of options to consider.1
Why the change? There are actually many reasons why the rotating sales worked well, plus the entirety of Chapter 9 in my book deals with digital sales expands on the topic. But here’s another reason why I think this year’s “put it ALL on sale NOW” strategy is a bad idea: sometimes too many options can be demotivating.
Too many choices can, in fact, lead to making no choice.
Someone assuming that all shoppers are completely rational and have no boundaries around their mental abilities would also assume that more choices are probably better than fewer. Maybe it’s that way in Vulcan supermarkets and Spock would have no trouble choosing between three hundred options for canned corn or indie platforming games. But that’s not how humans work. Back in 2000 Sheena Iyengar and Mark Lepper published a series of studies where they tested the assumption that having more choices is always better.2
In their first experiment, they set up a booth at an upscale supermarket where they invited shoppers to sample different kinds of Wilkin & Sons jams. Some shoppers were presented with a choice of 6 different jams while others had 24 different flavors to choose from.3 They then measured how many people from each group ended up buying a jar of jam. It stands to reason that those who had more choices would be more likely to find something they really liked and buy it, right? Here’s what the researchers found:
- Of those with 6 options, 31% bought something
- Of those with 24 options, 3% bought something
Huh. Next, the researchers offered a bunch of college students the opportunity to write an essay for extra credit in a psychology class. The essay was optional, so nobody was required to do it, but if they did they had to choose from pre-approved topics. Half the students were given a list of 6 essay topics to choose from while the others were given a long list of 30 choices. Here’s what they found:
- Of those with 6 options, 74% did the extra credit assignment
- Of those with 30 options, 60% did it
Not as big a difference with the grocery shoppers, but still a lot. The researchers also found that people faced with lots of choices report being happier about the situation than do those with only a few. But those same people also said that they found the experience more difficult and more frustrating.
Given that, why did those with 4 to 5 times as many choices decide so often to not exercise ANY of them? Because when faced with an overwhelming number of choices, we quickly lose our ability to compare them all at once and so we look for choice strategies that make comparisons easy. We jettison choices that are dissimilar to others. We focus on just a few limited characteristics. We overweigh characteristics that are easy to quantify and understand. We stop perusing as soon as we find one options that meets some minimum threshold. But even those strategies can be difficult, so a lot of the time we just go with the status quo: we walk away without making any choice because that’s the easiest way out of a frustrating and mentally taxing situation.
This is why, among other reasons, it’s better for Valve to offer (or at least promote) daily deals with a relatively limited list of titles. If they just put up a big list of 4,000 games, we’d be less likely to buy something because it would overwhelm our normal choice strategies.4 Too much choice is demotivating.
Thanks for your insight Jamie! Fascinating as always.
While I agree with you wholeheartedly about the “Analysis Paralysis” that having everyone on sale at once causes, I think this Valve’s hand was effectively forced for this Winter Sale through the changes to their refund policy.
Now that customers have the ability to obtain a full refund for any game played “Under X Hours” it was possible to buy a game you were interested in and then monitor the site for a flash sale, at which point you could return it and re-buy it at the lower price.
I’m guessing that Valve though that the frustration associated with this constant-checking-to-get-the-best-deal behaviour was potentially more damaging to sales than having everything at the sale price up front.
The choice research can’t be denied though… I wonder if there is a way to limit choice while still assuring customers they are getting the best value-for-money deal.
Perhaps something like a lowest price guarantee?
That’s an interesting theory and I could see there being some truth to it. I wonder how many people would return a game just to save a few cents or a buck. Seems like they could also solve it by making sure that flash sales or daily sales are always the lowest price they will be.
I agree with the issue of analysis paralysis in regards to the idea of putting everything on sale at the same time. During this sale and the thanksgiving sale I found myself doing the exact same thing: Loading up steamdb.info and looking at my wishlist items, and then all items sorted by either discount % or rating %. Both times I didn’t come up with much to buy (to be fair I own 400+ games in steam), and not only was disappointed, but also had no reason to check again after day 1. I tried out the discovery queue a few times (mostly for the trading card incentive which I gave up on, remembering the “grind” of xmas past), but I’ve already done the queue so many times I usually find it worthless.
I think there’s some possible validity to the refund theory, as well as the idea that they may have in theory lost sales due to potential purchasers waiting until the encore at the end to see if games got a better discount later. I think the variability of the discount on a single game was the only real flaw and as Jamie already pointed out, just make the discount binary, either its on sale for X% or its not and make some adjustments to the refund policy so that if you refund a game you can’t repurchase that game on that account. Sure you could work around this with another account, but the amount of work it would take to manage two accounts just for that wouldn’t be worth it to most people for a discount.
Dropping the changing sales was definitely a mistake imo. Not only did the changing sales drive me back to the site EVERY SINGLE DAY of the sale. The constant return to the store made me feel that much more compelled to make an actual purchase. It’s like I had to eventually buy some things just to feel like I wasn’t wasting my time going there every day, a subtle self-justification. Of course I also felt the constant gambling high of not knowing what could be on sale and how much of a sale and that high can also increase the chances I make an impulse purchase.
Woot was the perfect example of using this sales technique and I checked woot at 10pm every night for literally years, despite only buying maybe a handful of things from the site. It conditioned me so that even after I stopped checking woot (Amazon ran it into the ground), I still felt a slight rush whenever I saw it was 10pm (the site updated at midnight central time with the new deal and i’m on pacific).
Theories aside, I imagine Valve at least gathered enough data between the two holidays to make an informed decision next year, so I look forward to seeing the results and I hope they discuss them publicly.
Wouldn’t the lowest price guarantee effectively be an automated version of the issue you noted with people buying the game and then waiting for a sale for a cheaper price? It’s an interesting issue, I’m not really sure which side of the decision would be in the best interest of steam. Perhaps if people were prevented from re-purchasing a game within like 48 hours of returning it
Valve started doing this back with the Autumn sale, and as Sam guessed they stated the reason for doing so to not limit consumers and give them access to sales for a longer period (quite nice over the Christmas period where you may be away from your internet and only hear about a sale too late).
Choice/Analysis paralysis may be an issue. But they are doing a couple of things to try to prevent this. First, they are doing what you suggest in promoting daily deals. They highlight new deals everyday (both at the top of the page and the bottom, and via the promotion pop up you see when first opening Steam).
In addition they are incentivising the use of your discovery queue, which presents you with another 12 games (all on sale, each presented one by one, again minmising too much choice) that are (in theory) customised for your interest. During the Winter sale you can earn one Winter sale trading card (also earns via purchases as in previous years) per discovery queue you go through (up to three cards per day). So the incentive is to come back each day and go through your queues.
Given that discovery is a problem with online stores, incentivising and getting people used to using the discovery queue seems a worthwhile move. It will be interesting if they keep it up in future sales or not.
I hear you and I see what you’re saying about the promoted daily deals. But as soon as I understood that “everything was on sale, we’re just going to push a few different things above the fold each day” I lost my motivation to check the site throughout the sale. I also just started looking through my wish list and all the games on sale looking for something to buy, but was quickly overwhelmed with all the options. Somehow, coming back each day to see “Should I get any of TODAY’S games?” made me buy more. Because it was like a new sale event every day.
The discover queue thing is interesting, but like most recommendation engines it doesn’t work well. It shows me stuff I played on console, for example. And stuff that is of the same genre, but from developers I don’t trust. I see it as Valve doing a huge data gathering exercise so they can make the recommendations work better, but I’m skeptical.
Interesting. Personally, I would bet that many consumers have only noticed that the flash sales are gone but not that sales don’t change day by day ( in past sales everything was always on sale too, it is just that the featured ones had higher discounts for a day – but otherwise they were still discounted on other days. Just not as much). You have to scroll past two/three folds to even see the comparatively small box that promotes the “10103 tiles on sale across Steam” (which was also there in the past, because everything used to be on sale all the time too, just it fluctuated more day by day).
From an usability perspective the interface is not pushing this large number at you. Rather they still are highlighting a relatively small number of deals per day. I see what you are saying, but the way the interface is structured is still aiming to present the information in easily digestible chunks. It is because you went browsing through the whole library you were presented with too many choices (a problem outside of the sale too! And one that the discovery queue is supposed to try to prevent in presenting small numbers of games to you one by one).
Personally, it took me several days to work out that the promoted sales weren’t special daily deals, and that was only because I forgot to make a purchase one day, thought I had missed out, and then was pleasantly surprised to find it still just as discounted. Which caused me to investigate further. Also, the discovery queue incentives have been having me doing my three queues every day and, while I agree it can be poor at times, the more you use it the more relevant its recommendations become. This has meant I have now brought and been exposed to more games than I would have been under the old system. But N = 1 of course 🙂
From a consumer standpoint I think this new approach is better than the old one. It will catch and benefit both hardcore steam checkers and casual users who might only check once during the whole sale period. It will help people using the sale to buy gifts, as they can hear from a friend or family member that they want something and it will still be on sale. It gets rid of the Flash sale where only the game with the lowest discount was selected anyway. It may also help spread sales more evenly across the sale period (in that the “smart thing to do” in previous sales was always to wait for the whole length of the sale to see if you could catch it as a daily deal or flash sale, and then buy at the end). Or at least means that on the last day of the sale people can just scroll through their wishlists and still benefit from the sales. It also means if people get money at a certain point in the sale (say after Xmas) they still have all the deals available to them. Plus, finally if the incentive to check the discovery queue generalises to after the sale (which it may not, but may for some) it gets more people using this system.
You are right though that Valve will certainly be data gathering. That is one of the good things about them. They will have data on how well the new approach in the Autumn and Winter sale has worked compared to past sales. It will be interesting to see if the flash sales and special daily deals return, or if they stay gone 🙂
All good points, yeah.
For me, I noticed something was up right away because there were no countdown timers or flash sales. It then just took a couple minutes of investigation to find out what’s up. But I am a) a Steam power user, b) someone purposely investigating the system to see if there was anything I should be writing about this time around. I think it’s an up in the air question whether the daily promotions and/or the discover queues act as an adequate substitute for the daily deals in terms of offering shoppers a heuristic for focusing their attention and possibility space. It’s like “Here, there are 36 jams on sale, but this shelf has today’s 6 featured jams. What do you do?”
I’m sure Valve can (or will) answer that question with real data.
As a side note, the trading card stuff has become meaningless to me. I was into it previously, but just don’t care any more. I’m sure there are many, many people who are though.
I thought the jam study was debunked? My understanding was that the results could not be replicated and that, in looking back at the original study, there were some flaws in methodology as well as a small sample size. I actually feel like their basic thesis is true, but if the actual study is not good, perhaps best not to use it anymore. (Apologies if I’m getting some details wrong here.)
I hadn’t heard that. I’m looking at the jam study now and there were 260 people in that experiment so it’s not a small sample. For the extra credit assignment experiment, N = 197, which is not small either. There’s also a lot of other research done in this topic, much of which is included in the book The Paradox of Choice by Barry Schwartz.
Looks like this might be what Soren was talking about: http://scheibehenne.com/ScheibehenneGreifenederTodd2010.pdf
I appears that there have been quite a lot of problems replicating this effect and quite a few small effect sizes. Looks like there is enough controversy and criticism around this effect that Barry Schwartz wrote a post http://www.pbs.org/newshour/making-sense/is-the-famous-paradox-of-choic/ about it and even admitted he went too far when originally writing about it:
“It is no doubt true that scientists sometimes seek popular audiences prematurely — before their claims have been adequately tested by peers. I, myself, may have been guilty of this when I wrote “The Paradox of Choice” a decade ago.” (from http://www.pbs.org/newshour/making-sense/is-the-famous-paradox-of-choic/)
An interesting read and always good to see scientists admitting they may not have been right.
I think the switch in sales strategy might have another factor no-one has really mentioned yet: developers.
Right now I see over 10,000 games on sale. With small independent developers often relying on steam sales for the bulk of their revenue, flash sales are essentially like winning the lottery. Games that get put in flash sales get a prominent spot on the page, and suddenly fall under the category of impulse purchases, to boot. With ten thousand games on sale, it’s easy to see how such a system could feel unfair to developers and foster bitterness should they not be chosen.
To my mind, it seems like this is a way to address that randomness; allow developers to feel like they’re on a more level playing field; and move promotion even further out of valve’s hands—something they’ve been trying to do for a while with curators and the discovery queue—and into the hands of the devs themselves, this time.
Yeah I agree with Jonathan. I think that is for sure one of the reasons Valve is trying this out.
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Probably the main issue (as mentioned) was to do with Steam Refunds now being available.
Steam is hit pretty heavy over Christmas already due to everyone logging in and buying games at once, imagine how it would be if they had to process thousands of refunds all at the same time too. May also piss off developers if the refund had to be processed through them too, money going back and forth all-over the place way more than normal.
I think they didn’t do too bad this time, since they did sorta do the daily deal thing by promoting a different set of games each day. I did however definitely check steam a LOT less though over the holidays. I’d normally be checking EVERY day for fear of missing something.
As someone mentioned to get around the refund problem, some kind of price guarantee deal would probably be the best compromise, where if a game you’d bought during THAT sale was suddenly put up for cheaper, the difference is automatically refunded to your Steam wallet. (Yay for them, since that incentivises you to then spend it on another game from their store heh, they could event show you a set of games immediately after the refund notification to prompt that). Would cut down on redundant transactions at least.
Looks like I was totally wrong:
http://www.gamesindustry.biz/articles/2016-01-12-new-approach-from-valve-pays-dividends-in-winter-sale
Their new approach seems to have generated way more sales and engagement with other systems like wishlists and reviews. Too bad. I liked the sales and don’t care about the discovery queues.
I find it kind of odd though that they are spinning wishlisting as a positive. Wishlisting generally implies that someone would have purchased something, but it wasn’t discounted enough. If anything, record wishlisting kind of says that lots of people didn’t want to buy games from this sale. I also wishlist lots of items from my discovery queue and then don’t buy them until they are ridiculously discounted. When I wishlist something its because I don’t have enough emotional desire for the product to make a purchase at any reasonable price, and probably won’t until its like 90% off.
It’s good that the increased usage of the discovery queue that did lead to some niche product purchases, as this means they are doing something positive about the “indiepocalypse” discovery issue. The question I have though, is did this sale lead to a higher overall number of purchases, and how did it relate to purchases that they normally would have incorporated into their flash sales?
I do think that they did accomplish the whole “I might as well buy it now because it won’t get any more discounted during this” mission, but for people who don’t really care about trading cards like myself, it severely decreased my engagement with the winter sale.
I can see why they are happy. I would bet there is a pretty strong correlation between a product going on a wishlist and it eventually being brought. I would also bet that games that go on wishlists are brought significantly more often than games that don’t. Even if it is just by people like you who wait until it is 90% off and then buy it, that is still a reminder to buy that likely means you purchase at some point rather than the game never being sold to you (any sale is a sal). But there must be a significant number of people for whom the Wishlist is also a place to remember items for when they have the budget at a later date or for people like me who like to browse friend’s wishlists and buy them stuff (especially during sales).
I added a lot to my wishlist during the sale, and then purchased quite a few on the last day (in addition to purchasing during the sale). The others I left because I had already brought enough, but they are now there and I will be reminded of them (or perhaps a friend will buy one for me at some point).
In terms of if the sale lead to an higher overall number of purchases, the link Jamie mentions says it did with these two sentences:
“…revenues themselves were also up more than usual, particularly for those games which fall outside of the service’s best performers.”
So overall revenue went up and they do give some specifics for the games outside of the top 500 as you mentioned
“we also saw 45 per cent growth in the revenue generated by this group of games as compared with the last winter sale.”
That growth is really cool, because there is a big discovery problem for games on digital stores.
More can also be seen by looking at Steam Spy data https://medium.com/steam-spy/about-steam-winter-sale-76a75abe152a#.xicf0svpz where it s clear revenue was about 50% more than the Summer Sale (which had flash sales). It isn’t a comparison with a Winter Sale though, which would be better (as apparently Winter Sales tend to do better than Summer ones anyway). But at least it shows that there was still a lot of purchasing (and playing!) going on.
As a casual steam user (two kids, computer has not been upgraded in 6 years), I bought several items off my wish list. The lower pressure was nice, especially since my machine is too out of date for AAA games.
I agree with you here – I found this article while googling “The steam winter sale is too long”.
This year it started something like 12/22, and it is STILL going (until tomorrow). It’s ridiculous. The length + the amount of stuff available make it entirely too overwhelming, I just don’t care. I bought a few things and that’s it.