Valve’s Gabe Newell gave the keynote address at this year’s Design, Innovate, Communicate, Entertain (DICE) Summit about the cost of games, the effect of piracy, and how to reach new players. Valve undertook an experiment recently to test how price affected the sales of their popular survival-horror FPS, Left 4 Dead. They Reduced the price by 50% on Steam, which “resulted in a 3000% increase in sales of the game, posting overall sales that beat the title’s original launch performance.” They also tested various other price drops over the holidays, seeing spikes in sales that corresponded well to the size of the discount. This will undoubtedly add to the speculation that game prices have risen too high for the current economic climate. G4TV ran a live blog of Newell’s presentation, providing a few more details.

[Via Slashdot]

Obviously dropping the price dramatically on a new game will make it seem like an overwhelming value compared to other games on the market still priced normally, chances are the “happy medium” for publishers to maximize profit is below the current market pricing but above the low point tested by Valve.  How does this factor in with Collector’s Edition games though? Do you think a new game priced at 30 out of the gate would still be worth an extra 10-20 on top of that, or should the extra price for the CE shrink accordingly as well?

It’s a good read for anyone looking to help justify the extra cost of the CE games in their collection.