This time I wasn't talking about the xbone. I was talking about steam. In steam, sales exist because users can't sell their games.
No, Steam sales exist because Steam has serious competition with Origin, GOG, Gamefly (formerly Direct2Drive before the buyout), Humble Bundle, and others. They also exist because
the only cost of producing a digital copy of a game is the bandwidth. It is almost pure profit. You don't have to pay...
- licensing fees for the console
- console maker's cut
- Production costs
- Transportation costs
- You can't "steal" a digital game, so you're not losing the costs you put in to produce a physical copy.
Valve takes a small cut of the sales (I heard it was like 5-10 percent) and that's it.
Because the margin is so big for digital games, it is possible to drastically cut the price and still make a profit. You also don't have to worry about supply because all you need to do is make more keys, so it's possible to keep your classic games in your active catalog where they will make you money instead of sitting on a shelf somewhere.
But all of this hinges on fairly pricing the goods... which is something none of the console makers seem to understand.