Mind Games

Examining the intersection of psychology and digital entertainment

Scarcity and the Steam Summer Sale

How creating artificial scarcity moves more digital goods.

It's summer! I know this not because of the record temperatures or the fact that my local elementary school will no longer accept my kid if I try to drop her off there. No, I know that the season is official because the Steam Summer Sale began this week and the Internet is alive with the sound of gamers squeeing with joy and asking if Ghost Recon Advanced Warfighter 2 is worth two and a half bucks.

For those of you who don't know, Steam (http://www.steampowered.com) is an online store that lets you buy digital copies of video games for your computer. The curators of this store have made a habit of putting on a big sale twice a year, and I always find it interesting to examine the psychology on display in their marketing tactics. I could write half a dozen articles on topic, but in particular I was interested to see how this year Steam is doubling down on what psychologists call the scarcity effect.

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When something is scarce, it automatically becomes more desirable to us than it would be if it were available everywhere we looked. This “available in limited number” trick shows up everywhere from collectible trading cards to special “limited” editions of new game releases. Ever noticed a storefront that had a “going out of business!” sign in the window for months on end? That’s the owners trying to capitalize on the scarcity effect. Buy now, sucker, or it’ll be gone!

Consider a simple 1975 experiment by psychologist Stephen Worchel to provide an illustration of this concept involving baked goods. Posing as a consumer products survey, the experimenters offered each subject a chocolate chip cookie from one of two jars. One of the jars had many cookies in it. The other had only a few. Of course, people reported the cookies from the mostly empty jars as more delicious, more desirable, and more expensive. This despite that the cookies in both jars WERE THE SAME COOKIES.

But Steam and similar download services sell digital games, right? They’re not cookies that are about to disappear, there is literally an UNLIMITED SUPPLY of the 1s and 0s that comprise these digitally distributed games. True, but the scarcity effect still applies, because it’s not so much the scarcity of the physical product that we react to, but the opportunity to buy it.

The Steam Summer Sale invokes the scarcity effect by being a limited time event that only runs July 12 through July 22. On top of that, many of the items on sale change every day, so if you see a game you want, you'd better act now. But on top of THAT, Steam is TRIPLING down by offering "Flash Sales" that only stick around for a paltry 8 hours or less with the text "Short Deals. Get 'em while they last!" Then it really turn the screws by posting a countdown timer next to each deal.

It's a very well established fact that humans hate losing choices once we perceive having them. Any other day you might not buy Super Street Fighter IV even for ten bucks, but threaten to raise the price on you in six more hours and suddenly people are considering it for a lot more because we're simply averse to losing the chance to get it for cheap.

So, well played Steam, well played. Now shut up and take my money. And I'll be back in 8 hours.

 

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References

 Worchel, S., Lee, J., & Adewole, A. (1975). Effects of supply and demand on rating of object value. Journal of Personality and Social Psychology, 32, 906-914.

Jamie Madigan, Ph.D. is an industrial-organizational psychologist, writer, and life-long video game enthusiast.

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