How does a company make money from steep discount?

Question

E.g. I just bought a game 85% off on Steam (for a discounted series and I own all the previous titles). Assuming the publisher makes no profit from this sale, how do they make future revenue from me?

In: Economics

Answer 1

Steam doesn’t take a flat rate of the sale. Steam takes a 1/3 cut of the sale. So the publisher makes money even on a 85% discount.

The logic is that the discount is going to 1.) entice the people who won’t buy the game for a higher price. 2.) make the price competitive with other games during a seasonal sale.

So the publisher is still earning money and is potentially reaching different demographics of players when they lower their price.