system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How can online stores like Amazon or Steam afford to cut prices on their products during holidays so low and still profit?
gpt
In Steam's case it's the individual publishers/developers that put their game on sale.  Valve merely makes them aware of the stretch of time they're going to be promoting their holiday sale, but it's up to the individual publishers/developers to decide if they want to participate and, assuming they do, how much they want to reduce their game by.

The main reason you'll see significantly greater price reductions on Steam compared to big box stores is because there's no manufacturing costs.  They're not making a physical item to sell you and they're not shipping said item anywhere.  Given that it costs basically nothing for them to sell you a digital copy (aside from the obvious cost of making the game in the first place), they can still profit off of their title at those low prices.

Amazon is a bit of a different beast.  It has some advantages over big box stores in the sense that it doesn't have to pay as much upkeep and that's part of the reason they can sell items at a reduced price.  The bigger factor is Amazon's company philosophy though.  For Amazon, turning a profit has always been a secondary goal to capturing market share.  Basically they want to outsell places like Walmart even if it hurts them now because they think it will help them in the long run.