DLC and the Future of Boxed Games

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Right now, new games typically go for $60 at release, with additional downloadable content available throughout the game's lifespan costing anywhere from 99 cents to $20. Purchasing a game at launch and then picking up all the DLC as it's released can get pretty expensive over time. This leads many consumers to accuse publishers of "nickel and diming" them, or at least being too lazy to finish a game before putting it on shelves.

Brian Farrell, CEO of publisher THQ, doesn't see DLC that way -- he sees DLC as the future. Back in early November, he announced to the BMO Capital Markets conference in New York that the company plans to experiment with an alternative pricing model. Beginning with the new MX vs. ATV title, he said, THQ will try releasing games at a lower initial price point and then providing DLC after launch at steady intervals.

"It's clear that how people want to consume and pay for media, especially games, is changing," Farrell tells GamePro. "And in some cases, the $59.99 price point may be a barrier to entry."

It's a fair point. Who hasn't balked at the idea of paying $60 for a brand new game and promised themselves that they'll buy it when the price drops? But there are additional considerations these days, too; like, if a game includes multiplayer, will there still be an active online community by the time the price drops? For games without "Halo" or "Call of Duty" in the title, that's a valid concern.

To Farrell, it's not just about getting that initial install base in place, though. He believes it's about offering players some degree of choice and empowering them to choose the content they want to engage with.

"We know that how people are playing games and the way games are delivered are changing," he says. "So this is a way to deliver a customizable experience for the player in a brand new pricing model. It's all about what the gamer wants and how THQ can deliver a great gaming experience that suits each individual player through a highly modular content set."

Games like MX vs. ATV are an ideal fit for this kind of pricing model. The game structure is based around different modes and classes of vehicle, and so it is simple enough to add additional content to particular sections or modes, or even to create new parts of the game. Both player and publisher win in this instance: the publisher can develop a larger install base with the lower initial price point, while the player can "build" the game they want over time by picking which DLC suits their play style.

Buying DLC piecemeal, however, makes it hard to keep track of how much your game really "costs," particularly if there's a lot of it available. How much will it actually cost to get the "full" experience? Farrell's answer doesn't quite satisfy us.

"To be clear," he says, "the $39.99 price point does not mean that the boxed product will be a less than robust game. MX vs. ATV Alive will be an engaging, satisfying experience for any gamer and the best title in the franchise to date. Additionally, the total content to be offered well surpasses what would have been included in a $59.99 game."

Note that "total content offered" is not "content you have a right to being that you bought the boxed product." Sure, the total amount of DLC available for the new game may well be considerably more than what a developer can squeeze onto a disc, but how much will each piece cost? How much of the game will be included on the disc at launch? The questions build to the point where we ask ourselves if we even want DLC if it's just going to mean we're not getting a complete game with a $39.99 purchase.

Some developers have a solution for getting a "complete" experience without shelling out for DLC in the form of "Ultimate Edition" releases. These games are typically bundles of the base game and all its DLC, plus patches. The only problem with these editions is how long you have to wait for them to come out -- sometimes you have to wait as long as a year (e.g. Mass Effect 2 for PS3).

"Some of [Alive's] DLC will be offered free, some will be charged for," continues Farrell. "We believe this model serves gamers in two critical ways: it allows us to deliver the boxed product to fans of the franchise earlier than in previous cycles, and it allows for tailored gaming experiences through 'a la carte' additional content. This means a lower initial cost and better value for gamers thanks to a more responsive business model."

Farrell promises that the retail version of the game will offer a "robust" experience for fans of the series. But he doesn't say what constitutes a "robust" product. We're not sure if his promised DLC falls into map pack territory (which actually adds new gameplay to the game) versus purely cosmetic content (which is largely useless from a gameplay perspective, however nice it looks) -- and how much each type of content will cost.

Farrell does say that the $39.99 price point for the initial product will attract the "mass-market" audience, while the DLC is reserved for the more "hardcore" crowd who wish to, as he puts it, "customize a bigger gaming experience." More than anything, this is an exploration of alternative ways of distributing and selling content. Farrell is very curious about ways to keep players engaged, interested and, by extension, spending money with them.

"The industry is adopting new models that can't be offered at traditional brick-and-mortar retailers," he says. "You can see it on Steam and Direct2Drive, you can see it in browser-based social games, you can see it in the microtransactions or embedded economies in persistent universes. We're [also] watching new ideas like Dead Rising: Case Zero closely."

Those "brick-and-mortar" retailers aren't going to go down without a DLC fight, whatever Farrell says. Just this year, GameStop started selling DLC in its stores for both Sony and Microsoft consoles. Far from admitting defeat at the hands of digital distribution, GameStop's efforts look to us like a smart move; the company can tap into a market of gamer that can't easily access DLC and cash in on non-gamer consumers that want to buy their loved ones DLC as a gift.

Dan Connors, CEO of Telltale Games -- a company that made its mark on the industry via episodic, downloadable games -- doesn't believe that retail is going away any time soon.

"The retail channel is still very powerful," says Connors, "and [through it] you can increase the initial size of your installed base. Of course, the challenge will be converting those initial purchasers into ongoing customers over time."

Connors agrees with Farrell's position on "hooking" gamers with a lower price point and then rolling out DLC over time for as long as it sells, but he cautions that the model may not wind up being the future of games and DLC.

"There is still a lot of testing the water to figure out how the business model should work and what level of investment should go towards DLC versus the initial product," Connors says. "There seems to be two camps: one where DLC drives ongoing sales of the initial product, and one where DLC generates revenue on new content. I think in the case of AAA titles the initial investment is very large, and the DLC investment is incremental. As long as that's the case, the focus will be on generating sales of the boxed product."

Connors is also keen to note that the development of different pricing strata within the industry is, he believes, "critical."

"I think everyone would agree that the AAA retail model does not allow for a lot of creative risk-taking," notes Connors. "If we want a wider audience of gamers in this world, there has to be a variety of content available, some of which works better in smaller chunks."

We trust Telltale on this. Its games come in smaller chunks which add up roughly to the length (and price) of a full retail game when stuck together and sold as a "season." For its model to work, though, the games have to be designed with "episodes" in mind. Sure, it works for Sam & Max -- but what about Darksiders? You can't just take the story in that game and chop it into chunks because players will feel frustrated that their story just "stops" at the end of each chunk. At the same time, developers planning an episodic game have to think like television writers more than game developers; they can't drag out stories indefinitely and they have to pay close attention to pacing and spoilers in case a player wants to download episodes 1 and 4 but not 2 and 3.

The proposed business model for MX vs. ATV Alive will be an interesting experiment. Whether or not it succeeds will inform THQ's future decisions on how to market and distribute content in the future -- particularly in genres such as sports or driving games, which are easily extended through DLC.

Interesting as it is, though, isn't it sometimes nice to pick up a game, safe in the knowledge that you will never be expected to spend any additional money on it beyond your initial outlay? That used to be the norm, rather than the exception.

This story, "DLC and the Future of Boxed Games" was originally published by GamePro.

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