The lowdown on DLC: Where's our downloadable content? Part Two

Team Fortress of Brand Loyalty

Unlike the example of GTA4 with its one-shot downloadable content, Valve seems to take the never-ending beta approach. Like Google, nothing Valve does ever seems to be final, and that certainly goes for Team Fortress. There's no real update schedule, just a series of changes and upgrades as Valve sees fit - whether it's new maps or new character abilities - and of course, it's all free.

For Valve it seems, downloadable content is a way to continually cultivate a community, and more importantly, a loyal community. By constantly providing rewarding content for the players of its games, Valve is building strong brand loyalty. As such, the expectations and excitement for the company's next release, Left 4 Dead, are high precisely because the community has come to expect a strong multiplayer component with DLC - and for it, the community will reward Valve with its purchasing dollars.

The Far Crying game

In a similar vein, Ubisoft also makes games that continually provide new experiences. Although in the case of Far Cry 2, it's the community itself who's making the DLC. With a robust map editor, gamers can continually invent new playing experiences for Far Cry 2 and share them online. So while the game might not come with the same polish as COD4, it does offer endless innovation - and like Valve - this cultivates some pretty strong game loyalty.

Souless Caliber

On the opposite end of the spectrum, Namco has managed to irk its community with its use of DLC. In the case of Soul Caliber 4, it was made pretty obvious from the beginning that all the downloadable content was already available on the disc. However, Namco had much of it locked, and chose to make gamers continually pay through microtransactions to access the content, such as getting Darth Vader or Yoda (if your version didn't have one of them). The result is some pretty negative press and word-of-mouth. Rather than cultivate the community by rewarding them for being loyal gamers, Namco intends on profiting off of their enthusiasm for the game - I think one strategy builds loyalty and the other eats at it until there's nothing left.

What does it, what does it all mean?

So what is the monetary value of downloadable content? If the above examples are a guide, DLC does offer some benefits:

-New content means continual interest

-DLC makes the cost-of-entry high for competitors

-DLC can be rewarding from an exclusivity-deal agreement perspective

-DLC can foster strong brand loyalty (and disloyalty if handled incorrectly)

From my perspective, DLC works best when it's used like social media ala Facebook or Myspace - that means it's gotta be free.

It works best when it's free because it adds value to the game that the gameplayer didn't initially expect. In marketing we call this an unexpected bonus. It's something that I would not expect or miss if it wasn't in my game, but it adds a bonus if it is present, like updates to Team Fortress 2, or adding zombies in Grand Theft Auto 4 or the ability to constantly create new maps with no added cost in Far Cry 2.

When you do try to charge for it or monetize it in some capacity, you change the dynamic of the relationship. As Chris Anderson pointed out in an epic Wired Article, how your market treats free things is vastly different than how it treats things that have been assigned a value ("zero is one market and any other price is another").

When there is some direct remuneration for my DLC, whether that's paying for it straight-up or getting it free on some condition (ads, future subscription etc.), it makes me evaluate what I'm giving up in return and whether it's worth the effort or the dollars. For everyone who was excited about new maps in COD 4, there were an equal number dissatisfied at a perceived over-valued cost.

When the DLC is free, it's the developer/publisher taking the first step in the relationship - they are saying, we want to talk to you and we walk to entertain you. While the content is free, the developer/publisher gets something valuable in return, they get the game players' continued interest (versus other games out right now) and they get the game players' brand loyalty for when new games come out.

Free means that the developer is interested in the player for more than just their money, they show a genuine interest in investing in the players' fun. Just ask Valve and the buzz for its next release whether this kind of positive reinforcement via free DLC has a definitive, demonstrative financial value.

Where do we go from here?

Who knows? Will consoles be completely digital in the future? Some rumours say yes.

If this is the case, how will DLC be addressed, let alone piracy.

If all consoles go digital - how does that change the relationship between game player and developer/publisher?

When the content no longer comes in a box that I have to go pick up at the store, will it change how much I value it?

And bigger still, will it change my perception of what it means to call something a full game versus DLC - when all of it essentially becomes downloadable content.

The lowdown on DLC: Where’s our downloadable content?

Part one

With Call of Duty 5: World at War on the horizon, the sun is slowly setting on Call of Duty 4. You wouldn’t know it though judging by its Xbox Live numbers. Call of Duty 4 continues to be successful, particularly on the Xbox where it still draws large crowds almost a year after it came out.

The funny thing is – the popularity of COD4 is surprising given the lack of support it got from Infinity Ward via Activision:

Three new maps and some minor playlist updates.

This lack of support got me thinking – what is the value of DLC or downloadable content?

And what does it mean either financially or competitively to developers and publishers, and of course ultimately, gamers?

Call of Duty like clockwork

In the case of COD4, there’s an obvious answer why there are no more maps or playlists, despite the game’s popularity: Call of Duty 5.

Since Activision sticks to a yearly release schedule, gamers aren’t likely to see a lot of post-release support for these games. Simply, Activision isn’t going to release downloadable content that’s going to cannibalize their new game, COD5, for their old game, COD4. The easy answer is that anyone who was going to buy COD4 new already has – and the publisher has no financial gain when people buy it used.

It’s in Activision’s best interest to motivate gamers to buy the next installment using new content as the carrot, and then eventually we’ll all move on again to COD6 for the same reason.

So this approach makes financial sense – what does that mean for a company like Bungie, who has released a variety of map packs for Halo 3?

Don’t stop the Halo

On the opposite end of the spectrum, Halo 3 has seen a number of new maps released. While Bungie doesn’t have to worry about cannibalizing its own games, it does beg the question: what’s the value in releasing downloadable content or DLC for a game that’s been out for months. The chances of new purchases significantly drop after the first couple of months, and likely, many of the new players bought the game when it was used.

However, I do think there’s one reason for Bungie to keep releasing maps and that’s called entry to market. By continually to make new content, Bungie keeps its fanbase satisfied and makes it that much harder for other developers to lure this giant subset of gamers away to their game. It gives Bungie a competitive edge while they set to work on their next release. The more people still playing Halo 3 come Halo 4 time (or whatever they’re making), the easier it is for Bungie, and big daddy Microsoft, to make a sale.

Grand Theft Autopilot

So Bungie has its reasons for publishing DLC months after Halo 3’s release, but how about something like Grand Theft Auto 4? When it was first released, there were a myriad of promises of DLC. Now, it looks as though downloadable content won’t be coming until the new year – that makes it almost six months after it shipped to retail. Is there any value here?

Perhaps from the perspective that it means people will hold onto the games, but how does that work financially? The chances that many of the copies of GTA4 that were purchased used is quite high, and from a return on investment perspective, Take Two gets nothing back for delivering DLC to these buyers.

I would make the argument that GTA4 is the example of a company releasing downloadable content as part of an exclusivity agreement; Take Two will receive money back for the DLC, but it’s likely a part of a deal with Microsoft rather than the direct benefit of moving more units. As for Microsoft, at this point, the only benefit of the exclusive DLC is another bullet point on a marketing sales sheet.

Part two coming next week...

Wii Music Struggles to Sell

As I suggested in my previous post, Wii Music is competing in a market where casual gamers already feel that Rock Band and Guitar Hero are casual enough.

As this recent news post from Wired suggests, Wii Music is struggling to make the same kind of sales that came with Wii Sports or Wii Fit.

Perhaps it's just a minor miscalculation by Nintendo in terms of finding the right audience, or perhaps, Wii Music's struggles are a sign of bigger trends to come. I'll always applaud Nintendo for attempting to break out of the mold, but even so, I think there's danger in relying solely on a casual audience - sure it's a big market of people, but it's a fickle market too.