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...