What an interesting topic. One thing I notice is that many people are applying intrinsic value to the DLC, i.e. if the main game costs X and I get Y amount of gameplay, then a DLC that costs a X% I should get Y% of gameplay. The entertainment industry doesn’t work that way. The only intrinsic value in a product is what I can get for the disc and packaging at a recycling plant.
The value in the entertainment industry comes from subjective value. Consider home video as an example. You can pay $14.99 for a single disc edition, or $19.99 for the two disc edition with all of the VAM (value added material). The DLC is value added; the subjective value is $5 in this case. You don’t need the DLC to play the game, but it adds value to the game, either in the form of new items, additional storylines, etc. But instead of paying for the extra content up-front, you are paying for it as is becomes available.
The whole thing about games keeping up with inflation and increasing in price is another inaccurate argument. Consider consumer electronics, DVD’s, etc. As the format matures, and associated cost of production drops, so does the retail price. It reaches a sell thru price point, at which point it can go no lower, or else it becomes unprofitable to produce, and can’t go higher because the consumer market won’t pay that price. Look at BLU-RAY discs and players. When they came out, they were around $40 and the players were in the $1000 range. This was above the price point for the perceived value. In the past year both of them have dropped significantly. For SD DVD, the market has stabilized at around $20 per disc and the BD market has stabilized at around $29 per disc.
I am hazarding a guess that the profit margin in the gaming industry has shrunk significantly, which is why you are seeing many more mergers, acquisitions, and re-alignments than in the past, a more motion picture mentality of less marginally profitable products and a greater focus on the tent pole blockbusters, and a greater focus on owning the IP of a game. But aside from the CEO’s cell phone number, profit margins are the most closely guarded secret in any industry.
The DLC is most likely a low cost low yield (or do I dare say a loss-lead) item, to keep community interest that will add value to re-releasing the product as a GotY or special edition with all expansions for roughly the same price as, or at a slight discount from, the original price. It also serves as a soft sell marketing tool to keep community interest for the next installment, whether that is an expansion, or a sequel.
While there is a licensing fee to console makers across platforms, and I would suspect a lesser fee for an “exclusive” period (which is why you see a single console edition for the first 6 months to a year), it would probably be built into the pricing model.
Another thing to consider with pricing is that it is the MSRP. The publisher probably gets a per unit wholesale price from distributors, who in turn apply their mark-up. That’s why prices at GS versus Wal-Mart for the same product will generally have a 2-5 dollar difference, and is also why places like Steam can offer super saving sales.
The developer, if in-house probably gets a budget that has no relation to ultimate sales and the corporate bottom line, while the contract publisher either gets a fixed fee or T&M + x% in fee.
I have certainly digressed. The bottom line is: Is the DLC worth $5 to you or not? If so, buy it, if not, don’t.
Modifié par TheKnave69, 10 février 2010 - 02:40 .
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