The Implications of DLC

IndustryGamers took a moment to break down just how profitable DLC can be, while also reflecting on the negative impact it can have on conventional retail channels. They also include a chart to help back up their analysis, and summarize it as so:

As we can observe, what makes PDLC a lucrative product is not necessarily the volume it pushes, but rather the minimal expenses and time it takes to create PDLC. In fact, when you break down the monthly profits, PDLC provides a better return on investment than a physical title. (Noting that our model assume 1 month of full development, when in actuality, the entire development team is not needed to produce an expansion pack and can likely be done in 2 months at half the monthly costs. Nonetheless, the costs remain the same).

Now back to the problem at hand.

For most gamers, our discretionary time is fixed, meaning that on a weekly basis we have a set amount of time we can spend on leisure. Sure, we can adjust how that time is spent by watching less television, falling prey to (outside) activities, avoiding the Internet, or ignoring our families, but let’s face it, those adjustments are temporary those that are married can attest to the complains from our loved ones when we cram in a 12-hour Halo session.

It’s pretty obvious how lucrative DLC can be – Bethesda will have soon churned out five $10 addons for Fallout 3 in less than a year using a smaller development team than the original title needed. Even if only a small percentage of Fallout 3 owners buy the DLC, it’s a huge source of revenue for years to come and gives them the option to put a “Game of the Year” version on shelves for another round of $60 purchases.