How Much Should DLC Cost?

Written by Cliff Harris

May 24, 2010 | 11:14

Tags: #cliff-harris #dlc #expansion #gsb #industry #price #space-battles

Companies: #positech #valve

Free to Play

This may sound like a simple question, but what should you charge for DLC? Enough to make a profit, because you’ve worked hard on it? Enough to just cover costs, because it’s usually not something all that big and complex? Or should you give it away for less than cost, to reward players and get publicity? It’s a difficult question.

Let’s not forget that PC games have a history of free post-sales patches and content either – I've released a whopping 38 patches for GSB, for example. I do that because I know that model can work, because despite not earning a penny from existing buyers, the incrementally better core game will benefit from the patches and therefore generate more sales in future.

Personally, my own policy is to break even on DLC and hope it’s made worthwhile in the long run by boosting the appeal and prominence of the core game, where the real profit is made. On the other hand, Valve is famous for releasing free extra content for its games. They obviously figure it boosts their core game sales, plus probably adds to their reputation. Sadly, not every PC developer has the scale needed to pull that off, nor millions of eyeballs drawn to their games every day through the ownership of steam. In other words, Valve is the exception that proves the rule.

Recently, Blizzard released DLC for World of Warcraft in the form of the Celestial Steed mount, priced at $25 USD. Some estimates put revenue for this single item at $3.5 million USD which, looked at in terms of return-on-investment, is a staggeringly good return for the developer. Activision Blizzard’s shareholder’s are probably ordering more gold-plated Ferraris as we speak. More interesting than the price itself though is the fact that the outrage was thin on the ground when compared to Bethesda's Horse Armour - maybe because WoW attracts a different kind of player or because they are more invested in the experience.

How Much Should DLC Cost? Free to Play
An increasing number of games are financed only by micro-transactions

One of the common arguments against DLC is that the offered content 'should be part of the main game anyway'. This argument probably rings more hollow to developers than most. Game designers do their best to develop coherent, full featured games given the development budget and time. With the extra income from expansions and DLC, more content can be added at a later date, but that no more means it should have shipped with the core game than it does that Jar-Jar Binks should have been in the Original Trilogy. More income equals more opportunity for content and features - without that extra income there's a chance that these features would not be included.

While DLC pricing provokes a ton of debate the reality is that it’s only a tiny slice of the whole game-pricing pie – there’s an increasing number of MMOs that are financed solely by micro-transactions, as well as publishers for pushing for really big releases like Call of Duty to have increased prices, for example. Neither idea is really all that popular, but to dismiss them out of hand is to miss the point – PC gaming is huge, diverse and appeals to almost everyone, so why should we expect a single pricing model to appeal to everyone?

The arguments about micro-transactions being evil or free-to-play being the future or premium pricing being wrong are pointless ideological battles. PC games are no longer a fixed simple commodity that belongs with a set pricing model and customers are able to decide for themselves how much they want to pay. If someone wants to spend £100 a month on Farmville items, so what? Arguing against that is like railing against someone who has a fixed-rate phone contract because you prefer pay-as-you-go.

In fact, I suspect there are plenty more price-experiments and business models to come. Doubtless you have seen the Humble Indie Bundle, the latest in 'pay what you want' schemes that raised over a million dollars for the developers and for charity. Personally, I'm sceptical about that model, but if it works for them then I’m fine with that.

How Much Should DLC Cost? Free to Play
Cliff is currently working on an expansion to Gratuitous Space Battles

Even that’s just scratching the surface though. There are lots more options out there for those that want to look around – like buying one copy and getting one free, ala Frozen Synapse, or getting a big discount if you pre-order a game without playing it, which worked well for Mount and Blade. Some very brave developers even go the Donationware route, giving the game away free and just asking for your kindness.

Did you ever notice that it's mostly indie games doing this sort of thing too? That’s no surprise. If an independent developer has a cool idea for how to sell their game then they can just do it, no board meetings or approval needed. In fact, whilst typing this I just got a bundle-deal suggestion from a web portal and approved it with a single email! Indie studios are like sprightly, agile mice versus the 1,000 pound gorillas of AAA game publishers - they may be more vulnerable in some ways, but they compensate in others.

The games industry is diversifying and expanding and there is room for every kind of pricing model under the sun. Eventually, the free market will work out what makes sense and what doesn't, but in the meantime, lets just vote with our wallets, and accept the fact that price experimentation in any direction is good news for gaming. Game developers don't know what the price model is yet, and neither do gamers, but lets stay calm and let the future of game funding evolve at its natural pace.

Cliff Harris is the founder of Positech Games, the independent developer of Gratuitous Space Battles and the Democracy and Kudos series.
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