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Halo 5’s Free DLC More Profitable Than It’s Paid DLC

Welcome to episode 91 of the Gamers of the Lost Spark podcast. Another delve into the underbelly of the gaming underworld’s news metaverse examining the stories, rumours and games of the last 7 days.

This week an interesting argument put forward by Michael Pachter (Pachter Factor) makes the point that there is a shift in the DLC model and that instead of DLC being slices of paid for additional goodness for the games we love, that in fact free DLC, apart from being most welcome by the gaming community – who doesn’t love free stuff? – can actually prove to be more profitable than paid DLC.

How can that work? is the resounding retort. Well, Mr Pachter goes on to explain this using 343 Industries Halo 5 as an example of where this model has been a success.

Halo 5 took a different approach to the more standard paid DLC model that we are used to these days. What the guys over at 343 Industries did was to make the first 6 months of DLC for the game free. That’s right, free and many people will know this having played one of the bigger hits over on Xbox One. So that’s fantastic, 6 months free DLC for the Halo 5 community, great move guys, much appreciated. Hold on though, is this just an incredible gesture of goodwill from developer / publisher to the gaming masses? I mean, what’s in it for them? Apart from the love and gratitude of the gamers of course – a commodity more precious than any currency. Oh hold on, yes, of course, back to the real world.

So the game is out there and the first 6 months DLC content is free to all players, yet Halo 5 made more money than any previous Halo game and this was due to the in game microtransactions. What happened in this case was, due to the DLC being free for all, Halo 5 kept more players playing the game than it had ever done before and in doing so, kept a bigger pool of customers enjoying the game who were then potential purchasers of in game microtransactions. The results from 343’s experience with this model indicate that more profit can be made by keeping more players involved in the game and so increasing the pool of potential (and real) microtransaction purchases than charging for separate iterations of DLC content.

Mr Pachter cites an approximate model of DLC purchase trends explaining that with each paid DLC drop there is also a drop in player take up, with the first DLC being the most popular at say 80% take up, the second being picked up with maybe 50% of those guys and the third DLC drop having the lowest purchase rate. It was this trend that paved the way for the ‘Season Pass’ that we have today, as the publishers looked for ways to stop that drop in take up of DLC over time by offering the lot at a discounted price.

This model only works for games that include DLC and have potential for communities to grow and thrive on their platforms. The type of games that are sure to be the focus of Microsoft’s recently announced ‘Games as a Service’ strategy, the most obvious being competitive FPS games like the Halo’s and the Titanfall’s, it would be more difficult to apply to other genres so we will probably not be getting single player campaign DLC for free anytime soon.

All said and done though, it’s an interesting idea that has already been used and turned a greater profit than the more traditional approach. Keeping all those players in there obviously reaps rewards while at the same time keeping those servers nice and busy with more players, in turn making the experience for the gamer more enjoyable for a longer period, potentially creating more fans who will be pre-ordering the next game.

Sound good? Or would you prefer the more traditional model? As always let us know what you think.

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There’s More To Gaming Than Just ‘Triple A’

In this weeks podcast we have all the usual fun frolics and frivolity as the guys discuss the week in gaming, what’s hot to play and everything in between. Hold on to your control pads gamers, it’s Episode 89 of the Lost Spark Podcast.

An interesting point in the news (courtesy of wccftech) this week was made by Cliff Bleszinski (Cliffy B) of Unreal Tournament and Gears of War fame and more recently the co-founder of Boss Key Productions.

During industry conference Reboot Develop 2017, Cliff took to the stage and put forward his view that ‘AAA games’ cost too much to make and the development of such games are a ‘nearly unsustainable’ model, his reasoning behind this is based on a number of points including the fact that:

  • Customers can only afford a few $60 dollar games a year and this price is a high point for most consumers
  • Consumers have been burned with DLC / Bugs in their games
  • Player expectations are very high in terms of Graphics. feature sets and polish and quality

Citing Horizon Zero Dawn as an example, Cliff went on to posit that the seven year development cycle for a project like this can be undertaken and afforded by Sony with the reason that they can get so heavily invested in something like this is that they will be the ones profiting from the sale of their consoles, which a game like Horizon Zero Dawn is very likely to have a positive effect on. ┬áSo Sony – whom Horizon Zero Dawn’s Developer Guerrilla Games belong to – has two branches here, both the software and their hardware, with which they can recoup their investment and further to this make a profit.

In contrast to this he then made a comparison to the financial commitment that was made by Take-Two with regard to Bioshock Infinite where the outcome of overstretching to fulfill a AAA vision resulted in a number of lay offs over at Irrational Games.

A remedy for this, he suggested, would be the advent of the ‘AA game’. These games would be games that despite a restricted budget focused on what matters most, giving examples of his type of game being the likes of Rocket League by Psyonix and Digital Extreme’s Warframe adding also that digital only would also be a consideration for success.

So, have our expectations got out of hand, or is the amazing high standard and polish of the games we see nowadays simply a result of the evolution of technology and the desire of creators to improve, innovate and deliver that next big thing? Is it all simply about the bottom line (obviously to a great degree, it’s business), or is there something to be said for the ambition of developers and creators to express themselves and push the limits of the gaming medium via the technologically impressive consoles we use today?

Whether it’s gamer expectation, businesses pushing for profit or creators with the passion and determination to bring their ambitious gaming visions to the gaming community, it does look like there is a point here. No one likes to hear about studios closing, job cuts, or devs not getting paid for their hard work and if this can be avoided by simply scaling back ambition on a project and being more realistic in financial terms of what can be achieved then that’s great. Though conversely, it would definitely be a shame if the spectacle of the ‘AAA game’ was only within the reach of the hardware manufacturers.

Ultimately, if the costs of the AAA’s continue to get out of hand and cause businesses problems the amount made will dwindle as the lessons are learned.

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