Tag Archives: Michael Pachter

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.

Continue reading

Pachter Basics – Could we be Console-less by the Next Gen?

In light of Michael Pachter’s discussion at DICE Europe last week, the Spark’s take some time to examine his prediction of a console-less future in which gaming is directly accessed via Smart TV’s or set top boxes and the like. Would millions more Gamers dive in, would a change like this herald a new dawn of gaming but most importantly, could a potential lack of new consoles ruin Christmas morning?!

Continue reading