In Defense of DLC

Preface (5/12/2015): A few weeks ago Polygon posted a news article revealing the Arkham Knight DLC and pricing. The news post was very aggressive and judgmental of the model, and the tone of the comments was mostly angry. It was very clear that the core gamer crowd reading that article did not understand how DLC was made, or why it could be good for them. Later that day I wrote an article that I pitched to Polygon, with the goal of educating their readers a little bit. I haven’t heard back from them, so posting it here! My summary of it is really simplistic compared to the real deal, but it was as detailed as I wanted for the audience.

Hey Polygon readers! Recently Rocksteady announced a $40 season pass for Arkham Knight, and there was some lively discussion in the comments. I saw two themes: some people were angry because they thought that this DLC could have been ready at launch, and was being withheld from gamers out of greed. Others complained about the general trend of having to buy DLC to enjoy the “complete experience”.

I think that all of this anger is misplaced. So let’s talk about DLC, and why, done right, it is a great thing for gamers and game developers.

Game Development Cycle

Let’s start with some basic background info on game development. The development cycle for a classic retail game, without any DLC or expansions or on-going service, looks something like this:

  1. Early concept: This is the “ideas” stage: A very small team brainstorms, finds inspiration, writes up documents and builds very rough prototypes to communicate their vision. This is when the core ideas are born, and when they pitch the concept to their publisher to get funding to move forward.
  1. Prototyping and Pre-production: A small team starts building rough prototypes. These are proof-of-concept pieces that are used to learn what will or won’t work for the game, and what sort of resources they’re going to need. The work done on these prototypes often doesn’t make it into the final game at all, because they’re pumped out fast. In a healthy development cycle, there’s a lot of iteration during this stage: things are built quickly, the developers learn from them, and then they’re torn down and replaced with a new improved versions. The more of these “iteration cycles”, the better the game.
  1. Production: This is the largest and most expensive phase, and usually the longest. Huge numbers of people are needed as the project “ramps up”. Almost all game assets (textures, models, animations, music, sound, etc.) are built during this time. The goal here is to get the game to a “feature complete”, or “alpha” stage: it can be played from start to finish, with all of the major features and game systems functioning.
  1. Post-production: This stage varies a lot depending on the game, the platform, and the business model. And you might see it referred to with different names. But it typically begins once a feature complete alpha build is done, and it is the home stretch where lots of balancing, polish, and fleshing out the game elements happens. This stage is often broken up into Alpha, Beta, and “Gold Master” or “Release Candidate” milestones. The gold master is the build that is used in the initial disc printing, if it’s a game that appears on physical media. It’s worth noting that the Gold Master build of a game is usually locked down to bug fixes only long before the game is actually released, even if it’s a digital only game. This stage is also when development teams start to ramp down and require fewer people.

The most important take-away here is the number of developers required on a game project at different stages: It starts out very small, grows enormously, and then starts shrinking back down.

Graph showing distribution of resources when developing with a traditional AAA model, sans DLC.

So what are all those extra developers doing during the Concept, Pre-Production, and Post-production phases? Well, in classic game business models, game companies are left with the following choices: Lay them all off and re-hire later, pay them to twiddle their thumbs doing nothing or doing low-value work that might not be worth their salaries, or have many games in concurrent development so you always have a use for everyone. That last option can be unrealistic, because few developers are that large, and a perfect cadence is difficult because of the unpredictability of development.

But! DLC provides a flexible outlet for all that otherwise wasted manpower. Got a couple of extra 3D and texture artists with no work to do, because the game’s locked down to bug fixes only? Have them make new skins! A level designer locked down her designs months ago, because it takes time to finish polishing levels and recording professional voice actors? Have her start working on the DLC! It takes a couple months to produce, ship, and advertise the finished game even after the Gold Master is 100% locked down; so have your team work on the day 1 DLC!

DLC is often built by using resources that would otherwise have been wasted or laid off, and it allows the distribution to look more like this:

Graph showing distribution of resources when developing with a DLC model.

Development Cost

Developing AAA games costs more than it used to. It’s difficult to find precise data on this, since companies rarely share their numbers, but a quick Google search will find you some articles. Anyone who has sat through the credits of a modern game knows this intuitively: Morrowind had 72 names, while Skyrim has 735. The Legend of Zelda had 7, Skyward Sword has 262.

Adjusted for inflation, the retail cost of these games at launch in the US was:

  • Zelda 1: $103.39
  • Morrowind: $78.28
  • Skyward Sword: $62.61
  • Skyrim: $62.61

Modern games cost more to make and less to buy, and economies of scale can only compensate so far.

So with that in mind, the most important thing to understand about DLC is that it subsidizes the core game’s development. When publishers begin funding a game, they set target revenue goals for that game, including revenue from both the core game and the DLC. That expected revenue total is directly related to how much they are willing to spend on the creation of the game – again, including DLC. The more revenue they expect to earn, the more money they’re willing to spend on the game’s development.

A common complaint is that, dollar per dollar, DLC content is usually more expensive than the core game content. A simple example would be the $60 Super Smash Bros Wii U with 51 characters ($1.18 per character), with Mewtwo DLC ($4 per character). This is definitely true – and it’s a great thing for most of us. Why? Well, the higher profit margins on DLC means that Nintendo has higher revenue expectations, which means that they can justify spending more money on the game’s development. In short, we’re all getting a core game with higher production values because some of us are buying DLC.

The natural follow-up question is… couldn’t we get the same result if, instead of paid DLC, they just raised the price for everybody a little bit? The frank answer is that not all of us think that that content is worth paying extra for. It’s hard enough to convince people to pay for $60 games at all; raising that number is often a losing strategy for game makers. So the DLC model gives us some wiggle room to pay what we feel the game is worth: the core game only if that’s enough for us, or a few extra bucks on additional content if we really like the game. I myself almost never buy DLC, but I’d gladly spend another $150 on Smash Bros characters, because I love the game that much. And I’m super excited to live in a world where I can continue to get Smash content, instead of waiting another five years for the next one.

And for most games you could always wait two years for 75% off of the Complete Edition in a Steam sale. That strategy is a great one for many of us, and it’s also often good for game makers: it provides a secondary spike of sales long after the initial release, including many from impulse buyers who would never have bought the full-price game. It’s very much a win-win for all involved.

So let’s recap: DLC reduces developer layoffs, leads to higher production value without raising the cost, gives us more content in the games we really love for a small price, and we can enjoy all of these benefits on the cheap if we’re willing to wait for the Steam sales.

Final Caveats

I want to be clear that this is not intended to be an endorsement of all DLC everywhere. It’s still quite possible for companies to do it badly. Season passes are often sold without sufficient description of what they’re getting you. Having to think about which version of the game you’re getting, and make a bunch of little purchasing decisions, is often a negative experience. Some game makers might be too aggressive with chopping the experience up and leave the core game feeling unfulfilling. Store-exclusive DLC is no fun.

But! Many developers do an excellent job with it, and many of the common complaints are founded on incorrect assumptions about how game development resources are allocated. DLC is a great thing for this industry, and even Day 1 DLC can be done right. Next time you see some new DLC announced, remember the good it does us all!

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