DLC Has Become About Recouping Cost

Nintendo recently announced that The Legend of Zelda: Breath of the Wild will have paid DLC. Now, this is too surprising as every modern game this day has DLC, and Nintendo has typically been good with their DLC practices as of late. However, Breath of the Wild has become part of a larger trend in video games. A trend that has led to every game having DLC, early access and any other strategy that makes consumers feel that they are being nickeled and dimed. It’s that games are getting too goddamn big.

The problem with modern games is that, as they get bigger they take far longer to make. When making a game, the developer/publisher spends the money up front and then makes a return when they sell the game. The developer will not recoup their cost until the game is finished and on store shelves. That was fine when games took about 2 years to make, but now games are becoming multi-year investments. Game development can run for 3-5 years if not more. You won’t be able to get a return on your initial investment until 3-5 years in the future, and if the game flops, you’re out a lot of money.

Final Fantasy 15

Perhaps the best example of a game that has taken forever and a day to come out is Final Fantasy 15. After being in purgatory for 10 years, the game finally released on November 29, 2016. The director has stated that the game covered its cost on day one. Impressive, but does this tell the whole story? Obviously, the cost of material and labor go into the cost of the game, but what about overhead? Overhead includes the insurance, utilities, and rent need to be covered. For a game that has been in development for 10 years, there are plenty of costs that the company would have to cover without any revenue. As the article noted, Square-Enix did not give any information about how much the game actually cost.

On the other hand, there is also the issue of the game’s opportunity cost. In layman’s terms, opportunity costs are the cost of alternatives. As development cycles get longer and longer, sales need to increase to match the cost. Although Square-Enix has stated that the game is the fastest selling game in the series, the game has only sold 6 million units. This is still a far cry from Final Fantasy 7 (selling 10 million). Moreover, I’m sure Final Fantasy 7 took less time to make. In the end, the game cost more and sold less

Instead of making Final Fantasy 15, Square Enix could have made just as much money making 3 smaller titles with a 3-year development cycle that would sell about 2-3 million. In this scenario, the company recoups their investment within 3 years rather than waiting for 10 years to make their money back. This may also explain why Square Enix is dishing out so much DLC. The company will release 6 DLC packs plus and more DLC that isn’t covered in the season pass. They want to milk every nickel and dime to make Final Fantasy 15 look like a better investment.

The Legend of Zelda: Breath of the Wild

Breath of the Wild has the same issues.  Once upon a time, the game was going to be released in 2015 and we were excited to play it on the Wii U. The game was in development for 4 years and had 300 people working on it. Nintendo is likely looking at the development cost and thinking the same thing as Square Enix. They need to get what they can with this game.

I don’t think it’s unusual when they announced this. Fans are incredibly excited about the game, and Nintendo wants to capitalize on this in order to maximize their return. Nintendo has been good with their DLC practices, ensuring consumers that the content entirely new and not something held back to charge you more. Nevertheless, Nintendo is jumping the gun. Sure, from a purely financial perspective, it makes sense; strike while the iron is hot. But Nintendo is only sullying their otherwise great reputation for DLC.

And this highlights the problem with the current video game market and DLC. Practices like DLC become more common as development gets longer and more expensive, but consumers dislike DLC because they feel like they are being ripped off. Nintendo would have been wise to wait until they had something to actually show, but then they couldn’t rely on the hype of the game. DLC can often be putting money over your consumer. Without happy consumers, a business won’t last long. Essentially, companies trip over dollars to pick up quarters.

The Future of DLC

The sad truth in all of this is I don’t see these practices ending anytime soon. Games are still getting longer, bigger and more expensive, but game prices have remained flat. Games were $50 throughout Generation 6 and were $60 throughout Generation 7 and 8. Cost are going up, but the sales price has remained flat. So how do you make money? Companies now rely on selling add-on to their most dedicated fans.. This is why we are seeing so much in the way of DLC and early access. Sure, I’m sure some of this is driven by pure greed and wanting to squeeze all they can out of consumers, but I think a great deal of it is due to shrinking margins related to the behemoths that major publishers are releasing.

And of course, the more DLC and early access that is bought, the more companies will do this. When you buy DLC, you are telling the publisher “I want more of this.” If you don’t like Final Fantasy 15 selling you a plethora of season passes and more on top of the season passes, don’t buy anything. If you don’t like Nintendo announcing DLC before anyone gets a chance to play the game, then don’t drop an extra $20 when the game comes out. If people are against DLC, then they won’t buy it. The strongest incentive a company will respond to is money. Yes, companies are doing this because of shrinking margins, but they would stop doing it if you don’t buy it.

So where does the game industry go? Will company sell with more and more DLC? Or will games get smaller allowing for better margins and less of a need for DLC. Or maybe games will be priced based on their content rather than universally. In the end, you are the deciding factor in all of this. As I said, companies respond to money. How you spend your money determines which way the industry will go.

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