The Research & Analysis division of analyst firm Forecasting & Analyzing Digital Entertainment (FADE) has announced their first downloadable content (DLC) report for Xbox 360 and Playstation 3. The report provides insight into the success and growth of DLC as an additional revenue stream for publishers and developers, and the reaction of gaming consumers as the DLC concept has taken root.
DLC: a brief history
As internet connections improved during the 1990’s, the concept of downloadable content first emerged as developer or publisher provided content that wasn’t distributed on physical media. The PC gaming market was the first to benefit from this, and for free. Coupled with user-generated content and mods, PC gamers had it good.
The Sega Dreamcast was the first console to feature online support as standard when it launched in 1998. Due to the low speed of internet connections at the time, there wasn’t much content available, and what was available wasn’t very large. Still, the feature was considered a huge innovation for consoles. Unfortunately for the Dreamcast, the PlayStation was dominating the console market, and the PlayStation 2 was gearing up for release in 2000. The PS2 was lacking a network connection as standard, stalling a DLC boom on the PS2 platform.
The original Xbox, released in 2001, was the first console to successfully implement a DLC scheme with a number of original Xbox LIVE titles enjoying free DLC. Microsoft became the first company to charge for DLC with the game Mech Assault.
From there, the concept of paying for additional content has grown in leaps and bounds. The advent of the Xbox 360 and its LIVE Marketplace (November 2005) and the PlayStation 3 and its PlayStation Store (November 2006) has cemented paid DLC in the gaming market.
Even PC Gamers, typically used to receiving free additional content, were indoctrinated into the DLC mind set. One of the most notorious early PC DLC packages, launched in April 2006, was Bethesda’s dubious US$1.99 Horse Armour for The Elder Scrolls IV: Oblivion. The same product was US$2.50 on Xbox LIVE. The Horse Armour DLC highlighted the main concerns with these schemes – publishers over-charging for weak content, and developers removing portions of their titles for sale as DLC post-launch.
The Elder Scrolls IV: Oblivion Horse Armour DLC – you know you want it
Regardless, DLC seems like it is here to stay. Below FADE provides analysis on the current DLC market.
FADE Analysis on the DLC market for Xbox 360 and PlayStation
By mid-May 2011, FADE estimates that console DLC has generated over US$1 billion in revenues [life-to-date] between both consoles, playing an integral role in the health and economy of the video game industry. Revenues favour the Xbox 360 slightly, as the Xbox 360 has generated an estimated US$750 million to the PlayStation 3’s estimated at US$640 million.
DLC has a ‘long way to go’ in reaching peak market penetration
FADE notes in their report that the average timeframe in which to launch DLC is between 180 and 190 days after release of the retail title. Despite this, many developers are seeing success launching content sooner than the average.
FADE notes major successes in rollouts such as Call of Duty: Black Ops’ “First Strike” map pack, which released just 89 days after launch (1 February 2011 on Xbox 360), and has seen an estimated 2.6 million downloads by mid-May on the Xbox 360 – attaching to approximately 21% of all owners of the title. The PS3 version of First Strike released on 3 March 2011, and the PC version on 25 March 2011.
Multiplayer games aren’t the only ones seeing significant success in regards to sales, as multiple releases from Bethesda’s ‘Fallout 3’ and BioWare’s “Mass Effect 2” have yielded 3.9 million and 1.6 million downloads, respectively.
“Average attach rates among all downloadable content are roughly 10%, but top-tier titles are attaching at 15% or even 25%,” said FADE Director of Research & Analysis Benjamin Schlichter.
Estimated Top 5 Life-to-Date Downloadable Content items, by estimated revenue
• X360 – Call of Duty: Black Ops (First Strike Map Pack) – Treyarch / Activision – 2.6 Million Downloads
• X360 – Grand Theft Auto IV (The Lost & The Damned) – Rockstar Games / 2K Games – 1.5 Million Downloads
• X360 – Halo 3 (Mythic Map Pack) – Bungie / Microsoft – 2.6 Million Downloads
• X360 – Halo 3 (Legendary Map Pack) – Bungie / Microsoft – 2.5 Million Downloads
• PS3 – Grand Theft Auto IV (The Lost & The Damned) – Rockstar Games / 2K Games – 1.2 Million Downloads
FADE Note: Top 5 is based on DLC items that include achievements/trophies and may not be an exhaustive list.
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