Focus: Digital marketplace

Focus: Digital marketplace

What would you say is a key product to stock during February? Halo Wars? Killzone 2? How about an Xbox Live points card.

In fact, it would be a good idea to stock up on some of last year’s biggest releases as well, with major downloadable content coming for Grand Theft Auto IV, Tomb Raider: Underworld, Fallout 3 and Burnout Paradise.

“We certainly expect our DLC to boost sales of Fallout 3,” says Bethesda’s European MD Sean Brennan.

“There will be significant PR coverage, and Microsoft will be promoting it heavily on Xbox Live. This will attract consumers who missed it pre-Christmas, as well as new hardware owners. The online community is very important and the Live connectivity ratio to installed base is impressive.

The majority of 360 owners in particular will have significant exposure to the DLC and those who have not bought the game will certainly consider it. I would suggest that any retailer reading this ensures sufficient supply.”

Fallout 3 isn’t the only title to get extra coverage, with Rockstar’s digital update of GTA IV enjoying the same level of column inches as your typical big-budget boxed product. So re-stocking  the original game could pay dividends – if promoted right.

Furthermore, publishers are keen to tie-in their DLC with retail. Microsoft’s upcoming Halo Wars Limited Collectors Edition comes with part of the Halo 3 Mythic Map Pack, EA has re-released Burnout Paradise complete with extra DLC, and last year Activision published a special edition of Call of Duty 4, which included a code for the game’s Variety Map Pack.

“These programmes are a great way for us to share the success of the DLC with our retail partners,” explains Activision brand manager Simon Wells.

“The Call of Duty 4 Game of the Year SKU has been a great success over the last year and I’m sure this is something that will be looked at closely for future releases.

“DLC is very important for Activision. It helps us to maintain product longevity and satisfies consumer demand for extra content, thus driving brand loyalty. The ability to satisfy our communities is an integral element in developing our brands and ensuring successful franchise growth for the business.”

Publishers and developers are increasingly paying more attention to DLC. Gamers are no longer merely treated to an extra weapon or car, but rather extensions to the story, entirely new missions and multiplayer modes.

“I think developers already have a great attitude towards DLC,” says Microsoft UK’s head of entertainment and gaming Stephen McGill.

“If you look at all of the blockbuster titles of 2008 – Gears of War 2, Fable II, Fallout 3, Mirror’s Edge – they are all hugely supported by DLC. We’re seeing that developers and publishers are recognising DLC as a great way of extending the life of their titles.

“Now, DLC is planned right from the early stages of production and is becoming an integral and essential part of game development. Because of this we are seeing sales uplift of the original games when good premium DLC comes out, which benefits retailers, publishers and developers.”


RETAIL BONUS

Although a wealth of digital add-ons can be found on PlayStation Network and WiiWare, Microsoft has been the most active platform holder in the DLC space. The firm has signed unique content for Tomb Raider: Underworld and Fallout 3, and has reportedly spent $50 million to secure two exclusive Grand Theft Auto IV packs.

“We’re thrilled to have some incredible premium DLC for third party titles like GTA IV coming up, and that’s without mentioning our own game-expanding content,” continues McGill.

“Our Live platform continues to go from strength-to-strength. We recently announced that Live has generated over $1 billion worth of revenue from transactions.

"This is an incredible number that cannot be taken lightly, and developers and publishers are absolutely rethinking their business models to incorporate additional content to sit alongside boxed product wherever possible. Of course Live points are a very efficient and profitable revenue driver for retail as well.”

Although downloadable content can provide additional revenue for publishers, it can also be vital to a brand’s continued success, particularly for music titles such as SingStar, Rock Band and Guitar Hero.

“Downloadable content is a very important part of the Guitar Hero experience,” states Red Octane senior brand manager Ian McClellan.

“The key to successful DLC is listening to what our fans want. We asked our UK Guitar Hero community what bands they would like to see in World Tour, and they said Oasis. So at the launch of the game we had three songs available as DLC from Oasis’ Dig Out Your Soul album.

“We are also at the stage in 2009 where, in addition to physical product launches such as Guitar Hero: Metallica, we will be releasing DLC weekly – and we believe this is a successful strategy for the franchise.”

BRAND  BUILDING
With new DLC released on a weekly basis, it appears the digital download market is starting to hit its stride. However, publishers are keen to point out that this isn’t a replacement for retail releases, but a way to grow brands and develop fan bases, so that everyone can benefit in the long-term.

“DLC certainly won’t be a substitute for packaged goods,” concludes Brennan. “Rather it should be seen as a way to extend product life cycles at retail by maintaining consumer interest and creating value for money. It’s also very beneficial in terms of building brands and enhancing relationships with the consumer.”

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