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When worlds collide

When worlds collide

With more DLC finding its way to retail shelves, are we seeing the start of a healthy relationship develop between bricks and mortar and digital distribution? James Batchelor reports...

The growing importance of downloadable content is plain to see. Almost every major release over the past year has boasted DLC episodes and expansions, and now this content is making the journey from the online space to the High Street.

Since the summer, the industry’s release schedule has been rife with titles that originated from or contain previously digital-exclusive content, destined to sit on shelves alongside or replace their original retail versions.

This has been a mix of standalone versions of the DLC itself, such as Fallout 3’s Game Add-On Packs and the upcoming Grand Theft Auto: Episodes from Liberty City, or games that were previously released online, such as Warner Bros’ Watchmen: The End Is Nigh.

Alternatively, there are a number of upcoming expanded re-releases such as Star Wars: The Force Unleashed: Ultimate Sith Edition, and the Game Of The Year editions of Fable II and LittleBigPlanet, with content that has previously only been available online.

In short: digital distribution has come full circle – and while retail might not be the place that these games or add-ons originally ‘premiered’, they are proof that publishers have moved to bring a bit of unity, and find ways to encourage more sales, from how digital and retail can intersect.

“The only way that retailers have traditionally been able to participate in DLC is through the sales of points cards,” says Activision Blizzard’s brand manager Simon Wells.

“By releasing existing DLC as part of a bundle with the original game, retailers get the opportunity to share in the success and sales of this additional content, as well as maintain the product’s longevity.”

A SHOT IN THE ARM
Add-on packs are nothing new, but the digital debut of them followed by a migration to disc is something that has only truly developed in the last one or two years, and as such the industry is watching these products carefully.

Take-Two, for example, has told investors it will base its policy on future digital content on the expected success of Episodes from Liberty City, a new disc which incorporates the DLC for GTA IV.

“Everything is going to have a download component, needs to have a download component to it and this is one of the key lessons [we’ve learned from GTA IV],” CEO Ben Feder revealed during a recent investors’ call.

“We’ll see how [the DLC] in the retail SKU performs. We are actually pretty optimistic about it and we think it’s terrific value – for $40, two great GTA games boasting new content at retail is an unbelievable value.”

Given the high budgets for games like GTA and their extra content, the profit-making and cost-mitigating potential of repurposing DLC to reach new consumers is obvious.

Of course, even without a retail release for downloadable content, retailers have been benefiting from the continued digital support for new and older releases. Gears Of War 2 was propelled back into the charts in July, thanks largely to the release of its Dark Corners DLC. Bringing such online material to shelves as new or expanded products only serves to improve a game’s sales and status further.

“As a brand extension, DLC gives consumers a longer playing experience and helps maintain the profile, sales and shelf-life of the original game,” adds Paul Oughton, sales director for Bethesda – who likewise recently saw Fallout 3 re-enter the charts alongside an add-on disc filled with former DLC content.

Hybridising the digital and retail worlds helps to extend and promote brands and their shelf-life, Oughton says, as well as providing benefits to both the traditional bricks and mortar world, plus the ever-expanding digital one.

DIRECTOR’S CUT
As parallels continue to emerge between our industry and that of Hollywood, the rising number of DLC-enhanced games on the shelves begins to follow the trend set by the DVD market.

Some of the most popular films of all time have been able to maintain sales momentum and stature over long periods of time via re-release in the form of special editions, ultimate editions, director’s cuts – all driven by the inclusion of extra content. Key classic games can now become more permanent fixtures on store shelves in the same way.

It’s a technique that could become more prevalent in the games industry should the current line-up of titles based on downloadable content prove to be strong sellers.

With many games falling from the public mindset mere weeks after their debut, such products stand to recreate the success seen with expanded DVD and album releases – something retailers will no doubt welcome.

“We’ve always felt that, where possible, added value is more often than not a preferable route to achieving enhanced customer engagement and increased traffic and higher spends,” says HMV’s head of games Tim Ellis.

“We’ve seen that with film content and, increasingly, the music industry has woken up to this also – so I feel it’s something we can successfully incorporate into our games offers when appropriate.”

But the games industry should learn from the more entrenched video and music retail business before exploiting it too heavily, warns Kim Bayley, director general of the Entertainment Retailers Association.

“Publishers also need to be aware of growing consumer scepticism of ‘bonus features’ that has already emerged in the video and music businesses,” she says.

“Products really need to justify themselves in terms of gameplay, additional features and quality otherwise there is a danger that consumers will turn away from such products.”

Activision’s Wells agrees, pointing out that that DLC-based retail products need to be carefully tweaked and targeted as they are not being produced for the same market as those who have made the downloadable content successful in the first place.

“The consumers that purchase DLC through retail are different to those that purchase directly online,” Wells adds. “Current owners of the original game who are looking to increase their gaming experience are the key targets for the online DLC, whereas the retail strategy is very much aimed at new consumers to the franchise and those yet to purchase the game.”

STRANGE BEDFELLOWS
So the latest wave of DLC released on disc is proof that publishers are far from ready to give up on retailers yet, despite the lower distribution costs and immediate community connection offered by digital sales. But while the age-old fear that digital distribution will somehow eclipse traditional bricks and mortar games releases isn’t yet realised, it’s clear publishers will keep pushing the boundaries.

While DLC still drives disc sales, the hype and excitement around the introduction of new content is now something the digital world lays claim to.
During its fiscal conference call, Take-Two chairman

Strauss Zelnick assured board members that “retail remains our primary channel”, but his colleague Feder did admit the firm will be supporting both routes to consumers.

“It’s clear that retail is the channel for the foreseeable future,” he says. “The games live online and they live at retail. They live at both and whether that is download first, retail second/retail first, download second or some combination of the two, that’s an area that we are going to experiment with.”

Nevertheless it is clear that going forward the two worlds of digital and retail will work hand in hand to capture as wide an audience as possible. The industry is confident that this relationship can only become stronger.

“I think there is a tendency to sometimes undervalue its importance, but retail plays a key role in engaging customers,” says Ellis. “For this reason, we believe more DLC will appear on disc in future.”

Bayley adds: “Retailers provide an excellent shop window for these products and, while many publishers may consider direct-to-consumer downloadable offerings as their ultimate goal, they need to be mindful of the real benefits of third-party distribution through retailers: namely, the implied endorsement of a trusted name, the long-term relationship with a favourite retailer and service with a human face.”



WANT MORE ON DIGITAL DISTRIBUTION?
The October 27th London Games Conference is the first event dedicated to the world of digital distribution.
Taking place at BAFTA, Piccadilly, Sony, Nintendo, Microsoft and GfK-ChartTrack have already confirmed they will be presenting.
It costs £229 to attend, with discounts available for ELSPA and Tiga members.
To book your place, contact Rob.Baker@intentmedia.co.uk.

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