I was speculating recently on what Downloadable Content in the video game industry means. So I wanted to do a bit of a though experiment.
What does DLC mean in the game world?
The first thing everyone thinks of is that stores will take hits – especially GameStop and to a lesser event Best Buy. They'll have to make less money, perform other services, find ways to leverage DLC, and so on.
Now let's go farther.
PACKAGING:
First of all DLC means no burning CDs and carts, or less of it at any rate. The companies that do such things take a hit.
No CD's also means no cases. No boxes, manuals, packaging. Those companies take a hit. The people that design such things don't have these assignments or contracts anymore.
No CD's also means no (or less) "cover art." The box doesn't have to sell the content now as there IS no box. The "cover art" may be more of a promotional for flyers or ads, etc. but it won't go on the box. Jobs for artists just changed.
MARKETING:
Marketing now gets crazy because you're marketing to a different group via DLC. How do you go from selling a physical copy to – well, not? What marketing deals do you make with DLC service providers? How do you reach people – and bring in new customers?
DEVELOPMENT:
Now game development is about that which can be installed – as opposed to burned. Licensing issues may be different with codecs, software, etc.
Size issues become a potential problem as machines may have different hardware size – as well as bandwidth.
SALES:
Your content is out there, and you have to track downloads as opposed to units sold. Your whole model of income projection and estimation goes out the window with DLC as you've changed how and when people get the game, see the game, etc.
PERIPHERAL PRODUCTS:
Attempts to monetize the product in other ways – memorabilia, etc. change too. Where do you sell it? How do you promote it? You can't put adds in the product packaging as it doesn't exist. You have a growing audience used to downloading things now.
Cheat manuals become more important as there are now manuals with a game of a physical kind. New deals will need to be reached – and competition from gamefaqs.com and such change things as well as you have a population increasingly going on line for game resources.
ONE method of delivery changes things for a lot of people and companies. A change to DLC modifies everything.
Now think of how many other industries are in change right now – publishing, smartphones, etc. – and you get an idea of just how much IS changing and bloody fast in the geekonomy.
And we have to keep up on it.
– Steven Savage