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EA to release paid DLC before boxed games

Mon 22 Mar 2010 3:57pm GMT / 11:57am EDT / 8:57am PDT
Business

UPDATE: Digital content will test viability for High Street releases, says analyst

Electronic Arts intends to release premium downloadable content for games prior to the release of boxed titles in an effort to gauge consumer reaction and the market viability of new games.

That's according to Wedbush Morgan's Michael Pachter, who was told the details of a new online initiative by Visceral boss Nick Earl last week.

"Mr. Earl revealed a strategy to release premium downloadable content (PDLC) as a product for sale prior to the release of a packaged product," Pachter wrote in a note to investors.

"The PDLC would be sold for $10 or $15 through Xbox Live and PlayStation Network, and would essentially be a very long game demo, along the lines of 2009s Battlefield 1943. A full-blown packaged game would follow shortly after the release of the PDLC, bearing a full retail price.

"Mr. Earl believes that the release of the PDLC first limits the risk of completing and marketing the full packaged version, and serves as a low-cost marketing tool," he added.

Speaking to GamesIndustry.biz, Pachter added the PDLC would essentially act as a shorter game, although he was unclear on whether the PDLC would then be included in the High Street product.

"Think about Battlefield 1943 as the prototype, so a full (but short) game experience for a reasonable price. At the same time, an expanded version of the game will be under development for release as a packaged product," he said.

"Im not sure if the packaged product will include the PDLC or not, so cant answer that question. However, the idea is that if the PDLC gets favourable reviews, it will build word of mouth for the boxed product. If the PDLC has issues, they can tweak the packaged product to address those issues, improving the final product before release.

"It actually sounds like a great strategy," he said. "Again, I dont know if they intend to include the PDLC in the packaged product, but my guess is that they wont. I think that the PDLC will be a 'prequel' to the full game, so that they can keep selling it after release of the full game."

Electronic Arts hopes that its digital business will account for a third of all revenues at the publisher within two years, as CEO John Riccitiello continues efforts to turn around the company best known for market-leading franchises such as FIFA and Madden.

The publisher is also expecting to save over $100 million on its previously announced staff reductions, as well as moving work from high cost locations such as California to cheaper regions including Montreal and China.

Digital initiatives by the company include a move to social gaming through the PlayFish acquisition, the release of titles such as Visceral's The Ripper for XBLA and PSN, and preparing premium downloadable content for games at the release of a boxed product the project $10 initiative already under way with titles such as Mass Effect 2 and Battlefield: Bad Company 2.

EA spent a day last week wooing analyst firm Wedbush Morgan, which has been cautioning investors on the company for years, but has now admitted that it was wrong to not see significant changes in the business.

Wedbush said that EA has managed to reduce console development costs by around 20 per cent by reusing its Visceral and Frostbite engines, and the company's recent purchase of social games company PlayFish was with the intention of entering and leading the space immediately, rather than building a social business over a number of years.

"Weve been wrong about this stock for almost five years," wrote Pachter. "Either were stupid, stubborn, or unlucky, but weve been wrong. The definition of insanity is doing the same thing over and over again, each time hoping for a different result.

"This time, while we are again hoping for a different result, we see evidence that the company is not doing the same things over and over again: lower headcount, fewer facilities, fewer games, a greater use of outsourcing, innovative combinations of digital and packaged goods content, a better greenlight process and a growing digital business. This time, we think that EA is on the right path," he concluded.

29 Comments

$10 or $15 that you can't redeem against the full game?

Posted:4 years ago

#1

Terence Gage
Freelance writer

1,288 120 0.1
"$10 or $15 that you can't redeem against the full game?"

That's what I was thinking -- perhaps if they offered a subsequent download to further 'upgrade' to the full game for an additional $30 or however much, but if what he's saying is true then this is basically a very expensive large demo. I can't see that working.

Posted:4 years ago

#2
Just updated the story with further details from Pachter. Chasing EA for comment now.

Posted:4 years ago

#3

Chris Hayward

34 0 0.0
This will work like a dream for EA in regards to its EA Sports division.

"Oh hi, we know you bought FIFA 10 on the day of release last year, so this year for a *cough* small fee we'll let you play certain aspects of the game early, gain achievements/trophies before your friends and make you a more awesome player because of it.

Love EA Sports"

Ridiculous but effective for die hard fanatics of ongoing games. It'll sell like mad, although maybe not at the price its suggesting. Half that and you're onto a winner

Posted:4 years ago

#4

Tommy Thompson
Studying Artificial Intelligence (PhD)

110 0 0.0
So running on Terence's Battlefield 1943 example, assuming they later release a boxed product with more maps/weapons and issues resolved, potentially means you're paying to play a beta? And like Richard and Terence, my first thought was whether I could then redeem my investment towards the final product. So apparently, expensive DLC is the future then?

If someone can cook up some clever approaches to introduce new IPs - much like the multimedia attack that was Dead Space - then this could prove really valuable. Otherwise, as Chris says, it'll simply be used to milk established franchises even further.

Posted:4 years ago

#5

Mark Raymond
Functionality Tester

20 0 0.0
If this PDLC is priced accordingly, and if some kind of subsidy is offered to existing owners when the "full game" comes out, I think it might work. It also very much depends on the quality of the PDLC and how it's pitched. Obviously, if the PDLC is a buggy, incomplete, relatively expensive mess, then it won't work and will draw the ire from a lot of people, and it won't sell.

Posted:4 years ago

#6

Leon Green
Political lobbyist & Gamers Voice Director

35 0 0.0
So they want us to pay for demos now? Is this their way of encouraging people not to pirate?

Posted:4 years ago

#7

Perry Chen
Studying Finance

17 0 0.0
This is just a larger symptom of decreasing profit margins in the video games industry. This scheme is just another form of price discrimination. Although this is somewhat similar to Project Ten Dollar, this time around, EA is trying to make money off hardcore fans instead of rewarding them with free DLC that used game buyers would have to pay for.

People who are calling EA greedy need to stop. Development costs have gone up by manyfold within the last decade, and video game prices (as stagnant as they are) are eating into the margins of an industry that was once very profitable.

If the video game industry is to survive in its current form, then someone will have to pay more... Otherwise, I can easily see the boxed product going away entirely, only to be supplanted by an array of pay to play services. That is something I anxiously shudder even thinking about it...

Edited 1 times. Last edit by Perry Chen on 22nd March 2010 7:38pm

Posted:4 years ago

#8
Reminds me of the GT Prologue. Very few games can get away with making people pay for demos.

It only works if you are definitely going to release the full price game anyway - otherwise you have all of the development cost, and none of the revenue of a full price release.

Maybe for a company like EA this makes financial sense? Who knows. And then the 'demo' can be downloaded as a 'demo demo', and played for a while before the 'demo demo' expires and the gamer pays for the 'demo'.

Posted:4 years ago

#9

Vitalii Moskalets
Game Designer

27 0 0.0
This is great news. This scheme must be connected to OnLive in future.
"Pay 15$ for playing in games through internet video streaming, but first you also have to buy our demo for 10-15$ and then you will be able to buy our full game for 50$".
Well, seriously there soon will be more sense for players to pay pirates for their work of delivering comfort and cheap gaming experience, than to pay publishers...

Posted:4 years ago

#10

Farhang Namdar
Lead Game Designer

75 47 0.6
GT Prologue has more content than most games released to date. You are paying for an incomplete game but it is completer than most of the products you're willing to pay for.

Besides why wouldn't you want to pay for something fun? If it needs a boost to completion pay for it. If it isn't entertaining why waste money on production. I can see this working from a developers point of view but personally I might be reluctant to pay for a similar product.

Edited 1 times. Last edit by Farhang Namdar on 22nd March 2010 10:07pm

Posted:4 years ago

#11

Sebastian Cardoso
Project Manager

15 0 0.0
On the one hand, it's clear that the idea of making customers pay for demos is ... unfortunate, to say the very least.

What absolutely baffles me about this is that it's nothing more than a rumor. Is this what it's come to? Matt: shouldn't you get confirmation from EA about this subject before publishing these kind of articles? Otherwise, we're all talking about something that could very well be nothing more than some guy's opinion/thought/delusion.

Posted:4 years ago

#12

Philipp Nassau
Student - Business Administration (M. Sc.)

51 19 0.4
The idea to release a maybe not so polished version to generate word of mouth is...disturbing. Still, generating cash flow earlier seems like a valid reason.
Basically, you have to pay for demos which would have been available for free 5 years ago. Makes perfect sense when you're trying to make money off an established IP, yet one would have to figure out a model that generates some surplus for consumers who bought the demo and the boxed game, otherwise a lot of people might just refrain from buying the demo. PDLC can work, as was demonstrated by Gran Turismo in the boxed sector.
Personally I think everyone has those 1-2 IPs he loves so much that it makes a little extra cost tolerable.

Posted:4 years ago

#13

Nick Gilbert
Games/Consumer tech journalist

1 0 0.0
So, question... No mention of PC. Is this a console only thing?

Posted:4 years ago

#14

Perry Chen
Studying Finance

17 0 0.0
@Mr. Gilbert:

Well, Ubisoft recently announced that there will be no demo for the PC version of Splinter Cell Conviction. It might become practice.

There are fewer demos out there these days, and given their size, I personally don't download too many demos these days either.

Posted:4 years ago

#15

Craig Burkey
Software Engineer

177 274 1.5
I was thinking it'd be like the new Mass Effect 2 Stolen Memory DLC being release prior to the game so when the full game hits you'd get an extra character to use and if you buy new you get the project $10 stuff for free and people who haven't already purchased the pre release DLC still can.

I think the key part of this is:
1.)content needs to be exclusive and not part of the boxed product(at least not the standard edition)
2.)content needs to provide added value to the full game
3.)content needs to be an optional component of the full game (eg. all weapons aren't underpowered without it)
4.)content needs to balance with the full game (eg. giving a one hit kill gun to people that purchase it would be bad)
5.)content needs to be available and useable post release(eg. either adaptive cut scenes or complete side quests seem appropriate to fit with the plot cronologically or they could ram an option into the start menu like Resident Evil 5)

I think most of these are standard requirements for DLC anyway so as long as the quality is high then it seems a goodd idea IMO

Edited 3 times. Last edit by Craig Burkey on 23rd March 2010 6:40am

Posted:4 years ago

#16
Hi Sebastian



Matt

Posted:4 years ago

#17

Tom Keresztes
Programmer

655 270 0.4
No demo for the PC, because people might choose not to buy the full version after the experience. Not that i am suggesting that their games are rehashes of sequels of sequels ! ;)
But i still believe that EA's games leave a lot to be desired in terms of gamer's appeal. Obviously their games are polished (they spend a lot of money on that), yet, still lacking... Maybe they should listen to their customers to find out why they are not making as much money from their games as they did a couple years ago.
As far as this idea is concerned, it has a danger of biting into the game's sales - as the preview must be really outstanding, or there would be no motivation to buy the full game after the PDLC.

Posted:4 years ago

#18

Eduard Pandele
Senior Game Designer

6 0 0.0
Tom: it also has the obvious advantage of luring otherwise uninterested players. It'll only work for extremely polished games, but as EA has lately proved a clear interest in quality over quantity, it might prove them right.

Edited 1 times. Last edit by Eduard Pandele on 23rd March 2010 9:03am

Posted:4 years ago

#19

robert troughton
Managing Director

220 93 0.4
This actually makes perfect sense to me... I can understand people's concerns but, at the same time, I can see why EA want to do this...

The problem with the games industry right now is that AAA games need to cost $20million+ ... publishers aren't willing to take any sort of risk on a game that isn't at least 75% guaranteed to sell well. You can see the same thing happening with movies - that's why we have so many superhero movies, "reboots" and sequels at the moment. The games industry has a slight advantage over the movie industry that it's able to do something like what EA are proposing here... with movies, it would be much harder to release a 15-minute movie to gauge interest before completing the full movie.

What EA are proposing will hopefully mean that games developers can start innovating again.

Posted:4 years ago

#20
It could also put pressure on retail, especially if the scheme expands to its logical end.

1. Pay XBL/PSN $10-$15 for the extended demo long before retail gets a sniff of any product
2. "Top up" the demo to the full thing on the day of release
3. Retail gets nothing, early adopters switch to the new scheme

I find it hard to believe that they would use the PDLC as a test for viability of the full game. The engine would be basically complete, the x% of the "demo" would need to be polished to shipping standard. Are the environmental artists, game designers, sound engineers etc etc, just going to sit about waiting for feedback from the PDLC to see whether they should bother completing the game?

Surely by the time that amount of effort has gone into the game it would be more economically viable simply to get some kind of return from the effort that would have gone into the product beyond what went into the "demo"...?

Similar to a lot of what Michael Pachter posts, I expect the actual reality of the situation is somewhat removed from his interpretation.

Posted:4 years ago

#21

Jeff Wayne
Technical Architect

83 37 0.4
If this paid beta test scheme contributes towards the cost of the game in the end, then I guess it's pretty good. Die hard fans would be salivating at getting an early glimpse (extended demo) of a title they dearly want to play, so there probably is a market for something like this.

However,if the price does not contribute towards the end game then I can't see this idea reaching any sort of real popularity or general acceptance at all. People already feel ripped off with the very clear indications of a shift towards less game for your money with a view to bleeding you of more cash on weak DLC.

Using GT:Prologue as an example I see on many discussions about this story on various sites. GT is the pinnacle of that sort of genre many people would agree. But what about games that don't meet that extremely high standard? There are very few games that are being released these days that are of a quality that high.

Of course people view quality in different ways which really leads me on to wonder why on earth AAA games development now has a budget of $20m+ to develop when indie developers are coming out with some absolutely amazing titles on a budget of $100k? Innovation comes in many forms - you can't really believe you need $20m+ to come up with some fantastic new gameplay ideas and see it through to delivery?

Posted:4 years ago

#22

Jack Loftus
Contributing Editor

95 0 0.0
What's the internal code name for this project over at EA? Did Pachter get that out of them too? I bet it's "Desperation."

And another: With this news I think it is safe to say EA has looked into every possible way of milking more money out of its customers with the exception of creating better games. It's almost like they're adding taxes to their existing library at this point, instead of innovating the software library itself.

Edited 1 times. Last edit by Jack Loftus on 23rd March 2010 11:56am

Posted:4 years ago

#23

John Cook
Senior Partner

27 12 0.4
We've been pitching this concept to various publishers since the inception of XBLA - and it make perfect sense if done properly. It solves a lot of problems for that riskiest of ventures; the new IP game.

The publisher funds up to the polished 'vertical slice' - which is the logical end of an extended pre-production phase - then releases this as a cheap download. Best case; rather than a smoke-filled room of execs giving the thumbs up or thumbs down, the games buying public get to decide with their feet whether they like the basic game premise or not. Hopefully it sells and the game goes on to full production.

Worse case - the game concept doesn't work, doesn't sell that many, but OTOH you've raised some revenue to offset the cost of development to date.

Obviously it can't work for all genre or game ideas - but if it gets more new IP onto the market, I like it.

Posted:4 years ago

#24

Jason Avent
VP, Studio Head

139 140 1.0
As stated, this doesn't make commercial sense. The most expensive part of developing a game is in the general systems you use throughout it. All the background technology, core systems, asset pipelines and so on. It's also in developing art styles, characters, and all the setup and tweaking of props like vehicles, guns and interactibles. You spend 60-70%+ of your development budget on the core game. The stories, levels and ancillary characters are the cheap parts. So that being the case, it's suicide to put your game out at a low price point so people can 'try it' before you develop the rest of the content.

For that reason I can't believe that this is EA's intention. The true motive behind this is to get us to digital distribution more quickly. That's a good thing.

Posted:4 years ago

#25

Jason Avent
VP, Studio Head

139 140 1.0
Oh and I don't know why people are complaining about this. If the content isn't worth $10-15 then people won't buy it. So I expect that it'll be good and long enough to warrant that price point.

Posted:4 years ago

#26

Joo Namorado
Project Manager

51 16 0.3
This may also appeal to a (I suspect) rather large number of gamers who don't have the time or the patience to play a full game through to its end but would be glad to buy a shorter version at a more compelling price.

But I share most of the doubts expressed on the previous comments about how this may turn out to be a glorified demo / extra cost if not done right.

Posted:4 years ago

#27

Michael Crivello
Software Engineer

5 0 0.0
Couldn't this run the risk of backfiring badly if the game doesn't end up being all that entertaining? In the case of an over-hyped, AAA game, the publisher is going to sell a certain number of copies just based on the fact that it's a heavily hyped AAA game. If EA takes this "$15 extended demo" route and the game really isn't that good, then you'll end up selling those same number of copies at $10-$15 a pop and a MUCH smaller amount of actual, full-price retail copies. I'm sure this would end up making them much less money in the case of a bad AAA-game.

Posted:4 years ago

#28

Dragos Stanculescu
Technical Director

3 0 0.0
Seems to me quite a few comments are overlooking the amount of money and effort that goes into marketing and launching a A or triple A title (aside from developing it).

For big titles this can be well over the development cost, so yes, deciding not to market and launch a sub-par game can save money for big titles, even if that game is pretty much developed at that point. I do believe it is not the early cash flow that are gunning for as primary target, is the low cost marketing and early feedback.

I do agree that the cost of a PDLC should be redeemable towards the full price purchase though. You need incentives for people to move on to the full product, not the feeling that they have been ripped off for trying to see the game early.

And yes many working class gamers really don't have too much time to play and finish a game nowadays, so the PDLC, if it stands by itself as a fun experience well enough, might be an alternative to purchasing the full game altogether. At least that was my first thought upon reading this :).

Posted:4 years ago

#29

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