The Irresistible Rise of Downloadable Content in PC games

Those of you who play games on PCs will undoubtedly have come across Steam. It's the biggest digital distributor and provider of DRM in the business - especially when it comes to triple A games (Warning: I work for one of Steam's competitors, Green Man Gaming). Well now it seems that Steam is not going to be publishing any more games from Electronic Arts (EA) - the biggest gorilla on the games block. The two have fallen out over the matter of downloadable content (DLC). Steam, it appears, are not prepared to sell games unless they also sell the DLCs, whereas Electronic Arts plan to sell DLCs from their own site.

DLCs are important for the modern games industry. Let me explain why. In the old days, you would write a game, and sell it. If it sold well you would write a follow up from scratch, and sell that on the enjoyment of the original game, and so on. This works well when you are still massively improving and changing the game engine, as most companies were in the 1990s.

However, rewriting the code is an expensive, and time consuming, business, so nowadays computer games tend to come with a game 'engine' and a bunch of files that are used by the engine to create the actual game you play. Indeed there are a number of excellent engines available as libraries for licensing - you may, for instance, have heard of hard core gamers refer to the 'unreal engine' which powers a number of first person shooters.

Once you have a suitable engine in place it becomes much faster, cheaper and easier to produce follow ups by issuing new scenarios that use the game engine already on the customer's computer as part of the original game installation process. This approach was originally pioneered by strategy game publishers like Paradox and 1C, who also encouraged their players to produce and distribute their own scenarios for strategy games, thereby increasing the depth of play and thus the popularity of their games.

This approach has now penetrated into the mainstream, driven by both the relative cheapness of DLC solution, and the speed to market of DLCs compared to a complete re-write. This means that DLCs have become an increasingly important part of the mainstream , rather than being seen as an optional extra. The Steam/EA dispute revolves around the question of who controls the distribution (increasingly a digital affair) of the DLCs, of which there may be anything up to half a dozen, compared to the single initial game distribution.

So how will this play out? EA games are something like 70% of the digital download market. Steam has a similarly large slice of the digital download market, and their download platform is stable and mature. What the final outcome will be I don't know, but I do know we are about to go through what the Chinese call 'interesting times' in this market in the not too distant future.
http://www.vg247.com/2011/07/12/why-valve-needs-to-come-clean-on-steams-ea-aversion/

Alan Lenton
24 July, 2011

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