Many gamers seem to get upset by the high costs to video game add-ons put out by developers on the Xbox 360 Marketplace. Developers and publishers, however, are anything but upset!
With add-on map packs running USD $10.00 and other content arriving monthly, you can easily be investing $80.00 to $100.00 for a single game. Once upon a time, publishers kept their games alive in the market by pushing out free content, maps and other re-invigorating patches for PC gamers. Now, they're realizing gamers will pay for the stuff they used to get for free!
But how much will they pay before they start complaining about the cost? That is still unclear.
Who else profits? Microsoft of course!
The proof is in the profit...
(Thanks, reuters)
But how much will they pay before they start complaining about the cost? That is still unclear.
"The (downloadable maps) are very profitable for us," said Tony Key, vice president of marketing for UbiSoft Entertainment SA"He goes on to say that roughly 10% of their development staff has to be involved with downloadable content. In that case, we're talking about a good deal of profit for the add-ons. If 100% of the team put out a USD $59.99 game and 10% of the team can put out an add-on for $10.00 you can clearly see some nice profit margins.
Who else profits? Microsoft of course!
Wedbush Morgan analyst Michael Pachter estimates Microsoft charges a royalty rate of 30 percent for most downloads. That means that, for a $10 download, Microsoft gets $3, while the publisher pockets $7.Microsoft and other publishers are now looking to sell you a title so you become a long standing member that may "invest" more money into add-ons. The game still has to be of good quality, nobody is going to buy add-ons for a game that's crap, but there is a delicate balance. Gamers will not tolerate half-completed games for full price to be pressured into DLC so they have a "full game."
The proof is in the profit...
Third-quarter revenue at the entertainment and devices division dropped 18.7 percent to $947 million, with an operating loss of $330 million, compared with a loss of $438 million a year earlier. Microsoft shipped 500,000 Xbox 360 consoles during the quarter.
(Thanks, reuters)
