Why paid DLC might be the right choice for your PC/console game

[The GameDiscoverCo game discovery newsletter is written by ‘how people find your game’ expert & company founder Simon Carless, and is a regular look at how people discover and buy video games in the 2020s. Welcome to the final ‘summer holiday’ edition!]

So we’re back from holiday, and straight into ‘data and insight’ mode for all you kind GameDiscoverCo readers. We’re kicking off this week on ‘monetizing via DLC’. It’s something that’s quite possible to plan for, and we think it should be an increasing priority for you – no matter what the size of your dev/publisher.

And as we get deep into summer, time for a new discount offer for our Plus paid sub. Join us! We’ve got 22.2% off yearly subs, since it’s 2022. You get extra newsletters, a Steam-centric back-end with stats on your game(s), a member-only Discord & more.

DLC: the concrete advantages of planning for it!

As you may recall, we wrote something in-depth on DLC back in 2020. In this, we said that we thought paid DLC (downloadable content!) for your PC/console title made a lot of sense, as long as:

• Your game launched decently, so has a fair amount of ‘banked’ and ongoing interest to capitalize on.
• You’re not afraid to take advantage of bundling and Steam sales to push one or ideally multiple pieces of ‘high player value’ DLC over time. It needs to be things your audience really wants, and is willing to pay a bit more for.
• You can differentiate your DLC from regular quality of life improvements and patches you’re making to the base game, which you should also continue. (Often, new game areas/reskins are a great thing to put in paid DLC.)

This is a great time to check back in, since we have a concrete example with real data, thanks to the PlayWay-associated Frozen Way company. It publishes the popular House Flipper franchise (>2 million estimated Steam owners) which has four major $10-$15 DLC expansions.

The company recently reported results for House Flipper’s Pets DLC to the Polish stock market, revealing the following stats:

• The DLC sold >150,000 Steam units in the 2 months after its May 12th release.
• The gross Steam revenue for the DLC alone was more than USD $1.7 million.
• The number of refunds of the DLC was only 1,750 – 1.2% of purchased copies. (We heard DLC gets refunded seldom – this is about 1/5th the rate of full games.)
• Bonus, since it’s included: the DLC’s breakdown of Steam sales by country: United States – 32%; Germany – 12%; Great Britain – 8%; China – 4%; Canada – 4%; France – 4%; Turkey – 3%; Australia – 3%; Other countries – 30%.

So you can see this is financially significant. And there’s both a ‘Pets Bundle’ with base game & Pets DLC (45% off at $22), and full ‘Flipper Bundle’ with all expansions (27% off at $58). So the bigger bundles are really helping House Flipper’s yield out.

There’s also the upside of a paid DLC launch in terms of new discovery opportunities. You can repromote, re-pitch to streamers, maybe get an official Steam promotion… it’s a marketing beat in itself.

Springloaded & No More Robots recently saw this with the Dinosaur Island DLC for Let’s Build A Zoo, for example. There are some dinosaur game-only YouTubers (!) who covered it due to the DLC subject:

Anyhow, that’s the theory. But we also wanted to do some ‘napkin math(s)’ to show what would happen if you have a $20 game, and you add sets of $10 DLC every 6 months. What – in theory – is the improved yield over time?

BASE GAME: $19.99 USD + discounts = 1.0x ‘normal revenue’
(We’re just taking the USD price to do this math from, as a straw man.)

1x DLC: BASE GAME: $19.99 USD + ONE $9.99 DLC (6 months after release):
– 7% of existing LTD & ongoing users buy DLC = 1.035x ’normal revenue’
– 20% attach rate for (10% discounted) $30 ‘deluxe version’ during non-sale times = 1.07x normal revenue during non-sales.
– a 35% ‘deluxe version’ attach rate during sales if $20 base version discounted 30%, and $30 deluxe version discounted 40% = 1.085x ‘normal revenue’ during sale times.

ONE DLC TOTAL = existing users buying DLC + pretending an equal mix between sales & non-sale revenue for new users = 1.125x normal ‘base game’ revenue

2x DLC: BASE GAME: $19.99 USD + TWO $9.99 DLC (1 year after release):
– 7% of existing LTD & ongoing users for DLC1 & DLC 2 = 1.07x ‘normal revenue’ + incremental combo DLC sales for another 0.02x = 1.09x ‘normal revenue’
– 20% attach rate for (20% discounted) $40 ‘deluxe version’ during non-sale times = 1.12x ‘normal revenue’ during non-sales.
– and a 35% ‘deluxe version’ attach rate during sales if 20% base version discounted 30%, and $40 deluxe version discounted 40% = 1.25x ‘normal revenue’ during sale times.

TOTAL = existing user upgrade + equal mix between sales & non-sale revenue = 1.275x normal ‘base game’ revenue.

This doesn’t count base game sales uplift from interest around the DLC, and other complex modeling. But the general idea: you’ll make 27.5% more revenue at that point in the game’s lifecycle with two $10 DLC than you would selling the game without it. Decent!

Though remember, it’s not 27% more lifetime revenue, since this uplift starts 6 months after the game launches. (As for lifetime, we’ve heard about PC games with a solid start, lots of DLC & committed player-base that have as much as 25-30% of their lifetime revenue from DLC. But we think it’s way more common to get to 5-15%.)

Getting away from the math, and back to the practicalities, we can think of some reasons why you might not want to do paid DLC:

• If you’re a dev team with a higher monthly ‘burn rate’, it might not make sense, especially if you’re on a publishing deal that isn’t fully recouped (boo!) Paid DLC works best for self-published, smaller teams.
• If you’re an indie publisher who is looking for bigger hits, you may be demotivated to plan DLC for all but the largest titles, because of its incrementality. (It’s not a game changer.)
• And one big thing: if you are a self-published smaller team and you just worked super hard to ship a game, can you get motivated to spend years more simultaneously supporting the base game and making complex new DLC? Burnout is a danger.

But DLC really helps with both long-term monetization and overall interest. For example, we were monitoring Forza Horizon 5’s Hot Wheels DLC for our Plus subscribers in Friday’s paid newsletter, and noted that “the max Steam CCU of the base game doubled from around 8k to 17k after the launch.” A good interest spike!

Of course, if your game is profitable enough, you can keep updating your game forever for ‘free’. And we love that approach, which No Man’s Sky is doing – 20 major free updates and counting! But if you need longer-term extra $ and want to build features that will delight your community & they’re fine with paying for – paid DLC is it!

[We’re GameDiscoverCo, an agency based around one simple issue: how do players find, buy and enjoy your premium PC or console game? We run the newsletter you’re reading, and provide consulting services for publishers, funds, and other smart game industry folks.]