DLC for GTAIV: A Bad Idea?
Pachter has crunched some numbers on Grand Theft Auto’s downloadable content and found them wanting:
"We estimate that around 7 million copies of the GTA IV disc (required for the download) were sold on the Xbox 360, and believe that no more than 5 million of these were sold to members of Microsoft’s Xbox Live service," said Pachter to Gamasutra.
If the market for the expansions is only five million users and the episodes are priced at $20 per download, then Take-Two could at max earn $100 million in revenue from one episode or $200 million from both of the packs to be released in 2009.
That number doesn’t sound so bad, but as Pachter points out, "the addressable market for the downloads is less than half the addressable market for the game itself." Cutting those numbers in half and you have maximum revenue potential somewhere between $50 and $100 million, assuming everyone who could download the content would.
There’s some more number crunching in the article itself, but the short version is the audience isn’t large enough to effectively support the cost of development.
That seems incredibly short-sighted to me.
A lot of the strength of the GTA series has always been built around the perception of the game by its audience. Cool, forward thinking, and cutting edge are clearly all words that describe the franchise. Even if they’re just building out the content as R&D, as well as a way to maintain the game’s presence in the marketplace it makes a lot of sense to me.
Something that seems expensive in production may still end up being cost-effective marketing in the long run.
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