There are two different kinds of DLC: There's the DLC that adds substantially to the game, like Fallout 3's different DLC packs that add 4-5 hours of gameplay or, I don't know, SPACESHIPS. Then there's DLC like Madden's DLC: Adding in features that always used to be in the game by default, like cheat codes and the like. What kind of DLC should be acceptable and what kind shouldn't?
First of all, DLC has always been around. We called it "expansion packs." Any game worth its salt got an expansion pack, and they were usually optional. You didn't have to get the expansion pack in order to enjoy the full game. You could play the entire story of Jedi Knight without caring whether or not you played Mysteries of the Sith. You could play through Half-Life without needing or caring about Opposing Force, and so on. It was a good arrangement: If you needed more gameplay, it was there for the taking. If you didn't, you didn't. Case closed.
Expansion packs were usually outsourced to a different company. For instance, Diablo's expansion pack, Hellfire, was made by Synergistic Software and Half-Life's expansions were made by Gearbox. These expansions were usually not up to the same quality standards as the originals. In fact, Hellfire made Blizzard so mad that they handled the expansion for Diablo II themselves. Other companies followed suit, and the tide started to change. When the original company handled the expansion, the quality went through the roof. With the quality much improved, the expansions quickly changed from being optional to essential.
For instance, can you imagine trying to play Diablo II without Lord of Destruction? Or what about playing Age of Empires II without The Conquerors, or Starcraft without Brood War? The expansions deepened and improved on many of the concepts of the originals so much that you could no longer live without them. There were other expansions that were just superfluous. I love Alpha Centauri, but Alien Crossfire is unnecessary to enjoy the game, but it sold a few copies anyway.
Now, if you're a company and you have the opportunity to use the same assets you used to build a game in order to make just a tweak or two to your old game AND make more money off of it, you would have to, right? Not so fast. The issue with expansion packs is that you still have to box them and ship them out, one of the largest costs of game development. What's a company to do? There's a chance you might make more money, but there's also a chance that those expansions are going to sit on store shelves and eventually sell for $5. Plus, your game has to have a big enough install base in order to justify an expansion, so you have to make sure your game is selling or at least going to sell before you make expansions for it.
The first shot across the bow of DLC was Elder Scrolls IV's infamous Horse Armor debacle. Instead of making an expansion worth $20, for the low, low price of $2 you could give your horse some armor! At the time, almost everyone was in agreement that we were going down a bad path. "Soon," said the naysayers, "we'll be paying $1 for the ability to level up, $2 per potion, $5 for a sword not made out of cardboard!"
So far, those naysayers have been proven somewhat right and somewhat wrong. For every game that uses DLC right (Fallout 3's excellent expansions) there are some that don't (Madden). What the Horse Armor thing taught us is that people will willingly buy something additional if it's worth it. If I have to pay $2 for something stupid there's no way I'm going to do it, in the same way that those who made expansion packs learned that people won't buy crap expansions. In other words, DLC is good when it's substantial and priced right, bad when it's not. Glad we cleared that up.
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