A New Theory of the Offering of Video Game Add-on Products

Matej Zabak & Victor Folke Hansen

Student thesis: Master thesis

Abstract

The video game industry has gone through significant changes since the proliferation of the internet and has gone from selling cardboard boxes to distributing games over the internet. This has spawned an entire sub-genre of add-ons, known as microtransaction and DLC, that can be bought to enhance video games. While these products have been covered by researchers and scholars, none seems to have dived deep into the different types of DLC and how they differ, and how these different types of products have affected the games they are available to. Seeking to correct this, we expand an existing framework on the video game industry by adding another dimension containing DLC products. Using real-life data obtained primarily from the largest online store for PC games, Steam, we analyze how players react to these different types of DLC. We find that surprisingly, it is not the content itself that seems to matter regarding player satisfaction, but the amount of content being offered at a given price point. Furthermore, it appears that large DLC is the most appreciated form of DLC, and that small DLC and loot boxes are negatively received by players. In addition to this analysis, we have surveyed three small Danish video game companies, to understand what their reasoning is in their choice of marketed DLC. None of these companies make large DLC however, and we theorize that the reason for this is the small size of the companies and that only the large studies have the resources to develop large DLC. Using the insights from our analysis, we propose a graphical model that maps the amount of content that is expected of a DLC or game at a given price. From plotting a specific DLC on this graph, it can be seen whether the product is likely to be favorably accepted by players or not. Although unknown factors might skewer our results, we believe that this model is worth further development. However, due to the lack of financial data from game companies, our paper is primarily looking at the subject from the point of view of players and is unable to consider what types of DLC are the most profitable for game companies to develop.

EducationsMSc in Business, Language and Culture, (Graduate Programme) Final ThesisMSc in Strategy, Organization and Leadership, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2021
Number of pages186
SupervisorsJonas Hedman