EA Creates More Options with Downloadable Content

Many media formats have active used markets. Visit any college campus during the first week of classes and you'll find a used textbook swap. Amazon has created an active marketplace for pre-owned hardcovers and paperbacks.

The videogame industry is no different with retail chain GameStop leading the way as market maker. Wall Street analysts estimate the size of the second-hand market to be $2 billion a year and accounting for 1/3 of the games sold in the U.S.

Leading game publisher Electronic Arts (EA) is rolling out a program to try and recapture some of that lost revenue. Included inside new copies of their games is a one-time code which unlocks new characters, weapons, and gaming levels. Anyone who buys the game on the used market will pay money (currently $3-$10) to gain access to this additional downloadable content (DLC). These codes act as both reward to purchases of new product and new revenue source from the secondary market.

DLC is growing source of additional revenue for software companies. EA is going to offer Tiger Woods Golf for free online with club upgrades available at a cost. Hipstamatic, a camera application for the iPhone, allows customers to buy lens, film, and flashes to creates a variety of vintage effects. Social gaming sites for kids like Club Penguin and Moshi Monsters use a philosophy of free membership with additional features added with a paid subscription.

So, the question is: what's your downloadable content that could create another revenue stream and give you more options?

"You Have Options" is the final section of the ebook Free to Flexible: Four Simple Lessons About Cost, Price, Margin and The Options Available to The 21st Century Business. You can download it here.

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