Electronic Arts hopes to hit $1 billion in DLC revenues this year

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If you've ever wondered by major game publishers seem so hung up on post-release downloadable content , consider this your answer: Electronic Arts hopes that revenues from DLC will reach $1 billion this year. That's right, one billion dollars.

Videogame sales at retail don't actually have very good profit margins—that's why GameStop has always been so focused on preowned games, extra warranties and accessories—but it's a different matter entirely when it comes to DLC. Of that $350 million in Madden revenue, $300 million is predicted to come from game sales and $50 million from DLC. But the DLC is particularly important because, as Longbow Research LLC Analyst James Hardiman put it, "The margins on Madden Ultimate Team are through the roof."

That's why the prediction that DLC could reach $1 billion this year is so significant: It represents a growing revenue stream that's far more profitable than conventional game sales. It's also an indication of just how important DLC has become to game publishers; as GamesIndustry pointed out, EA's total digital revenues broke the $1 billion mark in FY2012, whereas this prediction relates solely to extra content. Something to keep in mind the next time you're wondering why Dragon Age: Inquisition is shipping with a loot-focused multiplayer module .

Andy Chalk
Andy Chalk
US News Lead

Andy has been gaming on PCs from the very beginning, starting as a youngster with text adventures and primitive action games on a cassette-based TRS80. From there he graduated to the glory days of Sierra Online adventures and Microprose sims, ran a local BBS, learned how to build PCs, and developed a longstanding love of RPGs, immersive sims, and shooters. He began writing videogame news in 2007 for The Escapist and somehow managed to avoid getting fired until 2014, when he joined the storied ranks of PC Gamer. He covers all aspects of the industry, from new game announcements and patch notes to legal disputes, Twitch beefs, esports, and Henry Cavill. Lots of Henry Cavill.