Why "Milking" Gamers With DLC Is Dangerous, According to Take-Two

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DLC sales, whether it be in the form of virtual currency or significant expansion packs, is now a meaningful component of Grand Theft Auto parent publisher Take-Two Interactive's business. But the success didn't happen by accident. The reason why Take-Two, which essentially pioneered DLC with Grand Theft Auto IV's expansions in 2009, has been so successful in this area is because it doesn't "milk" gamers with new content, but instead offers them something they find to be of real value.
That's according to Take-Two president Karl Slatoff, who this week outlined his vision for why what he calls "recurrent consumer spending" will likely play a major role in the company's future.
"I think the difference right now is that we're recognizing that this is a significant strategic asset for us to keep our consumer engaged with our franchises in between our major releases," Slatoff said during the BMO Capital Markets Technology and Digital Media Conference. "And it also affords the opportunity not only to be engaged with the product, that's always good to keep the game in somebody's hands and keep people excited about the franchise, but also giving us the opportunity to make more money from the consumer."
"But the most important thing for us is that the consumer can't feel that they're just being milked at every turn," he added. "The key factor to success with recurrent consumer spending is to provide consumers with incremental content that they value. And that's the core of our strategy behind our recurrent consumer spending. It's to provide them with deep content in the initial release, that keeps them engaged--that creates opportunities. And it's to offer them additional content that they find to be very meaningful and are very happy to pay for if the opportunity arises."

"The most important thing for us is that the consumer can't feel that they're just being milked at every turn" -- Karl Slatoff

In addition to paid offerings, Slatoff says it's important to deliver free content to all players, something Rockstar Games has done and continues to do with Grand Theft Auto Online, the multiplayer mode for Grand Theft Auto V.
Finally, Slatoff said it's his hope that all future Take-Two titles, which would include any future GTA games and the long-rumored Red Dead Redemption 2, will feature online avenues for sales beyond the initial purchase.


"I would like to say that every release at one point in the future that we've got some sort of recurrent consumer spending strategy around every single release," Slatoff explained. "I can't say that today, but we're getting there."
Around 70 percent of people who have played GTA V have connected to GTA Online. And while official sales numbers have not been disclosed, Take-Two says GTA Online is the gift that keeps on giving as it relates to the money the company makes from it.
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