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I don't think DLC will ever replace physical copies of software due to the fact at how large some games are getting. A lot of ps3 exclusives are starting to use dual layered Blu Rays, and many of the others take up a good portion of the single layer. Even multiplatform developers like Rock Star said they've used the DVD9 to its limit and that their games aren't getting any smaller. RPG's taking up multiple DVD's are also an example of this. Let's be honest - you're not going to download a 30GB file. Maybe one day you might, but not in the near future.
But mostly, I, too, like having that new game smell, being able to enjoy the manual, and have a box take its rightful place on a shelf/desk amongst its peers. Collector's Editions as well are starting to be a really big hit, more than ever.
DLC is also controversial in that the community of gaming publishers have caught it like a bug, and are now overloading the consumer with superfluous downloads and add-ons. I personally hope this passes soon and we are left with the majority being DLC with more substance and meaning.
However, it's great for things like Battlefield 1943. It's a great online experience, better than most retail games I dare say, and it comes at an affordable price. Of course, DLC is going to be the mainstay of smaller downloadable retro and niche games for some time to come.
Consoles and console games typically have been playing catch-up to what PC's have been doing over the last 15 or so years, and DLC, to me, is the way of them doing so with the expansion pack. That's welcome, but of course I'd rather get a great expansion to a game I own for $15 or $20 instead of 2 maps for $5, a character skin for $1.99, etc.
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IMHO the obvious "its on the disc but we'll let you get some DLC for 1.99 what'll unlock this" DLC stuff out there (SFIV cough cough) needs to go or atleast have some way of unlocking it on the disc itself without paying it doesn't matter if it's something ridiculous like "clock up 100+ hours fighting as Ryu" or something stupid like that, for hardcore fans of the series they'll unlock it for not so hardcore but must have everything completionists they'll be able to just pay for it and everyone is happy. Thats better than annoying the hell out of the fans by charging for stupid things like that.
Still even PC games these days are going the way of DLC instead of multiple discs for games like sims 3 you get 1 dvd and that'll install a "lite" version of sims 3 but to get everything you need to be online when installing it so it can download massive cabinet files to your comp. I can understand in some regards, games are getting bigger and better all the damn time, FFVII was benchmarking with 3 CD's full of data, FFVIII moved it again with 4 CDs worth of data, Lost Odessy (360 also square lol) moved console gaming forwards with 2 DVDs of data. PC gaming would have gotten up to around 6 discs by now if companies hadn't started taking advantage of the DLC idea. Still, on the other hand if someone lives where they for whatever reason cannot get internet access and yet loves playing PC games why should they suffer having "Lite" versions of games to play instead of the full version?
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