I think this could be a good thing as long as Nintendo and Developers/Publishers don't abuse it by doing things like charging $10 for different character skins, weapons or armor for horses... or armor for any animal in general, honestly.:P - I also think this could be a great way to help slow release periods that they go through from time to time.
Free content will still be an option for any Developers/Publishers that want to use it, DLC is also just another option for them. It seems Nintendo doesn't want Publishers or Developers to feel limited when compared to other services, which could be a good thing as it shows Nintendo is willing to change to get more support.
This isn't the end of free content or full games, it just opens the door for bigger DLC expansions like a new pack of cIassic stages for Super Smash Bros, for example. On the downside, it also opens the door for things like the $10 horse armor I mentioned earlier...
I know that may raise the question of why would they even bother to offer free content when they could make more money. But I think we'll see more cases where it's "Buy our game within the first few months and get all this free content!" then after that whoever doesn't pick the game up will need to download it from the store for $__.99, that's what Nintendo did with Excite Bike. They seem to be doing the same with the Ambassador games and Four Swords Anniversary Edition.
This is Nintendo's current stance on paid download content this generation:
"During a Q&A session at Nintendo's Tokyo earnings briefing on Friday, CEO Satoru Iwata shared some details on Nintendo's plans for digital downloads.
One investor asked Iwata about his thoughts on paid download content. Nintendo is currently preparing a paid item transaction system for both 3DS and Wii U, Iwata revealed. For 3DS, this will be available to developers by the end of the year.
Nintendo may be selective in its use of this system for itself, though. Iwata and Shigeru Miyamoto are interested in the possibility of extending the life of games through added stages and other features that players want. However, Iwata believes that pursuing certain types of low quality paid download content opportunities -- things like unlocking keys or stat increases -- would, while likely increasing short term profits, not allow them to build a long term relationship with customers. Therefor, Nintendo feels that it should not have this type of low quality content for itself.
Iwata also questioned the concept of free-to-play games, where you start playing the game for free and are charged for item purchases. He feels that this type of system would damage the premium value of Nintendo's content. --
Iwata's comments about Nintendo not doing paid download content was in reference to certain types of low quality content. He did not rule out Nintendo releasing paid download content in general, and even expressed interest in this area." - Andriasang.com
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