(this post kind of runs alongside 99% of what McJob said)
You guys ought to read this blog post Creative Assembly wrote regarding day one DLC and DLC in general.I put it in big letters so people won't glance over this and not read it, because honestly it's a very critical insight into why these kinds of things exist. In particular, near the middle of the post.
Context: Creative Assembly is weeks away from releasing their biggest, most expensive Total War game yet, Total War: Warhammer. Most expensive because not only are they doing huge technical work (64-bit, hired AMD to help w/ DX12), they're doing an entire universe of new assets (textures, models, sounds, music, etc.), PLUS it's not even their intellectual property (Warhammer is owned by Games Workshop and both parties made a deal to make a kickass game) so they had to pay for that. The game's coming with 4 of the many races in the setting, humans orks dwarves and vampies, and then Chaos Warriors (arguably the main antagonists) are announced as pre-order bonus/day 1 DLC. CA goes on to explain why it's so in a blog post to the community because they're probably so loving tired of getting yelled at by the community (read: Rome 2 release and its day 1 DLC) and just want their customers to be happy.
tl;dr: People got pissed that one of the main antagonists of Warhammer was made Day 1 DLC, CA does damage control and gives transparency on their side of the story.
Now I'm going to massively oversimplify this, but here's the problem…
A full game’s-worth of development resources (time, money, people) can only support a certain amount of content. In this case it works out as four playable races. There’s so much depth, breadth and variety in them, these races really are a huge investment to make above the factions of previous games.
DLCs also support a certain amount of content, less than a main game of course but big enough to add more playable races, or add extra stuff to existing races in the case of smaller DLCs.
Additionally, DLC's that come out in the first 6 months get even more resources (as they will sell a lot more), and a good value pre-order incentive increases sales of the main game, allowing yet more content to be added into the main game.
And we try and over-deliver; because we’re making the game we want to play.
To release DLC within that 6 months after release, we have to start on it well before the game is finished. It’s outside the scope and budget of the main game, but it’s developed in parallel. We hired a whole extra team to do this because in total it's almost as much work as the original game.
If we were to add this extra content to the main game, we’d be operating at a loss, which we wouldn’t do.
So in TW: Warhammer’s case, we had our four main playable races sorted, and we’ve planned for Chaos to have a big role to play later in the trilogy. But we really wanted Chaos Warriors in the main game, even without DLC – to give a big, bad end of game "boss" enemy Race for all players. But we couldn’t do that within the resources for the main game. So we added it as the pre-order incentive that also gets sold on day one – making Chaos Warriors fully playable but also giving us the extra resources to add them as an Ai race for everyone.
tl;dr above: They're given X money to make X, but to make Y that they really want to do they have to get funding for Y from the publisher and not have it at a loss in order to offset the cost of making it (because no matter how easy you think development is, whether artistic or technical, it still costs money).
"How expensive is development really?? They just want our money!!"
From
http://www.gamasutra.com/view/news/221533/Game_Developer_Salary_Survey_2014_The_results_are_in.php:
In 2013, salaried game developers in the U.S. made an average of $83,060 last year, down 2 percent from the year prior.
...
Business and management: $101,572 // "corporate" of the company, essentially. Executives, managers, HR, PR, etc.
Audio professionals: $95,682 // building your own sound effects and music isn't cheap
Programmers: $93,251 // QUALITY programmers aren't cheap, and in the game industry you need to be quality (check any job listing for a mid-high level developer e.g. Bethesda, CA, etc.)
Artists and animators: $74,349 // art degrees pay off here finally, but mostly 3D/technical art
Producers: $82,286 // moreso of the project managers
Game designers: $73,864 // someone needs to come up with the game, balancing, and more
Quality Assurance: $54,833 // and someone needs to test it
Now imagine there's teams of tens of these workers, plus in many cases the company has tons of nice things to offer their employees like overtime, amenities, retreats, etc. Games are flat out expensive to make period, and publishers (who may or may not know their richard from a screw in a computer case) see games as a huge risk every time unless they absolutely know and trust the developer like a life long friend to make a quality game.
"Why are indie games usually so cheap?"
Non-salaried solo independent game developers made an average of $11,812 (down 49 percent year-on-year) last year, while individual members of an indie team made an average of $50,833 (up 161 percent). (These averages do not take into account indies who made less than $10,000, or over $200,000.)
Probably because they're literally starving (possibly both food and financially) and will take as many customers as they can. If a game is super cheap and seems kinda fun, why not get it right? That's the logic of Steam Sales in a nutshell. Hell I bought Darksiders 2 Deathfinitive Edition just because it was $6.70 on GMG, only because I loved the game + wanted a slightly more polished version to replay with all DLC + wanted to show my support for a bankrupt developer, but I never would have bought it for any more than that (sorry this isn't an indie example but this follows the same principle more or less).
"What risk is there in developing Z for the game?"
That depends ultimately on two things: how important that is to the customers (which is hard to predict in most cases) versus how well you actually make it. For CA this means putting in 200% to their paid DLCs to make them at least worth it for most people. With every paid DLC for TW:W, they've gone above and beyond just making new models, animations, and etc. They add more varied quests and challenges to new factions and etc. to make them different and have a unique playstyle like each of the base game factions already do. On top of that, they also release freeLC here and there and alongside paid DLC. In many people's eyes (at least on /r/totalwar), CA is doing mostly right with their method of making DLC.
Now of course this doesn't speak for every other developer out there. Let's look at EAXIS (modern Maxis, post Simcity 4 because everything after that was loving trash) and their "bundle packs" for the Sims.
Yeah that's pretty stuffty, I agree I'm not gonna lie, but more specifically I think it's stuffty of just how much they've put into Sims 3 and then moved on to Sims 4 anyway, but that's just money whoring. Let's step back and consider the market demographic for the Sims though (and we're only going to talk Sims 3 here, see the last sentence re: Sims 4). In a very general sense and just as a very rough yet semi-educated guess, the type of people mostly playing the Sims are younger players and those who want to do all sorts of cool stuff in the Sims. And of course the developer teams in EAXIS working on these require wage to do their job of making these bundles for customers that want to keep playing the game with new content. So they put a pricetag on that.
It's simple financial in/out. Developers do need money, now maybe the true cost to even-out would be around $10-12 depending on the volume sold of all bundle packs but realistically the publisher wants to maintain a profit if it can, so the price is around $20 which for a kid with an allowance or anyone with a medium-rate income is not that bad of a pricetag depending on how much stuff is in those packs (I'm assuming a fair amount is in those packs, nothing unreasonable). Even more, some of these probably add functionality alongside new assets (pets, seasons, etc.). You could argue that these deserve to be in the main game, but I'll just point you to the part of the post above about getting a finite budget from the publisher and having to make a plan to develop more stuff with an extra cost.
Lots of the big name AAA games that are on a "copy/polish/paste" cycle a la Call of Duty and Battlefield 4, because they know that people will see the super cool dubstep-laced first look trailer for any of those games that all of the customer's friends play and jerk off to and will buy it and buy its DLCs down the road. Hell they know I'm going to be buying Battlefield 1 because all my friends are too and it does look super cool but boy I'll be forgeted if it does suck. My friends and I almost fell into the pitfall of Battlefront until we played the beta and realized how devoid it was of any depth early on.
tl;dr: Software is expensive to make, way more than it was 20 years ago.
