DLC just means (reversing the acronym, I guess) CONTENT that you can DOWNLOAD. It really is more of a DIGITAL thing than anything else it has come to mean. The term can ONLY EXACTLY mean that it is stuff for your existing program (i.e. 'content') that you can add to your system digitally, either from a network connection or from media (i.e. 'download' which, despite how the vernacular tends to use it, only means to bring a file from somewhere else onto your system and does NOT require a network connection of ANY kind)
In practice, it was coined to refer to getting your additional game content from a network, usually the internet (via WWW or proprietary services like XBOX Live.) It has a tendency to be linked to micro-transactions, and/or to free-to-play models, but those are not 'every and only' defining qualities.
Any further definition BEYOND 'content (for an existing program) that you can load onto your system' is, at best, situational, and typically (at worst) a matter of opinion.
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As for 'expansion', again, all that the term REALLY means is ADDING to something, specifically in reference to game software it CONTINUES ON or INTEGRATES INTO an existing game software. The term was coined to differentiate from sequels, and largely meant to let you know that you almost always need the primary game for the expansion to work (this is NOT always the case, but in those murky, mushy situations it is almost always equally right to call the 'expansion' in question by another term like 'sequel' or 'part of the series' or some such.)
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Why is Harebrained Schemes calling Berlin an 'expansion' and not just DLC (as it will, CLEARLY, be DLC regardless) going forward? Well, from the early days of the ongoing Kickstarter campaign, they called the Berlin DLC "campaign" quite a bit. Once Berlin won as the next city, it kept being called "the Berlin campaign" all the time.
The decision to make it bigger was HERE -
http://www.kickstarter.com/projects/1613260297/shadowrun-returns/posts/571966 - on August 16th.
"We've heard a lot of questions from you wondering what to expect from Berlin. Well, our original plan called for a modest-sized campaign that we could ship by the end of October. However, after listening to your forum discussions and feedback, it became clear that you would like to see something bigger (and so would we). So, we've decided to spend more time on Berlin to create an experience closer to the size of Dead Man’s Switch. A story of that scope will take longer, so we’re targeting January for its release. While we're still in the early stages of development and many things could change, we’d like to share what we’re planning so far. For example - we know that we want our next story to feel more like the player is part of a shadowrunning crew and contain more corporate intrigue."
Of the list of ideas they give about increasing the size of the campaign, they never included "changing the save system."
Why did they stop referring to it just as DLC or campaign and now call it an expansion? It's not a continuation of the campaign from SRR, but you need SRR to run it and they increased it's size and scope. So I'd say that since it requires the original game and is 'large' (relatively - though not as big nor bigger than the original campaign, it is bigger than they initially intended AND will be close in size), expansion was the term they went with as it seems like what would have been typically called expansions in the past.
DLC and expansion, if you used a logic diagram, would have overlapping inclusion circles, groups that had crossover but each could exist outside the other (unless you go with my looser definition of DLC and take download software from a disk to still count as DLC, which I would suggest is probably not the right way to go.) Calling Dragonfall an 'expansion' doesn't stop it from being 'DLC' nor does it have ANYTHING to do with a feature change to the save system which will, retroactively, work with the original campaign as well.
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