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Alan Wake 2 will have free and "significant" DLC
(www.eurogamer.net)
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To me, updates and DLC serve different purposes. Updates are for bugfixes, new features, feature enhancements, etc. DLC is new game stuff, like additional characters and levels and so on.
I agree with your interpretation, but I really wish publishers would go back to calling additional levels or story content an "expansion" instead of DLC. It's a lot more clear and differentiates from other types of content like a character costume or a soundtrack.
But everything is content now. sigh