Short answers, pulled from the story.
The Dreamcast was the first home console to feature online support as a standard. Its downloadable content was severely limited by narrowband connection speeds and the 200 block limit of the Visual Memory Unit memory card.
The Xbox 360 released in 2005 with its Xbox Live Marketplace. Microsoft believed publishers would benefit by offering small pieces of content at a small cost ranging from $1 to $5 rather than full expansion packs that cost around $20.
Acquiring all the downloadable content for Rock Band cost $5,880.10 as of the 12th of July 2012. This figure highlights the potential for both consumer enthusiasm and financial strain within the music video game genre.
On-disc DLC or PULC refers to data used to enable associated content that is already present within the game's data. This practice is controversial because publishers are accused of using it as a microtransaction to lock access to content that was already contained within the game as sold at retail.
As of 2010 the sale of downloadable content made up around 20% of video games sales. This substantial portion of a developer's profit margin allows developers to fund the development of new IPs or sequels to existing games.