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2) Go to...
3) Delete the file appinfo.vdf
4) Re-start Steam and try again.
Can anyone confirm that this works and probably won't cause my computer to explode?
Here is the confirmation you requested
Thank you. Confirmation acknowledged.
I would confirm the DLC from Microsoft works with the Steam version of the game. Then I would search the internet for exactly what you want to fix, gradually widening the net until you find something helpful. I would expect basic troubleshooting could include things like; try to verify the game files, uninstall/reinstall the game, restart your computer, disable 3rd party antivirus, and all the other usual stuff we always do to troubleshoot something like this.
Certain games/DLC's require third-party launchers to be 'activated', so that's why you might get that error.
I am assuming that this is the case for Cities Skyline, since it's from Paradox.
Just an FYI for future readers: deleting appinfo.vdf will assist only if that file is corrupt.
I should've mentioned that in 2018 when i posted it.