Yes that's true - in fact there are multiple strategies that can be employed when monetising an app, neatly summarised in this TechCrunch article: http://techcrunch.com/2012/08/26/how-free-apps-can-make-more...

The author seems bothered by the multitude of negative reviews and support requests generated by a cheap app. Not all of these are bad - in fact they are real-world user tests and are useful for debugging and improving the app.

I propose having a free version for those who want to try out the app, with a caveat that users who need better support and more frequent upgrades should try out the paid app instead.

That's a nice proposal but the reality is, those who get the app for free will be more likely to request support than those who pay for it.

Apparently games with demos sell worse — seeing half the sales of their non-demo counterparts.

http://www.eurogamer.net/articles/2013-02-11-games-without-d...

(Though it only looks at xbox 360 games)

Those kind of statistics are useless. They lack any kind of control whatsoever. For example, it's very easy to imagine that a company that knows its game is not telling a compelling story might be tempted to make a demo to try to get people into it, whereas a company with confidence in its brand might not. Who knows, the demo might be doubling sales in those otherwise no-hoper games.

You could just as easily rewrite the conclusion to be "companies who knows their game is crap often choose to make a demo". Without a more sophisticated statistical analysis, it's every bit as valid.

I'm not going to comment on the quality of the article. It's certainly not exhaustive research and is only a small insight into some sales numbers. But it does make a kind of intuitive sense.

Personally, if I play a game and see how its core game mechanics work then I am much less likely to purchase it.

A lot of my game purchases are impulsive — I see something cool in the trailer and want to try it. Once I've tried it I lose interest. Demos give me the opportunity to lose interest without purchasing the game.

When I know I really want to play a game all the way through I will always purchase it without trying the demo (if available). So in my limited gaming experience demos have never been a step to a sale.

I generally avoid buying games for the same reason. Few really advertise their core mechanics, and even the ones that do, I have no way to trust them on how well executed they are. For cheap games, I am willing to take the risk because even if the game is 'bad' I will still generally come out with a decent $/hr ratio. But the only times I get 'expansive' games are if I have seen a lot of people play it to the point where I have a good sense of how it works. Most games do not have a large enough network effect to get to that point.

What would be a good control for this then?

Dev budget? Marketing budget? Purchases by people who don't ever play demos? Purchases in areas the demo wasn't available? Analysis of whether studios always do demos, or only for certain games? Weighting by external review scores?

Any number of things you could take into account.

This is explicitly about the product, a good game will sell with demo even more and a not good one (majority of the games nowadays) will sell the hype.

You can see this in practice by watching MMOs after the first month many of them will lose tons of customers because now everyone knows the game is bad and not living to the hype.

Whereabouts you can see good ones such as WoW (or even Diablo 3) which will keep adding more users.

This is very interesting. More research should be done. It may be the case that for high-profile games - which are almost guaranteed to sell well - demos are not needed.

And the article also states that marketing budgets are not taken into account in the research. High-profile games are marketed more widely, and don't need demos, leading to the result that games without demos sell better.

Games - sure, but it's a totally different ball game compared to the utility software. Don't know about Xbox, but in the Playstation store way too many demos come with a couple of hours worth of gameplay and for others 2 minutes of play time is frequently enough to realize that the game is not very good (even though the screenshots looked good).