Gamers who are old enough to remember the PC experience before AOL brought dial-up internet access into everyone's homes will probably also remember shareware. My family had dozens of these discs and, later, CD-ROMS over the years. Each one promised HUNDREDS! OF! GAMES! and while most were simply trashy clones of some other game, or endless iterations on Solitaire and Mahjong, a few were something else entirely. They were first chapters of adventure games or RPGs, beginnings of stories that the player, once hooked, would need to pony up more cash to finish. Anyone could pass around the installers and the limited-access game, but it would take a new disk, with the full version, to see the rest.
It was the era of shareware. And in all the hundreds of games that came to our family computer from $1.99 CDs or discs swapped with friends, I only ever paid for one. Exactly one.
(For the curious, it was Castle of the Winds, published by what was then Epic MegaGames, and I have never regretted a cent of that $19.99.)
Players who were not consuming PC games at a rapid pace during the halcyon 1990s may still find this model hauntingly familiar. How many games can we now download or log in to for free, onto our consoles, phones, and computers, then play for a while for free before running into some kind of wall? Sometimes it's as immutable as when I needed to put an actual check in the physical mail in order to have Epic send me a floppy disk with the rest of my game on it. Usually these days, though, it's more gentle. A free-to-play game will demand either money or time, but will let the player choose how to mix and match the two.
In an article at Gamasutra, Tadhg Kelly argues that the choice and flexibility that a functional free-to-play game offers is what sets the freemium era apart from the shareware era. At least, for successful games.
I was perhaps more unusual in ever paying for the rest of a shareware game than I was in only wanting one. For games that ask players to convert from fully free to fully paid, Kelly points out, the conversion rate is usually 1% - 2%. In order to make money, a game will need to make players want to come back, again and again, with microtransactions:
Repeat business is what makes freemium business models work. You go free to play in order to expose the core of the game to lots people in the hope of turning some of them into customers, and then you sell them something. And then something else. And something else. Once they buy one virtual item, they may buy two. Once they score one set of virtual currency, they will not think it bad to have another.
The game that asks for small amounts of cash repeatedly, or at least regularly and strongly encourages the player to pull out a credit card, has developed a bad reputation. And yet, Kelly points out, "You don't have to be evil to sell multiple items to a customer who likes you." Instead of asking us, "Would you like to buy the rest of our game now, pretty please?" it seems that developers in the free-to-play space instead need to think more like other kinds of businesses. Players are in the door already, and, "would you like fries with that?" is a much easier question to get a "yes" to than, "would you come inside this restaurant now, please?"
Opinion: Freemium is not shareware [Gamasutra]