Cliffski's Blog - The psychological value of ownership, and how free to play games use it.
Free to play works because it doesn’t ask you to value the game until you already feel you own it. How much would you pay for farmville to buy it outright? maybe $5? But play the game for free for a month, build up your farm, invest it, and then hit a plateau in the game where you really need to buy coins to continue…. and suddenly YOUR game is worth a lot more than $5. You value the game you already own very highly, and so buying add-ons for it is just common sense. I suspect this is why DLC works so well, and sells so well. You have already made a commitment to valuing the game, by investing your time. Only a fool could try to rationalize NOT spending money on it now…