Mass-market pricing

Roller Coaster Tycoon was the best-selling game of 1999, and it came out at $29.95; Who Wants to Be a Millionnaire sold 600,000 copies in a month; Deer Avenger made the top 10.  When a game is inexpensive, it can become an impulse buy, and once the impulse bug has hit a few hundreds of thousands of people, word of mouth takes over.  Frogger's sales doubled from Year 1 to Year 2, and nearly tripled from Year 2 to Year 3.  Yummy.

Low price points also make simpler games economically viable.  Few people would spend $60 on a 100-level puzzle game on CD-ROM, but they will happily shell out $15 four times for the basic 25-level game and three add-on packs.  Selling a piece of an episodic game online at 3-5$ also plays to consumer inertia (who will bother to cancel a $3 subscription?) and may have the additional side effect of making piracy obsolete (who will bother stealing a $3 game?)

Conclusion