Just about everyone working in the games biz had heard the heart-warming tale of Ethan Nicholas. He wrote an iPhone game (a tank simulation called iShoot), which duly sank into the soft eiderdown of iTunes obscurity. Then, he improved it. The game sank further. Then he released a free demo of the game. The full-priced version shot to number one, and is currently earning Ethan a tidy $20,000 a day.

The moral of this story is not that writing games can easily make you rich (we're all way too old for fairy-tales) but that giving away games - or at least bits of games - just might add a little swagger to your trip to the bank. Demos make sales.

Free game demos are, in my view, the single most powerful marketing howitzer in the game-maker's arsenal. It bangs, it whizzes and it explodes, (though sometimes, alas, in your face).

Assuming a developer or publisher believes their game is good; there is absolutely no excuse for approaching market without a demo. Such is their power that demos have, for years, actually been a source of profits for some companies, and continue as such today. The trouble is that those profits have been indirect, and have generally not gone to the companies that make the actual demos. Game makers have taken subsequent sales of their full-packaged products as their margin.

Those Magazines

Anyone who has bought an Official Xbox, or PlayStation magazine has paid for a game demo. Likewise, anyone who has ever bought a PC or Amiga magazine with cover-mounted media. The high prices of magazines with cover-media were always rightly justified by the physical cost of the disk or tape or whatnot. They were justified by the consumer because of the amount of entertainment on offer on the disk. Any mag publisher will tell you the difference in sales between a cover disk offering a playable demo, and one offering mere video. Consumers traditionally bought these mags because they knew they'd get a few hours of entertainment as well as the opportunity to actually experience a game before its release. These are hard benefits that go way beyond the demo merely as some sticky sachet of shampoo, taped to the inside of Cosmopolitan.

Likewise, premium subscribers to Xbox Live or to Qore are offered game demos earlier than non-subscribers. This is a benefit they pay for (as with buyers of Official magazines, they get extra benefits too, like editorial content). It gives them entertainment unavailable to the great unwashed and the kudos of having played highly anticipated products.

The publisher of games is not all that interested in the meaty margins of magazine publishers, or the value of demos to consumers. They want to know if a demo can sell their game and, if so, how much value and time they should expend on the exercise.

There is no right answer to those questions. In fact, the debate stretches from those who believe that demos can actually damage sales, to those who believe that demos should be viewed not so much as marketing tools, but as products, with a price tag.

Paid Demos?

Imagine if the next Grand Theft Auto was released episodically; with a $10 level sold online and via game stores lasting perhaps three hours. Then the second episode might come out for the full price, including an option to skip those first few hours.

Such a move would cause outrage among gamers. But how justifiable is this outrage? How is offering $10 of playable content before the release of a game, worse than offering it as an add-on after the release of the game? Of course, anyone who bought the first episode would have paid an extra $10 for, effectively, the same content. But they'd really have paid it for the right to play that content prior to the game's release. They would have always had the option to wait for the full release.

I am, of course, playing devil's advocate. Publishers have looked at just the kind of scenario I describe, but are wary of gouging their most loyal fans. The publicity such a move might attract would be a PR catastrophe and it's wise to be wary of outright greed.

That said, the nature of demos can and will change, and it may be that  the line between demo and full-product blurs into episodic content. Xbox Live, Steam, Wiiware and PSN are vastly more efficient methods of distributing demos than magazines. There is a built-in charging mechanism as well as a direct connection between manufacturer and consumer. The purchase is being made, not in some supermarket or news-agent, but actually at the console, controller in hand. It's perfect.

And as these distribution methods become technically more advanced, demo content can become larger, tempting the publisher into charging for this valuable content (entertainment that the magazine and hardware people have been profiting from for decades).

But this is a trend that will emerge slowly. Nobody is going to try to charge for 20 minutes of a tutorial, especially when the real value in the tutorial is selling a full-price game.

My Civ Hell

I recall playing a demo of Civ 2 on a PC, back in the mind 1990s. It allowed me to build a city, a military unit, a building, maybe I met an enemy, and then it stopped. Since then I've probably spent $200 on Civilization games, including one only a few weeks ago. The demo was so perfectly balanced, so demonstrative of the experience awaiting me, that it's paved the way for 15 years worth of brand loyalty. Print ads, banners and TV commercials are terrifically important marketing tools, but they can never match putting the actual gaming experience into a consumer's hands.

Name the most successful games product of the last few years... Nintendo Wii's entire marketing strategy was based on getting consumers to try the thing, even for just a few moments.

It was amazingly successful, partly because of Nintendo's own confidence in the power of its product. Which is where the power of the demo can sometimes be self-defeating.

If a game is shit, its demo will almost always highlight this fact. Likewise, if a demo gives away too much of a game - if the consumer feels even a cool pinch of ennui in the air, the demo has failed. Demos must offer a fun experience and then take it away at just the right moment. They must be timed perfectly, so that players don't have too long to wait before buying the full product.

For developers, the game demo is a pain in the rear. They are demanded by marketing just at the moment when crunch is at its most severe. They take a great deal of thought and skill. This is why developers have, in recent years, become much more skillful about building the demo into their schedule.

As Ethan Nicholas has discovered - now that he's quit his boring job and is pursuing a career as a game developer - giving away entertainment can make all the difference.