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Is a fighting game with only 1 fighter really a game?
You get more fighters on a demo.
Only way this can be a win is if additional characters are $2 or less.
Only way
In a demo, you get two characters and one stage.In this you get one character and the entire game

Additional characters, lets say there are 20 characters. I guess they wouldn't offer Character Packs like they do now

Games will ultimately be cheaper. Since its free, most gamers will try it.
If they like it, they'll buy more characters. Some people will buy all of them, others will buy 2/3characters. But now they dealing with the entire userbase instead of the lets say 1million people who normally would buy the game.
In the long run, they'll make more because they'll have more clientele total
Its business. A business model that is successful on PC's. World of Warcraft is the most popular game on the planet. Its Always online, basically works just like all this
(You don't see PC heads complaining, in fact they keep trying to recruit niqqaz)

them mafukkas is $20+ a fukking hero 


with the rest of the og's you would realize people been on this site for 10+years.... nikkas was 17 now they pushing 30 with familes.
Thats microsoft, and their exclusives. Imagine if they were the only console on the market.