incentives are tricky and the story is showing what happens when you induce the wrong ones.
They want to have "a free game", a "cheap upgrade" and a "only one upgrade needed". Three things that do not match. If they are going for a free game but that offers the enthusiastic 1% an payed to play upgrade, that upgrade can not be cheap. If they increase to 29.9$, their conversion rate would likely only go from 0.67% to 0.5%, but increasing profits by around 500%.
They want to have "a free game", a "cheap upgrade" and a "only one upgrade needed". Three things that do not match. If they are going for a free game but that offers the enthusiastic 1% an payed to play upgrade, that upgrade can not be cheap. If they increase to 29.9$, their conversion rate would likely only go from 0.67% to 0.5%, but increasing profits by around 500%.