Two restaurants on the same street. One ran half-price Tuesdays and Thursdays. The other threw in a free soft drink on the same days. Same pizza, no discount, just a Coke.
During the promotion the discount shop pulled ahead. Revenue spiked. Management felt good about their numbers.
Then both of them stopped.
The free-drink place ticked up. The discount place collapsed — because the customers who had been buying five-dollar pizzas were not about to pay ten for the same pizza the following week. The price had changed in their heads. Permanently. The only route back to the old revenue was another sale.
A discount doesn't write down the discounted item. It writes down everything you sell.
Why free-to-play learned it faster
Marketing researchers call that number the reference price, and once it drops it does not come back up. The research is decades old and has been replicated many times. Free-to-play learned the same lesson at internet speed, with millions of players and dashboards updating by the hour.
So the second law in the book is blunt: never cut a price. Anywhere. Ever.
The only safe promotion is a bonus — more currency for the same price, more of the item for the same price. Extra value in, sticker price untouched. The economists have a clean way of putting it: discount if you are competing on price, and you are not. Nobody ever chose a free game because it was cheap.