Perhaps "loss leading" was the wrong term on my part. A more accurate description for what I was trying to get at would be expecting to break even or turn a sma

Perhaps "loss leading" was the wrong term on my part. A more accurate description for what I was trying to get at would be expecting to break even or turn a small profit on the first game, then converting that game's base to a higher-margin second game. That being said, I don't think loss leading, in and of itself, is out of the question for a small developer. There are periods of time during which dropping your price to free can drive a significant boost in trial. This is a valid promotional strategy, assuming it's used sparingly and strategically enough that it doesn't piss off the userbase who paid for the game.