Just food for thought:
http://www.puppygames.net/blog/?p=1389
An interesting stance on 'demos' in general.
I can't deny a part of me agrees with the argument here.
If the goal of your demo is to create hype and generate sales, this is a read you might be interested in.
i checked into that site. apparently when you click on the download and play now button for one of their games, your download gets you a canned teaser video for the game's intro, followed by a main menu that presents a buy now screen when you click on play. that would definitely make me PO'd if i was potential customer. they're also on steam. the games are only $10 each, or all four for $30. the games are basically 50 level space invader clones and such targeting causal gamers who don't have the time for what i would consider a "real" game (IE skyrim or any big title).
the games in and of themselves may not be big enough to warrant a demo. IE a demo of sufficient size would give too much away, as the majority of the content and gameplay seems to be variations on a theme.
i'm not sure if they formed their option about demos not working (for them at least) based on an actual demo they did in the past, or based on their teaser video and buy now button "demo".
if i were in their shoes, i probably wouldn't do a demo either. the product is familiar enough, the screen shots and descriptions are good enough, and the price point is low enough that the average target consumer would probably be willing to plunk down ten bucks on steam and take a chance on it. they also said steam sales way outstripped demo sales. steam gets them a LOT of exposure, probably more than they could do by any other means. if its just the demo on the website vs steam, its no wonder all their sales are steam. demos are only useful if they are promoted and posted continuously everywhere possible (within reason).
you also have to realize that things like steam are "new" when it comes to selling games. i was a dot com before there was even a world wide web. bandwidth was expensive, "surfing" was done in text mode. video for PC's didn't exist. screenshots, text descriptions, and demos were the only means of marketing online. nowadays, a good product, a link to steam, some nice screenshots, and good sales copy can get you pretty far - don't even need video.
the idea is to have the product pulled through the channel by demand, not pushed through it by you using marketing. so the product should be designed with this in mind. i've discovered that if you build a better mousetrap, the world WILL beat a path to your door - but only if they know about it. I've been lucky enough to do it twice now in my career as a gamedev. those two mousetraps are now my flagship products.
it might be that with the advent of games like oblivion and skyrim, and the new 100% fps/rpg interface in CAVEMAN 3.0, that the product type might be familiar enough now to the buying public that a demo is not required. "ah - i get it, its an open world fps/rpg - with cavemen!" its helpful that game marketers have introduced marketing terms like "open world" and "RPG" and "FPS shooter" to the gaming public. a simple phrase like that can convey a lot of marking info about the general capabilities of a game. That way the consumer has a better idea of what a given game is about.
their point about games being one of the few forms of creative product that offers demos seem to be a good one at first glance, but audio medlies are used to market music cd's, and trailers are used for movies, and excerpts are used for books, so perhaps their argument there is somewhat weak.