Free distribution isnt practical. The money spent on packaging is high enough that you the losses incured would be considerable, especialy for the initial release when the game has consumed millions of dollars in development and seup costs, but hasnt yet produced a cent in revenue. But I agree, charging the same price as a full standard game is ridiculous, especialy for expansion packs when the game is usualy in profit already.
Of course, they could offer the software for download, the costs of that are much lower than boxed copies, although still significant. But the problem for that is how to offer significant content at modern quality, without forcing people to endure a huge download taking hours, even on broadband.
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