In theory, a demo is a very effective advertisement. Your market actually wants to be sold on the game, and you can choose whatever best highlights the final product.
However, a certain degree of honesty is inherent in a demo, something which is entirely absent from pre-launch hype.
With the advent of systems like the PSN and XBL, console gamers have had the opportunity to try before buying. While some people have certainly been convinced to buy a game they'd never heard of, how many people have been convinced to pass on a game that they were excited about.
Some recent PS3 games come to mind - among message board communities, it seems that the Heavenly Sword demo actually reduced anticipation for the final game, and one wonders whether or not Factor 5/Sony is sending entirely the wrong message by refusing to release a Lair demo. Even the Halo 3 beta seemed to elicit more criticism than enthusiasm.
Wouldn't it be a better idea to make like PC developers, who, if I remember from my days as a PC gamer, tend to release demos well after the commercial release of their products?
Doing so would allow developers to cash in on those who are convinced by pre-launch hype while still reaching people who would otherwise have been ignorant or on the fence about the game.
