This sort of thing happens all the time, but it’s usually less obvious, and less ‘all-at-once’.
People generallhy consider there to be two business growth strategies. I think it was Joel (of joelonsoftware fame) who called them Ben & Jerrys Vs Amazon. Amazon’s strategy was ‘Get Big Fast’. It depended on getting tons of customers, very quickly, and growing, growing, growing. Making a profit was irrelevant, that would come later. Ben & Jerrys was slow sustained growth (like positech!)
It’s also a strategy for building a games portal. If I had the time, and knew the right people, I’d be doing it myself with showmethegames.
Two portals are currently engaged in the mad rush to get customers. One is games for windows live, one is indiedb. Indiedb are doing it cunningly and cleverly with a competition, where you need an account to vote (please vote for GSB!)
Games for windows live are doing it by offering an old game, that they own, for 99% off. People think this is incredible generosity, but it really isn’t. If they could find a way to pay YOU $10 to sign up for an account (assuming you are someone who ever buys games) they would.
This isn’t a bad strategy, or an evil strategy, it’s very good business. It’s also very risky. If you win, in the long term, you become steam / amazon and make hundreds of millions. If you lose, you earn nothing, and you blew $10 million trying to make it work.
I’m too much of a wimp to actually remortgage the house and try it with SMTG. I’ll probably regret that one day :( At least I’m still biz-savvy enough to only include one hyperlink in this post though :D