Something that makes that you are put only in novice matches and as soon as any class hits level 8 you have to pay for the full game.
Why level 8?
Because if you get that far to come out of novicehood you must have some interest in the game.
Does it hinder incomes by taking away the money that you get from the people that buy the game only to try it for just a couple of matches?
Unfortunately, yes, and the devs would gladly keep that and every income.
Does it function really as a paywall?
Well, I dare to say yes, as it would restrict the lite-users to only three ships and some pre-made loadouts. Also, making that the characters have only the default aspect could simply be another addition to the lite edition. You could also make so that you could claim your level-up rewards only if you buy the full game.
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I personally find the f2p idea extremely abhorrent. Not only it would demolish Muse's income, but it would also hinder the quality of the GOIO community, that I love as it is.
Free to play games 98 times out of 10 attract the scum of the Internet, especially in those where skill is required, and the communication system is well functioning.
(Exempli gratia: DotA and LoL)
(P.s. Yes, mobas take skill, a noob will always suck if they don't acquire skills)
Also f2ps are the breeding nest of trolls. Yeah, people who like to go full mine launchers are quite the trolls, but they could be also extremely dangerous opponents. Trolls that act dumb on purpose, gunning as engineer while the ship critically needs repairs, damaging guns with Lochnagars without even aiming at an enemy, captaining an extremely useless ship only to purposely piss off their own crew, etc...
To sum up: F2P isn't and probably will never be healthy for the community, if you want to increase the playerbase, then find a way to publicize it.