1. It's an easy way to charge for new development on platforms that don't have paid upgrades.
2. It can turn be much more profitable as long as you don't just take the price you'd charge for the upgrade and divide by the number of features. Games are leading the way with this business model.
For example, IIRC League of Legends is insanely popular right now. (I want to say it's the biggest game at the moment, but I could be misremembering. Anyway.) It's free to play, but unlike most games, you don't get any permanent characters or upgrades when you start. To unlock a character, you have to buy them. Buying all the characters with money would cost almost a thousand dollars. And if you want to customize your characters so they look cool – well, that can cost several times more. Suffice it to say, Riot Games is doing pretty well for itself by unbundling as much as humanly possible.
2. It can turn be much more profitable as long as you don't just take the price you'd charge for the upgrade and divide by the number of features. Games are leading the way with this business model.
For example, IIRC League of Legends is insanely popular right now. (I want to say it's the biggest game at the moment, but I could be misremembering. Anyway.) It's free to play, but unlike most games, you don't get any permanent characters or upgrades when you start. To unlock a character, you have to buy them. Buying all the characters with money would cost almost a thousand dollars. And if you want to customize your characters so they look cool – well, that can cost several times more. Suffice it to say, Riot Games is doing pretty well for itself by unbundling as much as humanly possible.