Demos were once a standard part of a release and then largely disappeared for years, before returning in a different form. Both movements follow from what a demo costs and what it protects against.
A demo is a separate product
Extracting a self-contained slice of a game requires building an introduction, a stopping point and a version that works without the surrounding structure.
That work falls in the final months, competing directly with fixing the game itself, and it is done by the same people.
Studios facing that trade-off consistently chose the full release, which is the main reason demos became rare.
They can reduce sales as easily as increase them
A demo converts an undecided buyer either way, and for games that build slowly the early hours are the least representative part.
Publishers observed that a weak demo could suppress a title that reviewed well, because the trial reached far more people than the reviews did.
Where marketing could generate interest without exposing the game, that route was safer and cheaper.
Marketing found substitutes
Streamed play, long previews and gameplay footage gave audiences a sense of a game without handing them control.
These are curated, so a publisher can show the strongest sections rather than the opening, which is rarely a game at its best.
For a decade this largely replaced the demo, and the format survived mainly among smaller studios who needed to prove something quickly.
Storefront crowding changed the calculation
The number of games released has grown enormously, and most now compete for attention with no marketing budget at all.
A playable trial is one of the few things that converts a browsing player immediately, and it works without any spending on promotion.
Platforms have supported this by running events built around trials, which gives a demo a specific window in which it can be discovered.
Refunds turned every purchase into a trial
Storefront refund policies mean a player can buy, play briefly and reverse the transaction, which reproduces much of what a demo did.
That removed the argument that demos expose a game unnecessarily, since the exposure now happens regardless of whether one exists.
The demo returning as a deliberate marketing tool is the industry's response to that, since a well-chosen trial section makes a better first impression than an unguided first hour.