To make this analogy more accurate, though, you'd need to allow players to have access to some form of fake money with which they could also purchase back lost pieces, and some means to acquire that fake money during the game. In fact, to make this analogy accurate, you'd need a game that was significantly more detailed and complex than chess. You'd need a game that looked more like, say, a mud perhaps?
Nevertheless, the above-mentioned tournament remains "free to play." The free play may very well not be worth it. I wouldn't consider such a tournament worth bothering with unless I had (a) a lot of money to waste, or (b) some sort of garauntee that none of my opponents intended to purchase lost pieces. I suspect most other people would feel the same way. Similarly, with an IRE style pay-for-perk system, some people may look at their system and decide that since they don't intend to actually spend money, that they'd rather not play in a game where players can gain advantages by doing so. Other players may (and apparently do) look at such a game and decide that they feel that they can compete effectively enough without paying to make the game worth playing. For both type of players, the game is free. The only difference is that for the former type of player, it is not the type of free game they are likely to be interested in playing.
I'll second the thoughts of a previous poster, though. I find it somewhat bizarre that such a basic concept as "free to play" even needs to be explained. This is a concept that most consumers, even those who are mudders, understand. Just like most consumers understand that "free stuff" is paid for somewhere by someone.
As an aside, the freeware and shareware analogy does not hold either. "Freeware" and "shareware" have specific understood meanings that are not interchangeable. "Free" and "pay-for-perks" or "free" and "commercial" are not likewise mutually exclusive. A mud can be commercial and have a pay-for-perk system or some other model for turning a profit, and still be free to play. Believing that such a system is unfair doesn't change the meaning of the word "free," nor does it make a claim of "free to play" any less true than it is.
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