Earlier quoted context omitted.
1% is not totally unreasonable. See belorns post about conversion rates in freemium games for an explanation.
Comparing freemium game conversion to Triple AAA piracy is ludicrous, and the argument that a freemium game should convert more because its designed to convert people is the most textbook definition of a specious argument I've ever seen. Successful Free-to-Play games like League of legends are suspected to convert greater than 10 percent of players to paying customers. Of the millions of players who pirated Bioshock…
If we couldn't pirate something, we just didn't ever end up playing. It seems like the amount of money any one person will spend on games/gaming is very stable. So what game devs are really trying to do is to be a part of each of their customers game-spending pie. I know that's how it is for me and the people I interact with.