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Abstract: "Out of the recent popularity of downloadable contents (DLC) among video game manufac- turers has resurfaced the issue of versioning of informatio n goods. The central idea behind the zero-day DLC strategy is that consumers who find the base v ersion of a game to be suffi- ciently attractive would pay a premium to upgrade by purchas ing such a DLC. In this work, we combine the literature on versioning with that on product sampling to model the impact of consumer learning on the product-line strategy of a game m anufacturer. In doing so, we demonstrate that a manufacturer's desire to vertically diff erentiate could actually stem from a horizontal separation among consumers. When consumers diff er in their perception of the fit between their tastes and the features of the product, horizo ntal differentiation seems a natural choice. However, if the manufacturer is unable to classify p otential consumers into groups with distinct tastes, horizontal differentiation becomes impra ctical. We find that, interestingly, this inability to differentiate horizontally does not limit the m anufacturer from vertically positioning its product line. We characterize the conditions under whic h the DLC strategy is effective and discuss how it affects consumer and social welfare. Our resul ts also have obvious implications in markets for other digital experience goods."