It all comes down to what people will accept in the market and what your goals are as a dev and making those two line up.
FREE WITH DLC:
Having the base game free with paid add-ons seems to be very common now - the entire freemium market is based on the idea of a free but in some way limited version to reel in new players at a large volume. Piecemeal DLC and the freemium model in general drives everyone nuts, of course, but people still go along with it, we had a chance to avoid that model and it turned out to be so profitable on mobile that it spread everywhere and is now the de facto standard (much to the detriment of real playability in many cases). I personally saw the model take shape in the early 2010s and decided NOT to support it - I'd only pay for iAP that offered legitimate content. No wasting real cash on in-game currency, no loot box nonsense. Any game that does this will not get my money. Now - there are cases where I'll sometimes buy DLC, if the price drops low enough to be worth it, as with games like Cities Skylines and Planet Coaster... I figure it'll be worth it and it adds actual features and new elements to the game that genuinely improve it and give it more replay value. [Not just some ridiculous single cosmetic thing or ingame currency that adds zero longer-term value]
But that's my view. I'm clearly out of touch with how most people play games as I see my personal purchases as a form of incentive to the developers to keep making certain types of things and not others - I reward good practices with a buy and avoid supporting bad ones.
Generally, the expected tactic with freemium though is to have a ton of paid addons, iAP that start off with a cheap (99 cents typically) but still valuable addition, just to get players over the psychological hurdle of paying. Once that happens, they may make additional larger purchases more easily later on, spending potentially a very large amount of cash. This is a common practice.
You might make the free version ad-supported and make the 99-cent upgrade to an ad-free version plus some extras... this both is a way to monetize the 'free' players and at the same time adds incentive to make the initial purchase. This too is a widespread tactic.
I'd advise adding actual new content with every buy, new levels, new gameplay functions and elements, not in a way that makes things unbalanced or pay-to-win but... make any purchases worth the money for players.
BIG SINGULAR PAID GAME:
This is the old school format all games used to use. It's pretty self-explanatory. Make a game. One single self-contained thing. Sell it. Key here is to price it at a level that players will pay, but that's about as high as can be solidly justified, and then eventually, later on, offer bigger and bigger sales / discounts to sweep up the players who are not willing to pay the initial price point. That way at least you gain something from them and not nothing. It's an optimization thing... you want every target player to pay as much as they're willing to individually.
BIG PAID GAME WITH DLC LATER:
This is the model that is now common on higher-end systems. It allows the developers to still price 'the AAA game' at $50-60 at initial launch as has been standard for PC video games since the late 1980s, while compensating for the effects of inflation since that time, by tacking on another $50 or more in segments of DLC post-launch. This allows them to make $100+ off a single game. The developers and publishers will argue this is valid due to currency inflation reducing the value of each dollar, dramatic increase in cost of modern gamedev due to a massive ongoing rise in expectations for graphics, and players balking at a singular $100 payment and insisting that a game still must cost below $70 at launch. Players will counter-argue that the gaming audience has exploded in tandem with the cost of game development. This is true, but it's not actually a strong argument when we analyze the numbers.
So in 1993-94 when Myst topped PC game sales charts consistently its original release ultimately sold just over 6.5 million copies (then an unprecedented and record-setting sales number) and had cost about $650,000 to develop, made by a team of seven people.
Now for a comparison, in the modern gaming era, GTA V [for example] released in 2013, cost $265 million to develop, had a team of over a thousand credited developers. but also sold over 130 million copies across all higher-end platforms.
So the cost in developing a higher-end and cutting-edge AAA game, even factoring out inflation, still exploded to roughly 250x higher, a staggering jump, in a span of exactly 20 years. Ultimate sales, meanwhile, of the chart-topping games, of 1993 and 2013, show only a 20-fold increase in sales volume. So it's understandable for modern higher-end games to raise price points well above the traditional $50 or so that was once standard.
But what about indies? There's a lot of data that supports an initial release price between $10 and $25 for most indies. Go higher and most players will balk at the price. Go lower, you're leaving a lot of money on the table. I go lower but then... I'm completely insane.
MY INSANE AND MISGUIDED STRATEGY:
I am frequently bundling a ton of indie titles plus giant batches of gamedev assets together during sales, every one of my assets bundled together for around $1 or so, despite all the market data saying that's a dumb move. I don't care - I know the increase in sales volume will not be remotely sufficient to compensate for the loss of revenue per customer. But my focus is and always has been on the players, and buyers, not so much myself or my well-being as the developer. My personal tendency is to avoid higher pricing and strip everything as low as it can realistically possibly be before I start to LOSE money consistently while making things. I've run shops on eBay and Etsy that combined have now accumulated over 500 sales. I have - for the moment at least, no negative ratings on either. I also have made no profit whatsoever, all factors considered, on either storefront, over seven years. That's after over a thousand hours' work, for essentially $0 net gain. It's gained me a reputation as the guy who refunds or did refund, orders at the drop of a hat, who is insanely generous and overdelivers often, who ultimately takes a loss on roughly 40% of orders and in so doing erases the slim gains made on the other 60%.
Note, this will fail from time to time when a string of people have damaged items in transit and the refunds and costs pile up too high. My losses on eBay in early 2020 were in the hundreds of $, which left me struggling to cover all the other orders that came in the same wave. Some of those items got shipped months late, with effective 150% refunds, extra shipped items that were not requested or ordered, and handwritten apology notes. I've been working pretty damned hard to send $450+ of cash and materials out to a list of people who bought from me in the first third of the year, and new listings have been stalled completely so I can fully resolve all the earlier ones.
I'm now similarly sinking thousands of unpaid hours into game dev, especially an indie title called "Miniature Multiverse" which has cost me not just unpaid time but roughly $1450 that I have largely funded on my own, by doing $3/hr microtasks on mTurk and the like, a few hours/day across a list of different platforms. I work 12-14 hrs. a day in all, much of it on gigs and various things that pay less than half of minimum wage (or rather often, on personal projects which pay me nothing at all) and I'm technically considered 'unemployed' though am not taking actual unemployment from the US govt.
This is normal for me - I have traditionally had a vast depressive and self-destructive streak and a tendency to sabotage myself out of a deep-seated belief that other people are more valuable and more genuinely human than I am. While I'd like to someday make actual money on itch.IO or (somewhere) I don't realistically think it will ever work out and that's okay. I'm at peace with being considered an utter failure.
I don't need to make much - if I earned over $20k for the first time in my life some year in the near future I'd probably just donate everything above the $20k mark.
Because what else would I do - spend it? That's stupid, my workflow doesn't require anywhere near so much cash. I'm completely used to doing everything myself on the cheap!
Save it? That's also astonishingly dumb in a world where the planet is dying, and the US [as well as every other country] is headed for a total and utter collapse over the course of the next 10-20 years. Currency will be worthless. So will stocks, bonds, etc. It's not like this is in any way a secret. Trump fans might deny it and press the accelerator on the economy as it sails over a cliff off of reality, but I know and the data shows that our world economic system and its assumption of ongoing indefinite growth is foundationally untenable on a finite planet where many core resources are now rapidly decreasing in availability. The climate's shifting so fast that I actually would be surprised to see us make it to the late 2020s without a massive 'Great Depression or worse' crash. And that is an optimistic sort of scenario to me - what'd be unacceptable is a nuclear war or mass starvation and a situation in which a bunch of nations implode completely into violent chaos and cease to functionally exist.
I'd rather just make a bit more somehow and keep creating cool things, give away the rest to help people, and when the big crash does hit at some point I will simply accept death at that time rather than sacrifice my ideals just to survive. Survival is dumb. There's no way it's worth surviving what's coming. I'd like to hope there's an afterlife but I've got no real certainty of it. Maybe there is. I don't pretend to know. I do know that even if it isn't real, I still would rather die young on my own terms than live at a great cost to the others around me. I'd rather be remembered as a kind and generous person than be actually still alive and hated/feared because I did what I had to to continue living. Being a good person is important to me. Being rich, happy, or alive a long time, isn't. I know my priorities and they aren't normal. I guess that's just me being pathetic but... really I kind of look forward to my own death. Whether it's some sort of heaven or just not existing anymore. Both sound pretty nice actually.
But that's just me. I'm weird like that. The good news is burnout's no issue here - I won't live to retire, I'm fine with that, so I can just work my ass off for another 15 odd years and then die at the end as I'm running out of steam. Sounds pretty great to me as I actually enjoy a lot of aspects of this work. Would be nice if the work or its revenue I pulled in made some impact on people though. I would especially love it if some of it survived for a while. In retrospect, am totally happy with the Etsy / eBay thing because those items I sold - paintings made and shipped usually for somewhere well under $15, sometimes less than $1 in certain cases - made a TON of people happy. And they, or some of them, might actually still exist after the grid goes down. That's actually a good reason to do plenty of that and not just digital art stuff.
But that's me. You do you. I wish you all the best, hopefully you come up with something great with your gamedev efforts.