The model you need to work is different from the freemium model, which says you earn money by getting people engaged enough to pay for upgrades. Here you want to make the game cool enough so that players want accessories to advertise their association with it. It sounds like more of an all-or-nothing proposition to me.

I don't think, pace patio11, that the game needs to be blockbusters to generate decent revenue, but you do need your players to feel that they belong to a community of gamers. I have the impression that merchandising generates decent revenues for some B-list webcomics: you might contact some of these to learn about their experiences. Who knows, maybe you can have your game characters appear as guests in their webcomics and vice versa?

I think being a startup has advantages here, since startups are cooler than corporations.