Steinberg’s update policy is as follows:
If you’re a licensed owner of a (let’s say ) C4 version, you can buy (as an existing user) the C5 update for a cheaper price. That’s marketing policy to help existing users to update to the newest versions, by this making a better userbase for the new Cubase (which helps improving it, is important for prestige AND helps that users stick to one program and don’t get tempted to check for other offers for the same price; imagine lots of users/studios would stuck on C4 just because they don’t want to update to C5 because of the full-price, or that users begin to use logic or ProTools just because the update price is the same as buying a new version); at the same time it can also be seen as a kind of politeness to existing users, to offer the update at a cheaper price (though reasons are rudely marketing/strategical).
Notice that you can’t buy the update if you can’t show that you have a license of an older product.
That’s the trade-off for steinberg.
In other words, if you buy an upgrade, you get the full-version, which is installed as a new Version and will reside on your system besides your old versions and the installation programm won’t remove anything (not like an upgrade which overwrites an existing program with newer code).
Because if I understand this right, that’s why an update is less expensive than buying the full version by itself. The update takes the previous version and makes the necessary changes /additions to update it to the next version. Whereas the more expensive stand alone version doesn’t need a previous version to work.
That’s what normally a upgrade does. Updates sometimes require the old version to be removed. In the case of cubase it isn’t. Mainly because Steinberg is aware, that features are sometimes taken away so you wouldn’t be able to open existing projects. So the update is just a naming issue. You get the full-version but, as mentioned, can buy it cheaper as an existing user because of the reasons explained above…
Hope everything’s clear now…