They are introducing massive changes and as in every commercial company there must have been discussions between them to know what features could make people want to drop IC7 and CC3 for this new upgrade. (And not update this is important)
As some of the features that will be included are for me updates (the motion mixer will fix the very common "Mickael Jackson" bug where transition between two standing animations resulted into a "Moonwalk"style feet slide on the ground) others are obviously and undeniably upgrades.
Will this prevent you from using IC7 and CC3 ,of course not.
Do they know that this will create a gap between old gen and next gen users? Of course they do.
A lot of frustrating things are being solved (reach effector for the door and the fact you could now prevent arms to cross a solid when doing a motion had me go running for my credit card) and there will be the animators able to use those new features and those that will not because they will not be able to or will not want to upgrade.
And let's not speak about the huge announcements for CC4. Mixamo and Maya import (hello Auto-Rig features from both solutions) ,non humanoids avatars.....
Same thing there will be the avatar creators that will have access to this and those who won't.
If you use this for fun, you will still have fun with IC7 and CC3 for a long time.
If this is for business, the additional quality of your movies will pay for the upgrade cost in no time.

My biggest gripe with the upgrade fee is that it does not take into account the add-ons that have been previously purchased separately, now they are included with iClone8.
Don't get me wrong, having less add-ons is better overall, specially for new users that feel duped when buying only iClone just to find out that it is really hard to work with without certain add-ons.
However, iClone8 is now far more expensive than iClone7, one can assume this is because previous add-ons are now built in. 3dxchange, motion live and curve editor are now part of iClone8.

iClone7 owners now receive a $50 discount when purchasing iClone8, another $50 for purchasing iClone7.
If you have purchased any of the aforementioned add-ons, you are essentially paying for them again when you purchase iClone8 as they are not optional.

If Reallusion really wants to take care of those of most loyal customers, they would discount the purchase amount for those add-ons that were already paid for or offer some sort of discount for already owning them. Otherwise iClone8 would be better for older users if they had a version stripped of these add-ons prebuilt and allow us to reinstall them to iClone8.

I have spent thousands of dollars over the last couple of years alone on RL products, always upgrading across the board to get the most out of the product suite. Incremental and even large feature updates ship as part of that licensing agreement. At no point was I made aware that when RL decides the features being added are big enough to be considered a new product release that I would have to *buy them all over again.* It's totally unreasonable, and the marketing they are using around the langauge "free upgrade" is almost certainly illegal, both in the US and Europe.

RL create great and useful products, and Indie customers make up the bedrock of their business. This "free upgrade" and exorbitant upgrade cost for existing customers is, for me, intolerable.

I don't know who of you agree, but I feel betrayed.