This game may also just be suffering from not being interesting enough to convince people to buy. Setting the amount of free content lower may move the 'buy or not' decision earlier, and reduce dropoff, but it's still likely that some percentage of your players just aren't engaged enough to pay after already having played the game for a while.
This particular class of design problem mostly affects games, so it can be kind of strange if you're used to developing software. A good way to think of it is by looking at a program like a ringtone creator or icon editor: Very often, you grab a ringtone creator or icon editor just to create one or two ringtones or one or two icons. After that, you literally never want to use it again (or at best, maybe you want to use it again 6 months later). The group of people who use an app like that every day is vanishingly small. So, if you build one of those apps and you give away a fully-featured version, most downloads will never convert into purchases.
This particular class of design problem mostly affects games, so it can be kind of strange if you're used to developing software. A good way to think of it is by looking at a program like a ringtone creator or icon editor: Very often, you grab a ringtone creator or icon editor just to create one or two ringtones or one or two icons. After that, you literally never want to use it again (or at best, maybe you want to use it again 6 months later). The group of people who use an app like that every day is vanishingly small. So, if you build one of those apps and you give away a fully-featured version, most downloads will never convert into purchases.