At the GDC Online conference - which is not online, it's in Texas - LoTRO developers Turbine revealed that making the game free has doubled the amount of money they make from it. The game now generates its cash from microtransactions, and optional subscriptions that provide a monthly income of Turbine Points to spend on in-game stuff. It means less money from the average player, but their number of players has exploded by over 400%.
Turbine's previous MMO, Dungeons & Dragons Online, went free-to-play a year ago. The results were similarly spectacular: so many players bought in-game items that they only made slightly less revenue from each of them. And with the biggest barrier to entry removed, sign-ups rocketed. There's a tendency to see going free as a sign of desperation from MMOs that are struggling to compete with World of Warcraft on subscriptions. But in LoTRO's case, it was just logical: DDO had already taught them how much more effective the system is, both in popularity and profitability.(opens in new tab)
Some aspects of microtransactions are rather off-putting: until recently, DDO required you to buy 'leveling sigils' to continue to level up your character, which seems more like a subscription in disguise. But in general, free to play just makes more sense for MMOs. Until last year, we had a ridiculous situation where everyone and their grandmother was asking us for £10 a month to play their game. World of Warcraft's meteoric success had everyone trying to emulate it exactly. But few gamers can afford to subscribe to more than one or two games, so you're asking people to leave the game they're deeply invested in to try yours.
What we're really seeing now is the MMO finally figuring out an effective way to have a demo. You're not likely to lead a long and fulfilling virtual life in LoTRO without ever spending a penny, it's just a much easier way to find out whether you like it before committing. And it scales better to your playing habits: if you end up forgetting about it and playing WoW all the time, you won't be slowly bleeding money into the game you're neglecting.