These games use different methods of obtaining revenue besides slapping a high sticker price on the game, including in-game advertising, purchasable downloadable content or expansion packs, and fee-based account upgrades or subscription services.
This marketing idea is already firmly entrenched in the Asian online video game markets (the two biggest examples being Korea and Japan), and is now being adopted more readily by game developers in America. Even Disney has jumped on board with the popular Pirates of the Caribbean-based online game, Pirates Online.
One huge factor for the almost meteoric rise in the creation of these games is their ability to reach player demographics that more traditional games have not been able to touch. Parents and players unwilling to pay the high-sticker prices of most video games become more apt to at least sample a 'free-to-play' game.
The games themselves give the players a choice in how they would like to play- they have the option to pay for any extra content, upgrade to a pay-based account or buy the expansion packs, but they can also choose not to and happily keep playing their free game.
Of course, any new marketing strategy has both its pros and cons, and 'free-to-play' games are no exception. Gamers are quick to bemoan the lesser graphics or dearth of customizable settings, but the biggest drawback to games with revenues based on ads or downloads are the fact that they tend to give an unfair advantage to the players that simply have the money to get better items, weapons or characters.
With 'free-to-play' games, players are rewarded for their investment of money, as well as their time and energy. Players who choose not to purchase any of the optional items, weapons or characters will have much more limited gameplay.
Simply put, 'free-to-play' games are not inherently bad or good, they just provide a different way to play. Like anything else, they have their pros and cons, and it is up to the consumer to weigh the options and choose whether or not to play.