Unfortunate news comes out that NCsoft is closing down City of Heroes. The article says 80 employees will be affected. This is (according to the article) happening about a year after the game went free-to-play. I think its important to look at the fact that free-to-play is not some sort of balm you can apply to your game and have it become more popular or make more money.
The sad thing is, that City of Heroes/Villains, was not even considered a bad MMO! It wasn't excellent, but it wasn't a bad game. Their free to play model was interesting in that they had 3 tiers (free tier, one for if you had bought something before, and a VIP monthly membership).
Like Star Wars, end game in City of Heroes was only available to those who were VIP members. Other strange VIP only things were the ability to write in forums, creating super groups (if you were not middle tier you couldn't even join), the ability to talk in all channels (if you were a free tier you couldn't even whisper people, only local and team chat).
So here you have a game where the free model is nothing more than a trial that goes all the way to the end. Fine if you and your friends have communication outside of the game, and if you have no care about doing something at the end of the game.
I think that it wasn't that they went free to play, or that they had a game that wasn't good enough. I'm not even sure about their population numbers or income. (...here...125k active subs in 3rd Q 2008, which meant bringing in $5.3million) What I do know is that executives didn't want it anymore, and that their free-to-play model was poorly executed. I found in the comments of the article linked on top of the page, that they were down to a couple of thousand active players (not sure if they were even VIP or not). I'm not sure of the accuracy of that number though.
With this in mind, keep an eye out for what SWTOR is actually going to be providing free-to-play members. It could be that giving more than they should (the whole story arc) is what makes people play the game and desire to spend money to raid etc.
I hope that all those affected by this land on their feet.
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