I’m glad the US market is finally learning something from Asian MMO’s business model. With piracy being some rampant, you can’t charge for the physical media. If you make it available for free, distribution and production cost of the game go way down. You can set up peer-to-peer torrents to download the game which can save you a lot of the money. You don’t have to worry about serial numbers, authentication, and support issues around serial numbers. Where you can make money is through in-game items and services which you can’t pirate (unless you stupidly use a stolen credit card).

Paiz also shared that 20% of LotRO’s former players have returned to the game since the switchover, and that the game has seen a 300% increase in peak concurrency, with three times the number of players online simultaneously, and a 400% increase in active players total. 53% of players have used the in-game microtransaction store which sells everything from mounts and outfits to XP boosts and character slots, and as you can see above, extra storage slots are extremely popular in the store.

via Lord of the Rings Online doubles revenue since going free-to-play | Joystiq.