F2P (free to play) is a broad category. it can be completely free to finish a game but paying for items like better armor, faster upgrades, etc. for people that hate to grind in a game and want their character to be super faster. F2P could mean that your character's abilities can only reach a certain cap and then to go beyond, you have to pay.
Star War: The Old Republic is an MMO that is going F2P. But they'r still offering the subscription model for those that prefer that.
take a casual game like Farmville. you can completely play it for free. but if you want special items, you pay. it's a way for you to stand out.
and the biggest benefit is, it's hard to imagine spending $60 worth of items. so you end up spending less than full price titles. in fact, Crytek is betting the farm on F2P:http://www.videogamer.com/news/cevat_yerli_on_cryteks_free-to-play_gamble.html
the following are only excerpts (full text, go to link):
Q: Where do you feel Crytek is at the moment? What are the main goals for the company?
As we were developing console games we knew, very clearly, that the future is online and free-to-play. Right now we are in the transitional phase of our company, transitioning from packaged goods games into a entirely free-to-play experience.
What this entails is that our future, all the new games that we're working on, as well new projects, new platforms and technologies, are designed around free-to-play and online, with the highest quality development. When we say free-to-play, we don't believe in a future of low-quality free-to-play, but triple-A quality free-to-play. As evident in Warface, our approach is to ensure the best quality, console game quality, so that implies budgets of between $10m to $30m on each game - so no compromise there - but at the price-point of 0 dollar entry. I think this is a new breed of games that has to happen to change the landscape and be the most gamer-friendly business model.
Q: So does that tie into what you were saying about the need to provide triple-A quality? That without that, people won't bother to play these games?
The Asian market has shown it for many years now: You can have as solid and as big a business in the Eastern world as in the Western world. The revenues and the market size is eclipsing the Western world. If they [developers] can earn money there – in China and Korea and all of Asia – why can't the Western world?
But in 2006, when I was in Korea for the first time, I was blown away by the quality difference. We were like two to three generations ahead, easily, but our business model was five generations behind them. They were much more user-friendly, you know? They were user-friendly in all aspects: They were more social, they were free, they were already super quick and easy in terms of the download and installation process. They already socialised in internet cafes with their friends.
Q: So if this works out for Crytek, you'll be the forefront of a new?
But what we also did is, when we designed Warface, as good as it might be, we [asked ourselves], "Where do we launch it?" We were looking at Facebook – No. Do we launch it on the Xbox or PlayStation? No, no free-to-play, not ready yet. Do we just launch it on a web site? No, for this it would be a bit of a waste! [laughs]
So at the same time we designed this whole platform, what we call the social entertainment platform, GFACE. GFACE is this platform that allows you to do what I saw in Korea: Meet with your friends, virtually, pick the game you want to play, play together in real-time, and then have a discussion on how cool it was, with virtual drinks. The idea is that it's the way you find your friends, get in the game, and hang out after the game. The innovation lies in the fluidity and the simplicity of that process. That's something that neither Facebook nor Xbox nor PlayStation can depict. I wanted to make this a home for triple-A quality games, that are free-to-play, that aren't browser or client based, that aren't mobile or tablet based. It's a unified destination for future gamers.
Q: So will you have games on there that aren't made by Crytek?
CY: Absolutely. It's a completely open platform. We're talking to developers and looking at our launch line-up right now, and the key thing is that they're in mindset of online, social, free-to-play.
Q: Do you see Xbox LIVE and PSN as competitors, then? They work in a different way, but they're still the go-to homes for online gaming, as especially for shooters at the moment?
CY: I don't see them as competitors, because we're not competing on the same turf. Put it this way: If the console manufacturers were offering free-to-play right now, we would be competing with them. But they're not offering free-to-play, so we are doing a future which we believe is the future. I paint the picture that I like to paint – it's that kind of metaphor. As long as I paint the picture that I like, and I'm not copying anybody, I'm not competing them. For me, if I look at Xbox and PlayStation, we are supporting them – we have Crysis 3 running on it – but for a different type of business.
We have been talking to Microsoft and Sony a lot about this. "Go free-to-play! Go free-to-play!" [There was] no movement, so we said, "Ok, we'll do it ourselves, then. I need a home for Warface, and if there's no home, we'll create one". And we've done that.
Q: What is the long-term plan for Warface, then?
CY: Warface is a five-year business plan. There are five years of constant updates, constantly coming out – and it'll always be free-to-play. There will never be a charge for any content. What you do is, you decide what you want to unlock, how fast you want to go. It's not like pay-to-win, or pay-to-get-new-content. You only pay for shortening your time, that's the only and most important rule. And you pay for luxury that doesn't change gameplay. If you want to show off, you want to cut time, that's where you spend money. That's the only thing we do.