Cash Shop Games (Which are usually free to play) are a huge business model purely because you entice your fan base onto your game...get them hooked...then reel them in. It's very simple.
One of the reasons that I never got into World of Warcraft was the fact I had to pay up front for a game I potentially wouldn't play enough to be able to validate the amount of money spent each month...same with EVE Online and a few others...yet on games like Forsaken World, War of The Immortals, Battle of The Immortals, Tera...and more...I was able to get into the game BEFORE handing over any cash...and because I was lazy and impatient...I headed over to the cash shop...took out my credit card..and spent some money.
I didn't really mind spending the money purely because...well...those people have to eat as well! They don't charge for their game...they don't throw advertising into it...so where the hell else would they make their money?
Plenty of games publishers noticed a HUGE increase in profit when they moved away from Pay2Play to Free2Play (Cash Shop) mode...it's a simple matter of math........Go Pay2Play and attract maybe 10% of people who would otherwise want to play you game (For whatever reason...maybe they can't afford $10 EVERY month....or maybe they just don't WANT to pay that)...yet..go Free2Play...attract the other 90...the 10% who paid will then spend that money on cash shop items because they are used to paying you...and even if only 45% of the 90% remainding actually spend money...the developer is already earning more...the more people that play, the more people know about their game...word of mouth gets out...youtube videos get uploaded, more people register and login, which means more people spending money...even if they only spend $15 ONCE...that is $15 they otherwise would never have got...pretty simple to figure out which is the better option really