It is surviving as far as I can tell. Those F2P games also usually have around 100kish players and those players buy crap in the cash shops. Usually they don't start as an F2P, but even if they do, you generally have to buy the game to play it... See GW2 for instance. Text based games don't have the appeal that they used to have 10-20 years ago. Even the free to play MUDs aren't near what they used to be.