Before anything, this post does not (and can not) provide enough sources. And considering the legal issues faced by private servers, many of the links included in this post may become broken at any time. However, I have had some experiences on RO private servers and I have looked at several other MMOG-emulator source codes. Although I believe that for some games, there are more people playing on private servers than on the official ones, private servers (hopefully?) do not receive a lot of coverage. In December 2009, the BBC wrote a somehow sensationalist though decently informed article in which they interviewed a few private server players and administrators as well as official MMOG companies.
General facts and numbers
Emulators are simulations of the server side of an MMOG. Private servers launch these emulators to provide free versions of mostly any currently popular MMOG: Aion-emu, eAthena (RO), Arcemu (World of Warcraft), L2J (Lineage 2), Clone Wars (SWG) or EQ2emulator (Everquest 2). Some emulator projects such as Mangos try to teach about large-scale C++ projects and claim
our software is not intended for running public servers, and we do not support that.
In fact, there might be private servers for both P2P and F2P MMOG (although I could not find any emulator (or private server) for Maple Story, Runes of Magic or any gpotato game for instance). It can seem obvious that some players go on private servers to play for free, but there might be other reasons such as particular custom game design choices making the game easier or with less grind.
I personally believe that private servers could be used efficiently to increase the game longevity at no cost for official MMOG companies. As Celia Pearce wrote in book 1 of Communities of Play, some players
even instigated a network of player-run Uru servers to allow players to run the game after its initial closure. Such servers cost nothing, generate more UGC (from better quality) than simple players. This idea is actually close to the notion of abandonware, but with much more players. Playing an old famous game makes potentially players want to know recent games from this company. In an era when Intellectual Properties are golden (see the Final Fantasy, Call of Duty, Fifa, Warcraft, GTA and other Mario series), it may be wise to advertise the most recent sequel of the IP series through the series' former hits. Anyway, whether official MMOG companies want it or not,
it is increasingly unlikely that any company, government, or nation can successfully inhibit the near-term and mid-term societal dispersion of FOSS or the FOSS movements (Walt Scacchi, 2007). Better use or influence it than endure it.
Players and administrators
One may wonder how much money do official MMOG companies such as Blizzard, Gravity or NCSoft loose. This lost is hard to estimate for several reasons. First, neither the number of private-servers nor their number of players are known. Until now, I have not heard of any population estimation. Second, it is not obvious that private-server players would pay anything to play on official servers. Moreover, the hardware and network infrastructures needed to host an illegal server can cost less than a hundred dollar per month for several hundred peak concurrent users. Although some servers rely on a few player donations, most of the time the administrators do not need to rely on a RMT system to keep their server afloat. Hence, most private server players are not likely to be sources of revenues if they were to play on official F2P MMOG servers.
Until now, most of the emulator projects I have seen are the results of a forking from an other open-source emulator project. Usually, there was only one main emulator project set up during the alpha or beta version of the MMOG development. The duration of an emulator project depends on the motivation of the open-source team. Update follow-ups, maintenance (quick and efficient fixing of the bugs reported) and technical support (tutorials, guides) mean a lot to an emulator community. But at the same time, they mean a lot more exposure to legal authorities, and official MMOG companies threats.
To connect to a private server, most of the time, one has to use a slightly altered version of the official game client. The original client can be downloaded from official websites. When the original client is installed, a text file such as Realmlist.wtf for WoW or sclientinfo.xml for RO can be edited to make the game launcher executable connect to the private server. The whole process is really easy, and I do not understand yet why such files stay accessible, cleartext and human-readable at the root of the game folder.
The server-side is, however, fully developed and maintained in open-source projects. At the beginning, original MMOG servers are either reverse-engineered or stolen. That is why I find that depending on the age of the pirated MMOG, the emulator community relies on different pillars. Emulator projects need sneaky and relatively high-level hackers to start. Then more mainstream coders come along and contribute to the project code base. Official updates are reported on forums by people who play on official servers or directly from database websites. Support is given to novice server administrators, and a community can develop and share the products of its creativity (new items, new quests, etc.).