Who exactly is going to spend the money, time and energy into making a video game, and then not make a profit? How will they stay in business and pay the employees who developed the game? The whole reason a company make a game is because their is money to be made. It is a business after all, and businesses need to make profits in order to remain in business and be successful. Without the goal of making profits companies would not make games to begin with.
Read what I posted carefully. I didn't say studios wouldn't profit, I didn't say they wouldn't charge for their product. I said they wouldn't charge YOU, the gamer. They will charge the companies giving YOU that game for free (or for a very small, general subscription fee). Miramax doesn't charge you for their movies in Netflix, Netflix merely charges you for the service they are providing you. You don't have to pay a dime for a specific movie, just a service. When cloud gaming comes around, ideally you'll pay your internet, and a service to bring you a very broad set of games to your system (or hell, your TV). You may need a generic device to stream it, but other than that, you don't pay a dime, even if its the new summer blockbuster in gaming.
To suggest that all the gaming companies that are not "Free to Play" are hurting and dying besides CoD is ridiculous
Its not. They are not dying, but they ARE hurting. The era of small rockstar studios died with Ion Storm's demise. You constantly need bigger budgets to produce AAA games, and bigger teams. There are dozens of small game studios, most of which the general public has never heard of, that die every year because they can't keep up. I mean the kinds of studios that make licensed games for movies, for children's games, etc. Your examples are of the extremely few HUGE studios, all of them publishing their own content. These includes Ubisoft, Activision, EA, Zenimax/ Bethesda, Blizzard, Valve. They are the big rockstars of the industry, but everyone else is hurting, and bad. Its an extremely high risk industry.
The Free to Play model has to do with changing the business model, so that people stop feeling like they are wasting 60 bucks. Some companies, EA included, are even experimenting with partially payed demos that last a certain amount of gameplay. If you like it, pay for the rest, if you don't, well... you can't play more.
Here's a small list of studios that died in 2011, some relatively well known, some not so much: http://www.ign.com/articles/2011/12/01/12-game-studios-that-died-in-2011
Since people believe I am talking out of my ass, here is a list of beloved companies that have died, not because their games sucked (well, some did), but because the general business model and industry evolution ate them:
-Atari (THE original one)
-Sega (asa console producer)
-Squaresoft (bad investment, merged with Enix to create Square-Enix)
-Acclaim
-Midway
-Bullfrog Productions
-Eidos Interactive (Again, the old classic one)
-Ensemble Studios (Age of Empires...)
-Factor 5 (Rogue Squadron!!!)
-Fox Interactive (AvP)
-Big Huge Games
-Westwood Studios
-Black Isle Studios (VERY recently revived, apparently)
-Sierra Entertainment
Ah, fuck it. Here's another link: Vancouver is Hurting
Its the big reason why small independent studios are making a comeback. They are making cheaper games with a focus on clever design. Hence Minecraft's success. The reality is, AAA games as they currently exist, rarely offer anything new. Most are either sequels with rehashed gameplay (All of the games you cited, which are not bad BTW, but they aren't new either).
I challenge anyone to beat my wall of text without copy/paste techniques.