I can tell you in a nutshell why several thousand people play emulated servers instead of EQ- despite the fact that EQ is free.
First, to much of the emu audience, the "free" part isn't even a factor. Let's start with the fact that most people playing emu servers are playing P99. Most people playing P99 could probably afford, and would gladly pay, $15 per month to play. The fact that emu servers are free is just a bonus. Take me for example. I would pay $15 per month to play a server like p99 but I wouldn't play EQ if they paidme$15 per month- EQ is simply not worth my time the way it is now.
Second, and more important, emu servers offer things that EQ doesn't. This seems so obvious that I'm surprised you even asked the question in the first place. For example,you simply cannot get the Vanilla to Velious experience with EQ Live now. Period. Not through SOE's half-assed attempts at progression servers or through any other non-emu means. Let's take a look at just a few of the emu servers for examples of other things you can't get with EQ Live:
P99- The server isn't perfect and there are concerns about "customer service" issues, but for the most part, Rogean and the guys did an amazing job recreating the Vanilla and Kunark experience (with Velious soon to follow). Again, SOE simply doesn't have anything similar to this experience.
SoD- While this server isn't truly "EQ", they have done outstanding things with EQ's assets. The level of talent the SoD team has is scary. They have solved problems that have plagued EQ Live and other emus for years through ingenious mechanics and innovative ideas. What they have done with character advancement/progression, NPC AI, itemization, grouping mechanics, and raid mechanics (just to name a few things) is undeniably impressive. Add to those things interesting story and lore, and you can see how they have managed to maintain a steady population of a few hundred donating playing foryearsnow.
EZ Server- As someone already mentioned, the guys at EZ server did a great job at letting you experience EQ at very high levels, but still manage to challenge you.
Guildwars- It's been a few years since Image/Devnoob have run a Guildwars server, but in the old days this was the best emu server hands down for me. They managed to create some pretty awesome pvp mechanics that included pvp points for kills, purchasable items for pvp points, and territory (like cities, camps, towers) that could be taken over by players for plat and buff bonuses. You could even buy and place NPC guards in territory you owned, so that other guilds had to kill your guards before they could take your territory.
Those are just four examples out of dozens of emu servers- all of which offer things that EQ Live doesn't.
Here's the thing. The question isn't why people play emu servers when EQ Live is free. The question is how SOE can have all the advantages they have and still manage to miss capturing a large portion of their target audience. It blows my mind really. Just imagine what some of those emu teams I mentioned could do with the technical infrastructure, the marketing power, and the resources of SOE... These guys have done the amazing things they have done with "duct tape and donations" while SOE, who has a legitimate claim to the IP and all the advantages, wonders what they are doing wrong.
Part of it is that the guys that run those emus are really, really passionate about what they are doing. There is no other explanation as to why they would sink uncountable hours into projects that amount to what is ostensibly zero pay. I really don't see that type of passion at SOE. It's not just because SOE is a "corporation" either. There are several game companies that are absolutely passionate about what they do. SOE on the other hand, has always been somewhat "bloodless", and I think it stems from a culture that trickles down from the upper ranks.
This speaks to the other issue- the failings of SOE itself. I'm going to give full disclosure here. In addition to being a long-time SOE customer, I'm a former Sigil employee. Part of my job at Sigil was to liaison with SOE on some of the infrastructure stuff. My job duties required that I spend some (not a lot) of time at the SOE offices. So, while I'm no expert on any of this stuff, I'm also not completely talking out of my ass. I'm also no SOE hater. Frankly, it's kind of hard to hate a company as bloodless and milquetoast as SOE. There were times in my early EQ days that IhatedVerant Interactive (but never enough to quit playing EQ), but I've never felt anything more fervent than casual indifference when it came to SOE. Plus, I know a few of the guys that work at SOE and they are good people.
That said, SOE as a company has an agonizing history of failing at several major things:
1. Failing to read and respond to customer interests and desires.
2. Failure to capitalize on inherently available advantages.
3. Failure to convert challenges into opportunities for growth (EQ Mac, Vanguard, etc).
4. Failure to innovate, think outside the box, and take risks.
To be honest, I could tell you several things you could do quickly and with minimal resources to improve your situation significantly, but I'm not going to bother because experience has taught me SOE is unlikely to do any of the things I would suggest (see numbers 1 and 4 above). The bottom line is that SOE has always been a company that has chosen "safe, rigid, and mediocre" over "risky, flexible, and innovative." Again, I don't say these things with any vitriol. In some ways being cautious has kept SOE alive where lots of other "risky, flexible, and innovative" companies have ceased to exist. But on the other hand, it should come as no surprise to you that a lot of people are pretty desperate for alternatives to the mediocrity that SOE offers.
So now that we've given you our explanations, as the Assistant Lead Designer on EQ, why do YOU think there are so many EQ emu servers if EQ is free to play?