First let me say that SWG only sucked when they decided to run through major game design changes after the game launched.
You are correct that the revenue stream for Flash based apps is normaly low, but Metaplace is a different beast than your standard Flash game and Raph does have a point about how many people play web games and have the Flash player installed.
Metaplace is designed to make money in two ways. Advertisements and the purchase of Metabucks for various uses. He's using Flash as a client for an online, multiplayer, user-content heavy gaming service, basically.
Flash is also a good way for indie devs to get their work out to a large audience and possibly get some publishing deals that allow for a more lucrative revenue stream..(See Alien Homonid, N, LineRider etc.)
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