MMORPG was coined by Richard Garriott the creator of Ultima Online

The term MMORPG was coined by Richard Garriott, the creator of Ultima Online, in 1997. Previous to this and related coinages, these games were generally called graphical MUDs; the history of MMORPGs traces back directly through the MUD genre. Through this connection, MMORPGs can be seen to have roots in the earliest multi-user games such as Mazewar (1974) and MUD1 (1978). 1985 saw the release of a roguelike (pseudo-graphical) MUD called Island of Kesmai on CompuServe and Lucasfilm’s graphical MUD Habitat. The first fully graphical multi-user RPG was Neverwinter Nights, which was delivered through America Online in 1991 and was personally championed by AOL President Steve Case. Other early proprietary graphical online RPGs include three on The Sierra Network: The Shadow of Yserbius in 1992, The Fates of Twinion in 1993, and The Ruins of Cawdor in 1995. Another milestone came in 1995 as NSFNET restrictions were lifted, opening the Internet up for game developers, which allowed for the first truly “massively”-scoped titles. Finally, MMORPGs as defined today began with Meridian 59 in 1996, innovative both in its scope and in offering first-person 3D graphics, with The Realm Online appearing nearly simultaneously. Ultima Online, released in 1997, is often credited with first popularizing the genre, though more mainstream attention was garnered by 1999’s EverQuest and Asheron’s Call in the West and 1996’s Nexus: The Kingdom of the Winds in South Korea.

These early titles’ financial success has ensured competition in the genre since that time. MMORPG titles now exist on consoles and in new settings, and their players enjoy higher-quality gameplay. The current market for MMORPGs has Blizzard Entertainment’s World of Warcraft dominating as the largest MMORPG, alongside other titles such as Final Fantasy XI and Guild Wars 2, though an additional market exists for free-to-play MMORPGs, which are supported by advertising and purchases of in-game items. This free-to-play model is particularly common in South Korean MMORPGs such as MapleStory, Rohan: Blood Feud, and Atlantica Online. Also, there are some free-to-play games, such as RuneScape & Tibia, where the game is free, but one would have to pay monthly to play the game with more features. Guild Wars, and its successor, Guild Wars 2, are exceptions. They avoid some degree of competition with other MMORPGs by only requiring the initial purchase of the game to play.

Source