One issue facing free online game developers is piracy. Many, if not most, of the Web sites with free online games are not actually run by developers, but by webmasters who simply locate game files they can host on their server. Some of these games are available for such distribution, while others are stolen from their original sites without the creator's permission.
Usually, the webmasters never bother to check, just putting up any game they can get their hands on. Legitimate developers find their games at these sites and have to act to get them taken down. If the site is located outside of the United States, it is sometimes difficult or impossible.
Sometimes students or amateur game developers don't mind their games being distributed in this way. The result is a ton on of free online game sites filled with the same games. This makes it hard for legitimate game developers to find an audience through search engine traffic.