From DivNull RPG
Play-by-Chat is a style of role-playing that is done when players do not have the time or ability to meet up physically. With the advent of personal chat rooms, video chat, and fast downloads, role-playing can be done directly from your home.
The pros of Play-by-Chat
1) Play anywhere there is a network link up.
2) Can play when unable to meet up physically
3) Having more space to lay out books or paperwork
4) No need to hide information as GM
5) Can display as little or as much as required through download
The cons of Play-by-Chat
1) Can you type fast? (Unless done via Video Chat)
2) Need to scan in documents on paper or type notes to give to people
3) Lack of physical closeness can take away some of the emotional responses to the gameplay
4) Network problems can cause slowdowns in gameplay