Learning German Through Gameplay
Learning the nitty-gritty mechanics of a language is, for many people, the most difficult part of a language--actually sitting down with those repetitive grammar and verb exercises and just pounding through them. Keep in mind that MMOs are not a way to replace this sort of learning: MMOs provide an immersive environment in which one can casually learn vocabulary and some conversational language.
The first big thing about learning German through MMOs is simply navigating the menus and command systems. They will all be in a foreign language, and while they might seem familiar, you might not be able to easily translate their exact meaning. Misunderstanding the very game play provides a very frustrating hurdle. However, once you've got the basic vocabulary of German MMOs out of the way, you've got not only some words under your belt that probably aren't taught in most textbooks, but a very everyday feel for their use.
The other thing about MMOs that can help with learning German is the immersive environment with other users. While, yes, many players just resort to a variety of Denglish or even English itself, with a little care to which MMO you choose, you can find yourself in a real, genuine immersive environment for German from the safety of your own desk. Social interaction with natives within the game play of the MMO will help work on your conversational and slang skills, both very important parts of learning any language.