We had some weeks ago an internal presentation by the CTO and the Defold team. They explained their goals for doing it. The goals, as I remember them, to give Defold for free are:
* To improve Defold. The bigger the user base the more stable, relevant and useful it will be the product.
* To show people that King is a technology company. We do cool stuff.
* To be able to hire developers that already know our tech stack.
The first point is the most important one. What have helped to grow other engines has been a community of users that have helped to improve them in features and stability. Some times users help open source engines like Ogre3D, others they help paid engines like Unity3D. We think that King can offer a win-win situation with a free (like in free beer) engine with exciting features in exchange of a community that uses it and makes it relevant.
This ideas are in the box titled "Why are you releasing Defold free?" at the bottom of the site. If you want to read them from an official source.