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Remember the players are the ones paying and the only reason they pay is because,
<theorycraft article snipped>
If part of a game that the player is interested in becomes "unfair" ... well, you won't keep that player for long.
You like citing that article on gaming theory, and it's got some nice platitudes in it, but platitudes don't necessarily translate into bottom line figures.
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At this rate, all FFXIV will end up keeping are hardcore raiders who only care about,
who ironically are not that hard up for vanity items that the cash shop is selling. The cash shop is to some extend a self-extinguishing venture as it drives away players that are most interested in the goods it's selling, in the long run.
Time will show best if it's self extinquishing, as you put it. I think you're overestimating consumer dislike of the cash shop.
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FFXIV has a wide range of activities and attracts a wide variety of players with different goals and interest. If Yoshida wants to destroy this diversity and be "purely" a raiding game very much like it's main competitor WoW (seriously, there is nothing else to WoW, it's "raid or die" if you don't like PVP), for the sake of short-term gain ... well, this is disappointing - not to mention competitively disadvantageous in the long run; I don't see how going head to head with WoW, fighting on its terms, is a good idea.
Yoshida isn't destroying anything. The content coming out seems pretty evenly balanced to me, including a ton of vanity. Also, going to head to head with WoW? This game has it's own built in market, just like WoW did (Warcraft players). This isn't some winner take all deathmatch. People play both, even having subscriptions for each at the same time.