I disagree and my view on the situation is heartlessly cynical.
The key point your Economics 101 analysis misses is:
Players pay money even for games that are a sandwich.
There is some money lost if quality slips, to be sure. But there is also some money gained if new, excited players join the game because of new content. There’s also a problem with endgamers: they’ve already spent money, and don’t have a lot of things left to spend money on. That makes endgamers worth less potential money than new gamers.
Thus, we see that Economics has more than one level. In F2P economics, attrition is expected: a person joins, spends what they think the game is worth, burns out, and leaves. Hopefully by then, there’s enough new content to entice a new person to start the cycle. Whales exist, but are far and few between. The trick is getting the average player to feel like your game’s worth some $X, with a core of enthusiastic players appraising it at some $Y > $X, and so on.
Bug fixes represent work to satisfy players later in the cycle, who are worth less money. Bugs represent frustrations that cost some amount of money due to attrition. New content represents enticement that can bring in new gamers with more money. So if the equation balances:
$bugFixes < ($newContent - $attrition)
That’s bad news for bug fixes. It’s not “friendly” business, but the Invisible Hand isn’t required to have a heart. It’s not about maximizing customer satisfaction, but viewing revenue as a function of customer satisfaction and choosing to stay at the bar, rather than above it.
The game’s publisher has the data that tells them how the equation balances. The developers have stated intent to continue adding new game modes and content rather than focus on stabilization. Now, what does that tell us we can deduce about the goals of the ship’s captain?
All of this is less complex for up-front games, like Super Mario Bros. 3, that didn’t have the capability of post-release tweaks and content. They had to make sure you felt their game was worth $50 or upwards before you bought it, and had no way to fix it if they screwed up. People are still playing it decades later, and still value it at near or above its original price. They didn’t have the option of hovering just beneath the bar.
F2P games, and Gems of War is not an exception, operate on the constant assertion that the game may not be worth $50 to you TODAY, but if you go ahead and pay the $50 then the content it gets you might make it so, and it will certainly probably be worth $50 tomorrow, ESPECIALLY with the content you got for $50.