I wanted to chime in. I’ve been on both sides. I’ve worked on live MMO teams (and before that, MUDs), which are largely open development, due to being online and evolving while live. And I’ve worked on other games (both AAA and indie) which were not open.
Here's the thing.
Teams who embrace open development are, at least to some extent, using this as a marketing strategy. Anyone who says otherwise is lying.
In the world of indie games, gone are the days you can ignore pre-launch community. This is a fairly new phenomenon. For many indies, community and crowd funding is how you get money to make your game. Community votes help you avoid getting trapped in the Greenlight queue for months or longer. Community and hype are how you can get the attention of publishers and new platforms, if that’s what you’re looking for. And, for an indie studio without an established fan base or huge marketing budget, community is a big factor in how well your game will sell.
In the world of AAA MMOs, “betas” stopped meaning “public testing” a long time ago. It now primarily means “publicity event” and “hype machine”. Sure, betas will still uncover infrastructure problems and bugs. But you don’t launch a beta unless you’re convinced it will be a marketable player experience (or you’re out of money).
The best way to build a community, outside of having something cool to show off, is to engage people in the development process. To listen to them. Open development does this. There’s very little that will engage players more than implementing their ideas and changes. It’s human nature. We want to be a part of the creative process. We want our opinions heard and validated. We want the game to be designed for our own enjoyment.
Is this a bad thing?
Not always – there are smart people out there who will give you intelligent design critique and good ideas.
Here's the problem. When reacting to the community's feedback, which hat are you wearing? Your marketing hat, or your designer hat? If you are wearing your marketing hat, then John/RPS's critique is pretty valid. Game design decisions become a popularity contest. This dilutes the vision of the final product. And likely bloats out the feature list.
Now, as game designers, we want players to enjoy our game. We need our game to achieve a certain level of financial success to continue working and doing what we love. Yet we also have a vision of what we want to create. Sometimes, this vision will be at odds with the goal of maximizing the game’s popularity.
Open development can be a slippery slope that leads from an artistic focus, to a purely business and marketing focus. If that happens, you'll probably end up making a shitty game anyway. How not to slip on this slipperiness?
Be critical of player ideas.
When people want feature X because they loved it in their most favorite game ever, be prepared to say no (this will happen a lot). Be prepared to tell players, “that is not the game we’re making”.
Make unpopular decisions when they need to be made. Explain why.
Be controversial, but don’t be an asshole about it.
If you have crowd funded your game, make damn sure you don’t make promises you can’t keep.
Never lie to your community, even if the truth is hard.
Above all else, be true to the vision of the game you set out to create.