Form an insider perspective, what forms of monetization, if any, tend to be harmful for the games health, in terms of player numbers and/or amount of money spent by the players on the game?

In my experience, the most damaging form of monetization to a game and studio's health is actually undercharging. I've said many times before that the goal with monetization of any kind is a positive value proposition to the player - the player spending the money needs to feel like they are getting more value out of the product they purchase than the money they spent to obtain it. Undercharging for value is often the quickest way to financial ruin because we can always lower prices later, but we can't raise prices after the fact without a massive player backlash.

On one F2P title I worked on, we had a game system where players could earn a weekly number of special keys to open special chests through gameplay and could buy an additional allotment of weekly keys through the cash shop if they wanted. We set a price and launched it with the game. The keys quickly became the biggest seller in the game but we mistakenly priced them too low for the value they provided and we weren't selling enough other things to support the continued development of the game. We didn't want to increase the key cap, because we'd get backlash for essentially "selling power" and would have to deal with significant gear inflation. Raising prices on the keys would have incurred the wrath of the player base, even if they would have paid more for those keys if we had set those prices at the start. We were stuck looking for a new form of monetization that would make up the shortfall of the other products that weren't selling, and ended up having to sunset the game because we couldn't find one that stuck and didn't earn enough to sustain continued development.

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