I'm sure when they started development they overestimated the size and rate of growth of the MMORPG market. If the market today was as big as some estimates a few years ago, then the cost of launch may have been justified. I'm sure underestimated launch cost is just a piece of their reevaluation of the economics of the game.
Yes, the "estimated markets" for all kinds of things having to do with the Internet were way overblown a few years ago, and I think part of the problem--heck, I'd say all of the problem--for game developers from their end is this whole tendency to "genre-fy" everything into these neat little descriptive packages like "MMORPG" and "multi-player" and so on, just to have some kind of angle to pitch to investors or backers that sounds like something meaty and substantial, but surely isn't...;)
I mean, "MMORPG" doesn't really tell you anything about a specific game, does it?--Apart from the fact that the creators hope it will be good enough and therefore popular enough to attract a monthly subscription base large and faithful enough to recoup development and set-up costs and maybe even turn a profit...;)
I'd like to see investors and developers return to the idea that what is most important about any game is not what sort of genre it may be described as fitting, but whether the game is *good* or not--whether it's original, entertaining, and a quality production. If they'd work toward establishing that first, and worry over genre classification second, things would be a lot simpler all the way around, for investors and developers alike. IMO, any software company like EA, or interested investor groups, who decide to budget for "an MMORPG" and then go out looking for one are making a big mistake. They ought to be looking for quality and originality first, and worrying over genre second, whether that genre is MMORPG, SP, MP, etc. Of course, being able to spot quality in computer games isn't always easy--and that unfortunately is why genre-labeling like "MMORPG" has become as important a catch phrase as it has for investor groups. As we see here, though, catch phrases are no substitute for the real thing.
It is well known universally that I do not make mistakes--so, if you should happen across an error in that which I have written, please be assured that *I* did not write it!...:)