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But yeah, that was predictable. Even if Neco-Arc was viable, it wouldn't solve the problem of casual players hopping online only to get steamrolled and quit the game, unless she was actually broken and could win by mashing like there's no tomorrow (which would be another problem). So it isn't surprising at all to see people dropping the game past the Neco-Arc release hype: some were here only for that, some expected her to be better and didn't try other characters out, and few of them actually kept playing.
That aside, the game dying again is normal. Fighting game player count always trickles down because there's no reason for people to actively sit in the game. Especially if the matchmaking options have as many problems as Lumina's. Keeping people in-game is something many other online games desperately try to do, via dailies and limited events. Fighting games also rely heavily on the player's desire to improve themselves, rather than in-game progression.
I imagine most people want to start the game, jump into a few quick matches and then go do something else. Can't do that in Lumina most of the time because everyone's super picky about opponents, netplay antenna changes made people more likely to instantly refuse matches, and lobbies force people to wait for their turn. The only thing you can do while waiting is spectate or sit in training mode.
So what's likely happening most of the time is, people start the game, go to look for a room and either there are none, the few rooms are laggy, require waiting, are ranks too far from your own, or kick people for whatever reason. They go to ranked match and wait for ages without a match. They try challenging people on custom search and get refused half the time. If you start your own room, who knows what kind of opponent you end up with. You'll probably end up closing the room on them, which is stressful for both parties.
It gets to a point where most people don't want to even try starting the game just to waste time trying to find a match, when they could easily play something else instead.
Oh, and adding only two characters per update doesn't guarantee people stick around, either. I imagine most people see the new characters, try them a little and probably find they don't like them, then quit again. The chance of a new character appealing to any random player enough to keep them playing seems small to me. Take me for example. None of the DLC characters appeal to me.
Neco-Arc is probably the most popular character on the roster and she's trash. It's the same as having a low-tier character that a lot of people were interested in. It's like someone who buys SFV just for Juri and then quits after realising how bad she is.
A lot of people including myself buy fighting games just to stick to one character. I have a friend who bought SCVI just for Geralt. I have another who bought Strive just for Bridget and refuses to play Xrd because Bridget isn't in it. I bought this game just for Arcueid. That's why it's important to make every character viable.
If it were up to me, I'd have made Neco Arc to be on the same level as other characters. But there's special meaning when someone manages to legitimately beat others using joke characters. Sometimes I see Neco Arcs with crazy win stats, and I immediately think "that guy must be insanely good".
Remember when everyone said Panda in Tekken 7 was trash? Then that guy beat the crap out of everyone using Panda. This thread also reminds me of how SFA1 Dan was meant to be a joke character, but he was so strong they had to nerf the heck out of him.
Theres more factors that MBTL is 'dead' other than the unfunny cat, Melty was always more of a """niche""" franchise to be more appealing for the mainstream audiences, even in figthing games communities people are really polarized about Melty.
Maybe that will change with the next UNI, i dunno
Faust is in a very weird spot in my opinion, with him not originally being a joke character and the Guilty Gear series trying to be balanced (see GGXXAC+R). So even though he pulls out a lot of random stuff, I wouldn't say he's "just" a joke character unlike, say, Lowain in GBVS.
Also Neco-Arc and Juri are not really comparable IMHO, one is clearly a joke character that is popular because of memes and the other is a regular one (though artworks might help with the popularity boost). Both can be poorly balanced and struggle more than the rest of the roster, but the joke character isn't meant to be necessarily good. And no matter what, someone who actually wants to play the game might still stick to that choice, whether it's because they like the character or their gameplay; I remember some people played Bullet in BBCP/BBCPE even though IIRC she required a lot more effort to get wins than other characters back then.
As for people buying games for a single character: that's a double-edged sword. Many people do that and drop the game shortly afterwards, whether it's because they didn't like the gameplay as a whole, got stomped online, have other games they want to play more, or didn't like the character's gameplay (among other reasons). Having a character in a game doesn't mean you'll like their gameplay (see GGST and the radical changes some characters underwent), and limiting yourself to trying a single character out means you might miss out on one that clicks. Characters can be a strong selling point, but if a game looks interesting on its own merits then skipping it entirely just because it doesn't include a specific character or because said character is supposedly bad sounds like not giving it a chance to me.
Do you realize the horror of that scenario?
I've complained about the dripless problem this game has, but it is not why it's low pop. It has a similar pop to blazblue. What do these both have in common? They are both overwhelmingly weeb. And are both fast paced.
Also, theres a difference between a zany character like faust and yoshimitsu(Soul Calibur), who are more whimsical and whacky, and a joke character who is intentionally weak like dan(Street Fighter) and neco. Joke characters typically are more self-deprecating and are made as a mockery to fighting norms.