I note with a little sadness that Uru Live is disappearing, before it was even born. The Myst series of games have always represented the high-water mark for graphics and visual adventure games. Uru Live was an interesting effort...an attempt to bring this kind of game into the online massive multiplayer online space.
The company spent a ton of money to build this thing. The results, visually, were pretty astonishing. Great conceptual art, excellent engine...a lot of good ingredients were there. The best moments in Uru were "vista moments", where you would come across some new area, and be simply blown away by the beauty or concept of the thing.
So what went wrong? More than anything, I think, the problem was the underlying thinking about the game that was being played. Why do we play games, or read books, or watch movies? To see things that are beautiful; to see "new" things. We can do it to learn, to interact...or to compete.
Uru never had any sense of competition. One could be built, but it did not yet exist. In fact, Uru didn't really seem to have much of a sense of gaming at all. Clever puzzles that required cooperation could have been designed, and weren't. That really left only exploration. Uru Live itself never delivered that, either...the official version never came to be.
It strikes me that the marketing of this thing was screwed up pretty badly...to get the "buzz" you need to get an MMORPG started, you need a good burst of players. The single player game was fine, but it followed the general sales pattern of every single player game: Big initial sales, then a steady decline. MMORPGs are all about maintaining the franchise. You have this initial burst of players, and you need to retain them.
Uru Live didn't exist, so there was nothing to keep player mind share.
What's more, it was painfully clear in the live "prologue" that whatever plans there were for the online component simply hadn't worked out. If Live was somewhere near a true release, vastly more of the game should have been working during the Christmas timeframe. It might not have been ready, but it should have been dramatically apparent where it was all going. It was not.
I'd conclude that management realized that the Live part just wasn't going to work, for many reasons. They decided to milk the cash they could out of the single player version, and so they have. This is a sensible thing to do. There seems to be a lot of content that's been prepared for Live; this will be released as expansion packs for the original game. Again, this makes financial sense. For purchasers of the game it makes sense too -- and is probably less expensive than a monthly fee in any case.
Bold experiments happen, and sometimes they don't work. I hope the team is proud of their successes. They've really raised the bar in some areas. Deeper planning in the actual social/online game component might have given the project legs.