Hello. You probably don't know me. I've been poking around Starmade for a while, and my thoughts on this subject actually go almost entirely against the grain of what people in this community believe is the reason why starmade died - I think partly because I'm not afraid to be honest. I doubt you or anyone else from this community will take them seriously - as that has been my experience with this community, but I would ask that you read them and consider them.
I don't actually believe that the power update is to blame for the death of Starmade. I think that the power update, replete with it's chambers and weapon changes was actually a much needed change, and I frankly place blame on a lot of the long-standing members of the community who left because they felt the changes were untenable without attempting to see them in a larger focus. I actually place a lot of blame on this community for demanding so much of the devs, and railing against every change the devs created - and this blame falls on myself as well. However, I don't even think that this toxicity and control exhibited by the community is the sole reason Starmade has died either.
The reason Starmade died is because there isn't enough to do. I'm not the first person to suggest this by far. Many, many people have suggested this before me. The factory system is great, but there's no reason to use it because once you build a large factory and stock it you're essentially just playing creative mode with more grind. The pirates system is interesting, but the pirates have never been balanced right, there has never been any challenge to them, and their faction has never felt real. The shipyard system was an interesting idea, but has always been buggy. And the worst offender has been that the automated mining was one-quarter implemented and still hasn't worked.
But those are just cursory glitches to the reason starmade died. The reason is that there has been no fleshing out of the universes. There has been no resource scarcity introduced. There has been no fleshing out of the AI in years, there has been no flora or fauna introduced. There is nothing for a single-player person to do once they have a semi-capable ship except fly around and blow stuff up. There's not even a goal in mind at that point. There's no endgame.
Minecraft initially didn't have an endgame, yes, but it had plenty of interesting things to do, such as build massive buildings, and mess with redstone. Besides, the end and the nether were challenges added very quickly in Minecraft's development. Many people have never beat the enderdragon or the wither vanilla in Minecraft to this day - including myself - but I know that it's there, and it's something to work toward. Working toward enchantments is sometimes just a grind, but it's still at least semi-difficult, involving problem solving to make efficient in the form of mob grinders.
I'm not suggesting that Starmade be Minecraft, I'm suggesting that Starmade have end-goals that are challenging and fulfilling. If an update had come out to fix universe scarcity and to fix immersion, and to fix factions 5 years ago then the Starmade community would not only have not stagnated and left, but would have grown. If players could have controlled the trade of an in-game galaxy through hard negotiations, challenging wars with the AI, and the building of a custom fleet in the vein of Mount and Blade and Avorion, then there would have been things to keep players engaged. If players were able to find and defeat some massively difficult space-station in the galaxy, or even the next galaxy over, then there would have been something to do. If AI fleets were challenging to raid but rewarding to, if there were an extra dimension to defeat, if you could hone your pokemon to defeat the elite 4, if you could beat the game 4x style through factional diplomacy or conflict or tech tree mastery, IF THERE WERE A TECH TREE, if there were resource-scarcity, then the game would have been interesting. And I think that if the universe had been engaging in 2016, even, then players would not have thrown such a fit about the weapons update - because PvP was the only thing keeping players engaged in this game, which I feel is a massive injustice to what the developers originally sat down to do.
While I do place blame on the community for this, for seeking to control the game's development. I do place blame on the developers as well, although I love them as they are human beings. When I first purchased this game on steam by eldest brother said to me, "I don't think the developers have any long-term plan for this game, and I think that will hurt them in the long-run." I denied this for the longest time, but he was correct. I do believe that the developers have a long-term goal in mind now, but their community has been toxic and controlling through-and-through. It's turned into an abusive cycle of developer V.S. player that has left everyone with emotional scars that need therapy and conversation to heal - pardon the analogy, but I don't believe it's too far off.
I began trying to say two years ago that the community needed to demand less of the developers, and that the developers needed to take a step back and learn from other games before continuing on. That people needed to study why Minecraft was successful, take a look at things like AI: War Fleet Command which is interesting battles against AI done right - although the AI blatantly cheats. Things can be learned from Avorion, and the failure of no Man's sky, and Mount and Blade. Things could be learned from Minecraft Mods and spinoffs such as Terrafirmacraft. And lessons could have been taken from the 4x-genre (which in all fairness, is where the devs were trying to go, much to my appreciation) and games about trading in space. Many of these lessons can be learned from watching Extra-credits for an hour or two each day.
But really, it's all of these things to blame. The developers lack of vision, the toxic control of the community, the lack of in game content, and the weapons/reactor update. All of these things are to blame for the failure of the game. At this point I believe it would be best for the developers to cut their losses, take what money they have, spend time on other projects, and maybe re-visit this game at a later date. I believe that the community needs to extend a truly open, and meaningful apology to the developers, and that the developers need to do the same to the community. Truly open discussion about why things failed, open minds, open hearts, and a tearing down of gate-keeping and toxicity is what needs to happen if this game has any chance of success left. And, if the developers do work on other projects, I strongly suggest they take the suggestion of Extra Credits - which was too late for this project - not to use Steam Greenlight.
You asked why the game failed, all of those things are why the game failed. I just hope that people will one day actually read and think about what I have to say.