Arnold Hendrick (who as part of a long career designed a game you may have heard of if you’re of a certain age) has a long piece up on why APB failed. (Well, aside from the no one buying it thing.)
A game design is a “baby eater” if high-level players constantly defeat low-level players. APB is a classic example of this. Incoming “baby” players experience nothing but defeat as veterans tear them apart. Despite claiming that a special “threat” system would create “fair” matches, the actual system completely failed. Vastly unequal matches were commonplace in APB. This resulted in no positive word-of-mouth encouraging games to try APB. Instead, discouraged novices spread “bad vibes,” in the form of complaints about everything from real culprits (such as the matchmaking system) to irrelevant issues (a lack of “realistic” gun recoil).
In the final weeks before bankruptcy, Realtime Worlds desperately patched and “fixed” APB. Unfortunately these were minor tweaks to weaponry, outfitting and matchmaking adjustments that did nothing to prevent “baby eating.” Perhaps the senior RTW designers were so in love with the original concept that they couldn’t see the horrible reality. Perhaps there wasn’t the time and resources to make wholesale post-launch changes that fast. The inability of those designers to see the problem during beta was fatal.