It's a gorgeous game, and I'm heartbroken that they're shutting down. I was part of the very first wave of beta testers when they first launched. Even though I didn't spend much time, I remember being shocked by their attention to details. Every little thing was nicely planned, designed and implemented.
But, aside from the intrinsic beauty, the truth is that there was no reason for you to keep coming back. It didn't have the same evil addictive psychology of Zynga's games ("Your crops are dying! Your friend Samantha just moved to a farm next door. Spam your friends - or buy some credits - so you can level up faster."). No intricate action + social interactivity like WoW. No puzzle challenges like Limbo, or adventure-style like Monkey Island (true, neither was multiplayer). No fast paced action like War of Tanks/War of Warplanes..
In the end it was just a cute massive multiplayer social game. Maybe the cutest ever. But this doesn't seem enough to attract a loyal audience - other than maybe a few other game geeks, artists and designers.
This reminds me of the Steve Blank's (the original author behind the lean startup movement) stories. Do you really need to implement a full game, with that many details, with that many layers, with so many features, just to realize that your users aren't coming back in the first place? Can't you put your mom/sister/son to play for a few months, and just see how many times they keep coming back (when you're not looking)? Can't you probably get to the same conclusions with, say, 10% of the effort? If you do this early enough, you'll still have the other 90% of runway to make corrections and explore different options (or, hell, pivot to totally different business model if you discovered your boat isn't going anywhere).
Of course hindsight is a bitch. It's always so much easier to explain what happened, that to forecast the future...
But Glitch repeated some of the same mistakes that others have done in the past. Case in point: the excellent paper "Lessons from Habitat" (http://www.fudco.com/chip/lessons.html), about the experimental project created by Lucasfilm in the late 80's. The entire paper is a great read, but one part that strikes me as relevant to this discussion is:
While we find much of the work presently being done on elaborate interface technologies -- DataGloves, head-mounted displays, special-purpose rendering engines, and so on -- both exciting and promising, the almost mystical euphoria that currently seems to surround all this hardware is, in our opinion, both excessive and somewhat misplaced. We can't help having a nagging sense that it's all a bit of a distraction from the really pressing issues. At the core of our vision is the idea that cyberspace is necessarily a multiple-participant environment. It seems to us that the things that are important to the inhabitants of such an environment are the capabilities available to them, the characteristics of the other people they encounter there, and the ways these various participants can affect one another. Beyond a foundation set of communications capabilities, the details of the technology used to present this environment to its participants, while sexy and interesting, are of relatively peripheral concern.
Keep in mind the entire project ran on Commodore64, and two decades ago a 1200bps connection was leading edge. But even though gamers today have much higher expectations in terms of quality than ever before, the core principle is still the same: success of a massive multiplayer game is defined not by its level of peripheral sophistication (be it design, cuteness, or head mounted displays), but by the social experience and characteristics of how people can interact with each other.
(btw, 20+ years and we still don't have head-mounted displays. No, Google Glass doesn't count)
Another issue was channel distribution. It's really challenging to succeed with a web-only game, especially when you're not anchored Facebook. And if on top of that you're using Flash, you'll be missing out all those of 2-3 minutes mini-slots of "free time" that people have every day on their mobile devices (waiting for the train, the bus, bathroom, elevator, etc). And Glitch almost never sent emails. So they were expecting people to bookmark the site and keep coming back. Yeah, right...
Anyway, in the end of the day the Glitch team deserves a lot of praise for accomplishing what they did. It's a gorgeous project, and I can just hope that their work will inspire future designers and game developers, and hopefully parts of the code gets open sourced.