Mega Man's apparent demise was painful. They canceled a Mega Man-themed MMO that people were super-excited about, because...well, IT WAS A MEGA MAN EM-EM-OOOH! That woulda been so cool!
The worst of it was when Mega Man Legends 3 was slated to release. The Legends series was very popular, and Legends 2 ended on a cliffhanger, so people were excited to finally have a continuation, or at least a resolution, It was really cool too, because they had a website set up where they would show off development content, and fans could give feedback about the game, a true collaboration between dev and fan. Then they canceled it, and some EU Capcom person cited that it was because there was little fan feedback, despite the amount that was flooding into that dev site at the time. It was like salt in the wound :C
The MegaMan MMO wasn't being made by Capcom to begin with some Korean MMO company (Capcom just allowed it) but something happened to the company where they had some layoffs and left the MMO business and cancelled the MegaMan MMO in the process. People not knowing the exact details just blames Capcom for that game's cancellation. Capcom nor have the resources or man power let alone the money to even think of making a MegaMan MMO and the only MMO Capcom can even make is a Monster Hunter one (which they sort of already done).
It really doesn't make sense for any company to do that. Mega Man was a money-maker, I'm sure (I only played a little of one game on a Nintendo system). Which means they cancelled what would have been a surefire income. And then saying there wasn't enough feedback. There are still fans saying there should be another. Do the higher-ups at Capcom just like to screw with people? Or are they that stupid?
MegaMan was a money maker since they released so many games at once (like we would get 2 MegaMan games in a span of 6 months back then). They were cheap to make since they were quick and easy to make. Each individual game didn't sell millions (no they barely made a million with each game) its that they have so many of them and they were so cheap to make they made quite the fortune of them.
The highest selling MegaMan game was MegaMan Battle Network 4...which sold 1.4 million units but it was mainly riding off the hype and success of the critically praised MegaMan Battle Network 3....because BN4 was sort of disappointing when coming off BN3. BN3 was a masterpiece (IMO) and the best BN game (2nd is BN6 because out of the 6 BN games it has the best combat system) IMO. Also, BN4 is the only MegaMan game to break 1 million units.
So now where was I?
Yeah the problem started during 2005 which when the marketing for MegaMan games went down....gradually...well in the west that is. Then another problem was that there was so many MegaMan series: Classic MegaMan, MegaMan X, MegaMan Legends, MegaMan Battle Network, MegaMan Zero, MegaMan Starforce, and MegaMan ZX. Christian Sven even said the popularity of MegaMan was declining due to brand confusion and I think..well seen through experience from the Capcom Unity site that the MegaMan fanbase was in fact pretty divided (moreso than the DMC fanbase...divided by 7). I've seen MegaMan fans go on saying they loved the X and classic series but hated everything else or even stated Battle Network and Starforce were the worst things to happened to the series. Some fans who were fans of BN and SF never gave the platformers (X, Classic, Zero, or ZX) a chance due to not fitting their tastes. Hell I even seen BN and SF fans argue over which was better (not debate ARGUE).
It was hard to get into MegaMan because there was so much games and series it becomes hard which series to follow or how to follow. Some people even said that only MegaMan (Classic) and MegaMan X were necessary while the rest were pointless.
The only series that wasn't affected by this division would be Legends because it was on hiatus for so long that a strong majority of fans wanted a sequel.
Prior to Legends 3 being made, the MegaMan series wasn't doing so hot with ZXA selling below 100,000 units and SF3 selling far less than SF2 which sold far less than SF1 (which was sad since SF3 was an amazing game and the best in the SF series). Capcom was only making a profit off 8 bit rehashes (MegaMan 9 & 10 but they were still fun though).
Hell there was once big flame war at the Capcom Unity forums about the future of MegaMan during MM9 and MM10 release because some MM fans I like to call the "Idealist" didn't like the direction Capcom was going with just shoving out 8 bit rehashes (and feared the same would become of the X series with X9 and X10) and wanted more modern day MM games (like what Mario and Sonic is doing) but on the other side were the "nostalgiaist" that argued........something about nostalgia and that since these were cheap to make and made a lot of money due to nostalgia its an okay direction.
MegaMan has been dying for sometime now and the only thing that could've saved it was Legends 3 (Maverick Hunter IMO would've made it far worse) as well as MegaMan Universe and maybe that MMO. Right now Capcom has MegaMan on life support (with the iOS games, digital releases of the old games, and cameos). They'll probably cut it soon.
Keiji Inafune's "Mighty No. 9" is looking to be MegaMan's reincarnation if you will.