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Well, it had a pretty small budget.Basically, money and corporate greed where behind many of the game's more questionable decisions, such as Dante using his design from the failed DMC: Devil May Cry reboot instead of the classic design.
It's also a new studio. Companies were unlikely to play ball at the time. Sony aside. Many of them want their recent characters/designs so it at least promotes their own games. That's not even corporate greed. That's just not taking an outright risk. Yeah, the DMC reboot didn't do that well overall, but at the time, that's what they wanted to promote. It failing was probably not the case just yet. SE is going to charge more money than some companies, but that's due to employees being paid a bit differently too. Specific people own specific parts of the IP, not SE in general. That means someone like Cloud Strife has to be more expensive, due to artists and other various factors. That, and he had nothing to be promotable for. See the risk factor. Lightning was the lateest protagonist of the time, and XIII was doing fine in their opinion(though could be better). Wanting to get extra promotion for that was actually a pretty smart move on SE's part.
A good example of corporate greed would be Cole/Evil Cole, forcing two or nothing. Though that could relate to promoting a current game less so than "we want more and more" too. That said, the lack of Crash and Spyro sucks. Activision isn't the easy to work with, so they were likely overcharging as is.
I think the problem with trying to dumb it down to money/corporate greed is that it's not entirely the whole case. It's definitely a factor, but it's more complicated. It still sucks a cool idea didn't work out well. However, I'd say the roster is only a small part of the issue. The gameplay is awkward in its own way. Having to do a "finishing move" of sorts to win any actual battle means matches can go on way longer than normal, causing stalling/making it bad for tournaments with time limits. That kind of decision is going to be something that can hurt the overall game. It's not that people don't like the idea too(some do, some don't), it's the fact that it can't work too well as a competitive game with problematic design choices. That said, that's the only one I remember being a legit issue at any point among gameplay itself. It's not a bad game, but just needs more work. Also, I can't blame Sony for giving them a smaller budget. Are they really going to give a large budget to somebody with no real clout to their name? No. That's too risky.
What would've helped is if they tried to do a smaller roster with some basic characters and let it build on with a sequel. Smash actually did this formula well with a fairly simple first game, while Melee massively changed things on its own. A big roster does not work well for first time crossovers. Especially if it's not effectively a continuation of other gameplay(Marvel VS Capcom worked because it's basically updating it from Street Fighter mainly, so it already had all the core gameplay tools to work with, with only the roster mainly changing, and adding some fun unique stuff. The first actual game is X-Men VS Street Fighter, and they already had half the characters essentially easy to translate over. That's not possible with every crossover either. Smash obviously can rarely do that, since only a handful came from a Fighting Game as is. Well, brawler or traditional anyway. Not one technically a fighting game by design).