It’s a mix of both. And it all traces back to WoW.
We all know that WoW ushered in a whole new set of standards in the genre while simultaneously bringing in an exponential amount of new gamers to the MMO industry. But those new gamers created new dynamics within the industry. For starters, there’s simply more people playing, which means more people will also leave the industry at some point (or at least, come and go over time), all of which starts to skew the numbers.
And then of course is the mass of WoW clones that came into the market since then as well. These have not only fractured the gaming community into hundreds of smaller ones, but the direction of those games has also pushed people away from the genre completely.
Fifteen years ago, I had X amount of time to myself per day/week/month. The idea of an online game world with other players seemed pretty cool. All one had to do was pick the game/world that you liked best from the handful of games that were available (UO, EQ, AC, DAoC, WoW, etc).
Fast forward to today. I still have the same amount of time to myself for entertainment (probably less) but now there are thousands of titles to pick from. Many of them seem like replicas of each other while others, although more to my liking and personal preferences, are old, tired and worn out.
So yeah, take your pick. Or don’t play any games and play the forums instead. It’s more entertaining and cheaper.