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I don't think everything is quite so doom and gloom as you say but certainly player count is an issue in my mind. Working on a Dream is a TON of work, aside from that fact that if I were doing this on Steam or something, I could at least ask for a $1 buy of the Dream/Game on that platform, here I am investing a ton of time and energy to make a Dream/Game for free, for a very small player base. This is undeniably an issue.
The second issue certainly is a lack of updates and downgrades. The inability for me to upload my own compositions of music to Dreams via the website was nearly a dealbreaker for me. I am a musician first and foremost and was incredibly excited to upload my original music. Then, that was axed almost immediately. It's not as if that solved anything either. Plenty of copyright music on Dreams, its just recorded in a crappy quality using an AUX cable. This is the same for voice acting. I can get great quality audio using my music software on my computer for voice acting, but plugging a mic directly into the PS4 sounds awful. As for updates, I don't understand how there still isn't multiplayer? Being able to play with people would do a ton, I believe. Theres a Dreams community, apparently, but it is invisible. Even at dreamscon, you're walking around alone. If there was any time to beta multiplayer, that would have been it.
I love dreams, but my time investment in it is certainly decreasing. To put so much energy in making a great game for people to have 15 plays or something is really getting to not be worth it.