It wasn't profitable enough, sure, but it was still fun. I didn't felt pressured or incentive to spend IRL money or use of it's freemium services, I didn't felt lacking or behind over it. But now NGS feels more about it than before and not as fun as it was.
I find it hard to believe PSO2 had ongoing conventions in Japan and how popular it was. Would you say NGS weakened its reputation as a popular MMO in Japan?
No, you must remember that the time release of Phantasy Star Online 2 was different between Japan and the west.
PSO2 was released in
2012 in Japan, when it's still stood out as a best MMO compared to other MMOs at that time, a freaking ten years before western version released.
That's why Japanese fans welcomed NGS since it's a very big update more than one decade after the game was released.
Eventhough OG PSO2 was still popular, NGS was still really necessary to keep PSO2 relevant to Japanese players.