Then they epically fumbled the bag and she became irrelevant in like a year
Honestly Activ8 is the most retarded corpo to ever exist.
What kinda company was Activ8 back then? Nowadays it's clearly entertainment (more specifically, pretending to be relevant by pointing at its past trendsetting role and current failures without mentioning the "Failure" part), but if they were initially a tech company doing tech demonstration (which I believe is the case, but I cannot actually find anything clearly stating this), them fumbling after stumbling on the entertainment line is understandable.
I mean, it can clearly be done better, as demonstrated by Cover, but Activ8's tech was so far ahead of its competition, there's an implication of tech being thoroughly entrenched and entertainment just not being considered the point of the company at all.
That Upd8 only became a thing
after Hololive, Nijisanji and .LIVE all already ran half a dozen talents or more rather demonstrates how much of an afterthought entertainment was.
While it clearly fumbled an opportunity, it's more understandable if their undeniably cutting edge tech was actually theirs (Cover's tech was theirs, of course, but cutting edge... uh, yeah. No). It'd mean that they genuinely put in the engineering work first, everything else was just for showing off said work.
The
problem with that approach being, of course, that there's no obvious monetisation avenue. And with engineering being so highly entrenched and genuinely intensive in terms of manpower and finances, swerving towards entertainment was a lot harder for them than it was for Cover's literal handful of people on a budget made of dreams and wishful thinking.
Profitability would also have been more difficult to achieve since the money input was so much greater.
tl;dr: Activ8 may arguably have failed because its tech was too good.