2-3 million for a new IP is not a flop. Especially when that IP is as cheap to develop as Labo would've been.
Personally, I think there's immense potential in Labo; if the marketing team nails it and they get STEM clubs, schools, etc on board, 10 million plus isn't out of the question.
Sadly, a lot of "hardcore" gamers want to fail because they seem to have the attitude that if a game isn't aimed at them first and foremost, it doesn't deserve to exist.