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It's not the survival horror aspect that killed it. It's just a crappy game.

Left 4 Dead is a shooter and that works fine. Dead Space 2(haven't played the first) is a shooter that plays like the new Resident Evil style and that game works fine.

They need to hire someone who can develop a good game is what they need to do. Capcom has lost a lot of its best employees in a very short amount of time and has been shoveling out a lot of garbage lately. It's not going to be too long before no one even supports the company the way things are going.