I think the reason why Deadfire didn't sell is very simple, people didn't particularly like Pillars 1. Due to the nostalgia craze Obsidian didn't get useful feedback on the game and the second game therefore couldn't sell on word of mouth because people who bought that had a fairly mellow reaction to that game as well, and those were the people who liked the first one.
The issue remains however that I doubt they could create any really compelling game with their current writing team, they just seem incompetent.
I think what this boils down to is that a new IP sells on the strength of the premise, a sequel sells on the strength of the franchise. I think we can all agree on that. So Josh is making a fundamental mistake of looking in the wrong place. He was right in his first musings that maybe people didn't like PoE1 as much as they said they did, or as much as the reviews were saying. Even though I was going to write that PoE2 had no other alternative but be stillborn, I kinda don't think that's true anymore. It had no chance to sell as much as PoE1, but it could rope in people who were unsure about its merits after having played the first game through word of mouth. I'd like to revise my previous statement and say that
initial sales are influenced by the prequel.
Maybe people and Josh aren't so wrong in looking at PoE2's problems, but it should always be tinted by how 1 went wrong. PoE2's problems do include a very, very, very weak start (just like previously), a main plot almost incoherent in context and absolutely trivial, factions somehow still being bare-bones despite having more content, poor technical performance (incl. very frequent loading), abysmal writing (the writing team do simply seem incompetent), perplexing ship combat, small maps, a character system that has a myriad problems of its own, I'd say poor replayability due to a variety of issues, etc. etc.
What I DON'T believe are problems - the setting, being a direct sequel (it's a stupid decision nonetheless), DLC policy, the art direction, wokeness, moment-to-moment gameplay (in the sense if every encounter is taken in a vacuum with no relation to the other encounters).