Typically, multiplayer games often fall for multiple reasons. Some players may have a problem with the community, or are just bored due to the lack of content. However, it can be both, depending on the player's experiences in the game.
Club Penguin hasn't had any content updates since 2014. By content updates, I don't mean Penguin Style or party items. I mean actual content that stays throughout your time in the game. Examples could include Puffle digging, or SoundStudio.
The content isn't the only thing, however. Today, the Club Penguin community is different. Back then, everyday when you logged on, appeared in the Town, you could see people advertising their igloos, 1-3 advertising bots, "rare" people sitting around, ninjas, and tour guides. It is much different than today. The community barely interacts with each other. Reasons for this include differences, messages not showing, and overall what the players do and how they act.
There are multiple games losing players and money. It's not just Club Penguin. Games such as Habbo, SAS4, and more, lose players daily due to the lack of community or content.
MORAL OF THE STORY: Go play ROBLOX kids.