I would also echo the comment that the long time frame developing Formation was an issue, but largely, a lack of market penetration would be an even bigger issue. Frankly, it will only ever be a niche product due to its relatively high price for a lifestyle product. B&O have been losing bucket loads of money in this high cost segment, so I guess B&W either saw it as being ripe for the taking OR felt that they simply couldn't afford not to be in the multi-room space.
It's tough going.
The traditional HiFi and home cinema market is declining and B&W are very much exposed.
At the bottom end of HiFi, many people are simply buying sound that is 'good enough'. Amazon / Google type products, maybe a sound bar, maybe from a traditional audio brand or most likely from a TV brand that has slapped a traditional audio brand name on the front (Panasonic / Technics, Samsung / HK, LG / Meridian etc). This will effect their Zepplin, 6 series speaker range... the bread and butter of B&W's range.
In the sound bar world, they've been out maneuvered in the mind of the customer as they don't offer the latest HDMI inputs, ATMOS / DTS:X etc. Whether a customer really needs that from a sound bar is up for debate, but so many people buy based on buzz words found on websites and not on in-store demos, so they are on the back foot in this market.
Headphones seems to be a nice area for them to be playing in. But again, it's not like the market isn't heating up with the likes of Apple and Sony really smashing it lately. Then there's Senheisser and Bose, let alone the boutique brands! True wireless earbuds? Yup... you NEED to be in that game these days.
Then there's the multi-room competition.
The biggest name in the game for the last 15 years (Sonos) doesn't seem to be able to turn a year-on-year profit. Apple, Google and Amazon can lose money for decades and eat away their competition... then there's the fact that B&W are one of the last players to try and break into the market. Sadly, their Formation offering doesn't offer anything revolutionary, I do like the promise of near-perfect sync, but is it enough? Well I don't see many people spec'ing it as part of a new home multi-room fitout, has anyone else?
Of course, it's VERY early days for Formation. It takes at least 2 years for most multi-room systems to find a reliable 'build' and up to 5 years to really gain some momentum... but is that quick enough for B&W to be happy with its ROI?