Is the game losing players rapidly?

[Atreides]

Don't underestimate the amount of people that play FFXIV solely as Final Fantasy game for the story. They contributed alot to the queues, however they leave once they've done all the casual content there is and come back at later patches.
Currently you can't create new accounts which plays a role too new players can't even start the game right now.

Also alot of WoW folks that started FF are undecided whether to stick with the game or return to the game they've invested over a decade of their time. Especially now with the Microsoft news and 10.0 leaks that happen they take that copium and understandably so, I wouldn't want my time spent on a MMORPG to be completely wasted either.

Other than that, people play other games in general in their off time, you don't always have to be online in FFXIV. Get your daily expert done, maybe raid which is also a fixed time if you run with a static. Neither beastman dailies nor relic quests are out yet so there is not much else mandatory to do.