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The argument that there's "too much competition" has no merit.
Because it's a marketing issue and nothing else.
You must consistently promote your mod and promote it often AND it must be well polished and fun to play.
It used to be that you could make a mod and post it online and you'd get a bunch of players.
Now, you actually have to TRY and get attention.
But with the internet, is it really that hard?
No. You just have to do it more.
Also, if your mod project fails, its entirely your fault.
Not your lack of funds, not your team, not your computer, not your mom or your ex girlfriend.... only you.
For every person who fails I've seen another who takes the time to develop THEMSELVES enough to know how to handle a problem that comes up.
If nothing else, elance.com is your friend.