First off, Xen Online began their beta tests in Korea some time after RO launched in 2002. When the game eventually launched as free-to-play in 2007, something quite interesting happened back on RO: the game went free-to-play as well. This was a natural part of competition between companies with similar products, so it's only normal that GRAVITY would try to fight back DNC Entertainment. Honestly, they would be foolish to keep RO pay-to-play in the face of XO's free-to-play status. Especially since XO attracted quite a few RO players over.
However, GRAVITY didn't stop there. In 2008, they began work on RO's Renewal, which changed around a lot of the mechanics in the game. RO had only been out for about 6 years and suddenly GRAVITY decided that the game's algorithms and systems needed a drastic overhaul. From what I could tell, XO simply had a much more modernized UI and practical features such as monster HP bars and money banking, which RO lacked greatly. In terms of content, RO already had XO beat in that regard so why the need to change so many of RO's mechanics all of a sudden? All that was really needed to be done in RO was update the UI and make the UI's design consistent. Did XO pull that many players from RO for GRAVITY to get panicky?
Oddly enough, DNC also did an overhaul of XO as well for some reason around 2010/2011. Given how far ahead in UI practicality XO is compared to RO, all XO really needed was content updates. So it's very weird for DNC to feel the need to change everything in the game from the graphics to the mechanics. If anything, they should've focused more on advertising if they weren't getting a lot of new players coming into the game. From what I could dig up, DNC only released XO to a scant 7 countries during the game's 7 years of life, compared to RO which launched in at least 10 countries in the same amount of time. Why did it take so long for XO to be launched in each country? (Not counting China since the game didn't seem to even make it to commercial launch there.) Was the reason due to the publishers wanting extensive localizations for their version of XO? Or was it because of DNC's ineptitude to getting XO distributed globally? We may never know.