Besides the poor camera performance, perhaps the biggest complaint with the Essential Phone was the price. While the phone definitely had a premium design with a good software experience, the $700 asking price was a sore point for potential buyers. Now the phone is getting a permanent $200 price drop.
According to TechCrunch, Essential believes that dropping the price would help it better break into the smartphone market, which is obviously dominated by companies like Samsung and Apple. It's a common practice for startups to price their first products very low, even to the point of bleeding money, in order to gain an initial reputation and user base. For example, the Nextbit Robin was $399 when it launched, placing it alongside Nexus phones in terms of value.
It's also very possible that Essential is having problems selling the phone, but the company hasn't released sales numbers. The phone's camera app has 10-50K installs on the Google Play Store, so it's probably safe to assume the number of sold devices isn't much higher than that.
If you already bought the Essential Phone at full price, the company will send you a $200 'friends and family' credit that can be used with another Essential phone or the 360-degree camera attachment. More details on that are available here.
Best Buy still lists the phone for $700, and Amazon has it at $599, but Essential's site has the discount. There will be a price drop in Canada as well, but the new price hasn't been announced yet. Let us know in the comments if you would be more willing to buy the Essential Phone at the new lower price.