They chose a crowed release date schedule, Ridley/Fox were uncommitted to either a all out "alien" film or a prometheus sequel, so they alienated folks that wanted to see either one of those and the plot became bloated and bland due to that.
Also, film wasn't really innovative in terms of supsense/horror, which is what made the first one so successful. I think Ridley was right about (i think in an interview) was that the xeno at this this point is not that interesting/scary, too bad Ridley also mailed it in and was given too much control.