Fiji, who have won two sevens World Cup titles and have finished in the top four at every sevens world series since its inception in 1999/2000, won just one game at the Wellington tournament on Friday, beating Portugal 24-7.
They lost to Australia and Scotland in Pool D to finish third. The top two teams in each pool progress to the Cup competition on the final day.
Fiji will be forced to play the United States in the Bowl quarter-finals instead. The most points they can now take from the tournament is eight. The Cup winner earns 22 points.
Since 2009, when the sport was included for the 2016 Rio de Janeiro Olympics, the IRB has attempted to improve the standard of play and broaden its depth, with promotion and relegation from the world series being incorporated for the first time.
"Promotion and relegation for this year is really exciting and why you are seeing what you are seeing (in terms of the results)," IRB tournaments manager Beth Coalter told Reuters.
"It's really trying to open the series up and try to get them into (it)," Coalter added. "They need to have international competition.
"The regional tournaments are getting better. The standard now is going to increase across all of the six regions. Look at the standard of play from Portugal and Spain (in Wellington)."
The bottom three of the core 15 teams at the conclusion of the penultimate round in Glasgow will be forced to playoff for their places for next year's series with five qualifiers in an eight-team competition at the London tournament on May 11-12.
The IRB have also implemented regional tournaments, with the winners of those earning invitations to the top-tier series tournaments and the opportunity to play in London for a place in the world series next year.
The Fijians' failure to advance to the Cup section of the tournament was not the only upsets of the sport's heavyweights on the first day of the fourth leg of the series in Wellington.
The U.S. drew with England 12-12 in Pool A with a last minute Maka Unufe converted try before they pushed series leaders New Zealand all the way.
The 10-times world series winners overcame a 5-0 deficit just as the half-time hooter sounded with Tomasi Cama scoring under the posts, which gave them a 7-5 halftime lead.
The All Blacks Sevens eventually won 17-10 and will play Australia in the Cup quarter-final.
Kenya, who have produced the occasional upset during the series throughout the years, also went through Pool B unbeaten while the heavily favoured France, who had been second on the series standings before Wellington, finished third in the pool.
Kenya will now meet South Africa in the quarter-finals though their results did not surprise Coalter.
"Kenya have had a lot of changes, they've been in the series for a long time and they're now taking it very seriously," she said.
"They're very strong (and) they're ready to win a tournament."
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