Megas made many previously unusable pokemon good again
Okay, but there's other ways to do that. Gliscor just got Toxic Spikes and it was banned, again. Megas don't make bad Pokemon good. They just essentially give them better stats or a more usable type or ability along with a fresh coat of paint. Regional variants do the same job. Buffing old Pokemon with new moves and expanding move pools also do the same job.
If you're going to give it a Mega, why not just give it a new evolution? Why isn't Mega Pinsir just an evolution of Pinsir? There's nothing stopping it from being so.
Are people really buying merch based off later gen games? I don't think anyone really cares about any Pokemon past gen 3 or 4 because I see more Pikachu and Gen 1 merch than anything else (I did see an overpriced Teddiursa pillow at a con).
Yes. They are. The thing about kids nowadays is that they don't play with toys or merch like they used to. They're more into games and screens and consume media at a mile per second. So yes, majority of kids played through Scarlet and Violet and gave it 0 thought ever again until the DLC came out. But yes, Pokemon is one of the few things kids will still buy.
Pokemon is also one of the few franchises in the world for children that's for the most part, completely untouched by the Woke Mind Virus. So for the parents that do have kids, it's a "safe brand"
for now. If Japan ever lets ESG into it's media and it creeps into GF, I promise you Pokemon would virtually die overnight.
That being said, GF's problems are pretty much solely rooted in management. The company's structure is too disjointed and that's why they can't get anything done right. They're essentially 3 companies contracting out work to 6 or 7 companies. It's been that way since Black and White 2. That's why everything they touch nowadays is so disjointed. You have some sects of TPC completely at odds with the other and their Chief Tard Wrangler can't effectively reign them in. That's why S&V is so rushed. The merch dept. wants toys on the shelves and they make the most money. They also don't give a rats anus if the game functions or not, they know you're all stupid enough to buy it anyway. Just stfu and buy your weird Meowscarda body pillows. The Executive Board knows they're essentially shooting themselves in the foot but can't argue with their numbers. So resources and time allocation have to be stretched thin. That being said, there's a reason Pokemon hasn't been replaced.
Pokemon already is the biggest IP on the planet and sure it rode those highs forever ago, but that's why it still exists today. Palworld cannot dethrone Pokemon. It never could. Digimon at the time was a better IP on virtually every way, shape, and form, and it couldn't do it. TemTem tried and failed. Every attempt to dethrone Pokemon has failed and will keep failing because the only ones who can dethrone Pokemon are GF themselves.