Nintendo’s target audience is the mainstream casual gamer. That market has never heard of Palworld. Nintendo is doing fine they don’t care for the pc gamer crowd, since in Japan casual gamers don’t own a gaming pc. And with current hardware pricing and the weak yen the pc gamer market will barely grow in Japan.

Will never happen until people stop buying the games. And no it’s not the fault of adult Nintendo fans. The vast majority of buyers are just parents buying games for their kids who don’t read reviews and just buy the game because their kid nagged for it. Palworld doesn’t even really compete in that market.