Well, from what I've heard, Game Freak/Nintendo were not threatened at all by the Palworld hype.
For numerous reasons, like that Pokemon is already a massive thing (not ony video game), that they sold way more titles on the Switch (while Palworld sales are already slowing down) and many other reasons.
The fact that Palworld sold 10 Millions copies in few days didn't threaten Pokemon's name at all, and it isn't a good enough reason for them to put more effort into their next Pokemon titles.
It's very sad, but it's also reality, so reality is very sad