I think it's simple. The Toys to Life genre quickly got old. When Skylanders first came out the idea of having your toy show up in the game was an intriguing and cool idea that appealed to many people. However, once that magic went away after a few years it just wasn't as intriguing anymore, and I'm sure many people including parents were fed up with buying new toys every single year and I don't think Skylanders did a good job of trying to market these toys as being worthwhile outside of different movements. I also feel like Skylanders shouldn't have done an annual release model, people got fed up with buying new toys every year and it didn't help that there were other toy to Life competitors adding onto that saturation like Disney Infinity and even Amiibo.
So for TLDR, people just got tired and over the toys to Life concept and didn't wanna spend more on toys every year.
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