The surprising popularity of Youkai Watch has probably been a  surprise for everyone this gen. The game keeps selling really well in Japan, and it doesn't seem to be slowing down, at the contrary. It's even threatening the dominance of Pokemon as the monster-collector champion, a position it has hold since 1996.

Pokemon this gen (main series, not spin-offs)

TOTAL 6.98+ digital numbers

Youkai Watch this gen

TOTAL  6.92 + digital

Even if we assume there will be a Pokemon Z or a Youkai Watch 3, which franchise will become the king of the monsters this gen?

P.S. When is YW coming to the west? Is this year or the next?

I'll go with Yokai watch

I expect level 5 to milk the tits dry with Yokai watch. I'd say yo-kai watch 3 and yo-kai watch 3.5 will win over Pokemon Z. But I question whether they can sustain this level of popularity for an extended period of time like Pokemon.

Youkai Watch, but only because YW1 gives that little extra boost.

Well if we dont just focus on the games but all of the products they sell I think Youkai Watch has the crown right now and will have for some time. The question is can Youkai Watch maintain its position like Pokemon has for all these years or will it be just another L5 multi media franchise.
Overall I think YW wins in game sales in Japan as it will likely have 2 more games then Pokemon on the console.

Hope for Pokémon, but probabily YW...

With an increase like that, YW

Youkai Watch

Probably Youkai Watch but like mii-gamer said I don't believe it'll be able to maintain it's level of popularity for years to come.

Pokemon eventually as I'm not convinced YW will stay as consistent, the former has been solid for almost 20 years now.