Astro Bot, Ratchet & Clank: Rift Apart, Marvel's Spider-Man games, Horizon games, God of War games and many others were fun and of quality.

If Pokémon is not in competition with PalWorld, why is Nintendo trying to sue them?

Nintendo does not make Pokémon games

Source: https://www.pokemon.com/us/legal/information

"Pokémon, Pokémon character names are trademarks of Nintendo."

So why mention the Pokemon company at all as "proof" that Nintendo and Sony aren't competitors?

Also... if Nintendo doesn't make Pokemon games, then Pokemon games aren't fun and of a quality and a gold standard for the entire industry, right?

Sony and Nintendo ARE in DIRECT competition! If you say they are not, what the hell is Astro Bot then?! Astro Bot is compared to Super Mario all over the internet. There will be meltdowns if Astro gets ported to the Switch 2. If MS makes money with their games, Sony will want their portion of the cake. Nobody is so stupid ignoring a 150 million+ install base, not even Sony (Lego Horizon). There are fights all over wich is superior. Of course not the same intensity what was Mario vs Sonic back in the 90s. But at these times NOBODY would say "Sega targets a different audience" so Nintendo is no competitior. For everyone that does not know: The history of this nonsense started in Gen 7 when Nintendo's Wii was winning against the PS3 and the Xbox 360 and when the DS was raping the PSP!

LOL sorry about this aside but haven't people been complaining that the Pokemon games should slow down releases to concentrate on quality?  I am not into Pokemon but aren't they made by Game Freak  (the co-owner of the IP) and just published by Nintendo?  I've bought them for the kids before and watched a few minutes of game play but never played one myself (With the exception of Pokken Tournament).

Yes they are made by Game Freak, not by Nintendo. 

The console market would be too small for three companies but large enough for two to coexist.
That is the answer.

Maybe but right now it looks that it will be Sony vs Nintendo (PS5 vs Switch 2) all the way. As MS is leaving the console race quite soon its questionable if MS does not develop a PC with standardisised settings (same GPU, CPU, RAM...) wich a nice design marketing it as a console. But should we really track its sales? Because it will get complicated then. Is the new Xbox a PC or a console? If MS makes a PC and market it as a console, had no optical drive but you can upgrade it, then the plastic case itself would have a longer life. Do we track the GTXidontknowwhat or SSDs sold to these PC/Console hybrid users?! I mean graphic cards are far away from a 10 year lifecycle so count together 2 or 3 generations? Not track XboxNext at all? Will it be only PS6 and Switch 2 then?