I can't predict the future, but I do think the change in audience expectations is (slowly) starting to affect pokemon. if it wasn't for Pokemon Go, then SM would have been a good bit lower than where it is.
with kids being the leading audience, one look at what kids are playing and we can see why Pokemon may have a problem in the future if Game Freak doesn't adapt. a thread by Mat Piscatella on twitter goes into what GF could start leaning towards. while a lot Pokemon's appeal is online trading and battling, I do not believe it's the sole major reason and can stand from improving elements of it's core gameplay loop that doesn't involve battling and trading in a way that can greatly expand the audience
This contradicts the proposed arguement because the proposed argument makes minimal sense in the first place. The production values of the story has almost nothing to do with Pokemon not selling more, story focused single player AAA games outside of few outliers are on the decline that's why there's the current push to games as a service. Pokemon doesn't have to increase it's budget/production values or anything of the like that to become a games as a service. In fact they could gut the story section entirely like CoD did and replace with a service based gameplay loop, which would likely result in complaints from those wanting Pokemon to be more like modern AAA single player games.
A lot of these arguments seem to confuse personal preference with profitable business moves.