Oh they obviously make more money out of those IP than they invest. And some IP’s are rather good. However, suing competition also means the market is so small, it is worth fighting them on the legal path, which actually proves my point.
Same for Assassin’s Creed, Black Ops, etc. It does not mean they get bought because they are good. It means there is nothing else to play. For Pokémon there is actually a good example how to create this healthy competition - it is called Palworld.
A game does not sell just because of art or the IP. So I like that there is competition. Would suck for Sony if the copy had better code quality, a better story, more content than their games at half the price.