You know, is always funny when people act like Pokémon never had any competition, it does have it, is just not comparable because of the size of the franchise, even if something competes well against it as a videogame, that's just a small part of what Pokémon is, people expect stuff to release and become massive multimedia franchises right away to call it "competition".
If we just look at games, there is a lot going on in recent years when it comes to monster collecting, Digimon Survive, Monster Hunter Stories 2, Temtem, Shin Megami Tensei V, Yokai Watch 4 (even if it is dead in the west now), the just released Dragon Quest Monsters the Dark Prince, and a lot of smaller stuff like Monster Sanctuary, etc. Stuff like Persona and Yu-gi-oh! also have a big focus on collecting monsters, but they are distinct enough to rarely be compared.
Palworld gets a lot of free marketing by its premise being funny and the designs being close enough to Pokémon to provoke discussion, it doesn't even need similar gameplay to be compared to it despite that, if they do things right they could easily get away with its lazy designs for a while, improve the game overtime and keep going strong, but it isn't very likely to be the kind of competition lots of Pokémon fans seem to be waiting for.