I agree some games are less amenable to the merch model, but that is within the control of the game designers.
In fact, some games were designed explicitly to support the sale of merchandise. I think Rovio's Angry Birds and/or Seriously's Best Fiends used this strategy, but I can't find the source, now...
Apparently Garfield is a cartoon that was created solely to sell merchandise. It's quite blatant: https://youtu.be/1ei_eNTmCsU?t=33
I don't see why the merch strategy can't be applied to games, too.
Japanese releases:
Game: early 1996, second late 1996
TCG: late 1996
TV series: 1997
movies: 1998
At this point, I think it’s more about IP and who your target is. If your target is general audience/kids, you could probably sell a whole variety of merch, even if it’s not directly tied to the game. But if the target is hardcore gamers (collectibles, exclusive t-shirts, memorabilia, etc), the market seems smaller.
Pokemon's merch revenue completely dwarfs game revenue: https://youtube.com/clip/UgxvU_ygdejMiTGyChN4AaABCQ
Merch is great because it allows "whales" to spend as much as they want without the questionable gambling aspect of loot boxes/gacha.