You know, what makes it even worse to me is that I can't stop making comparisons between Klonoa and Kirby (specifically Kirby's Dream Land, before he had any Copy Abilities and could just suck enemies and spit them out). Both games have a cute "dream" theme going on as well. So it's really sad to see Klonoa getting treated like this while Kirby is, to this day, a big moneymaker for Nintendo.
Like... what went wrong, exactly? Maybe the PS1/PS2 didn't have the audience the games were originally meant to reach or something? Lack of advertisement? I dunno...
Outside the dream theme, I don't see any similarities between the two franchise haha
Door To Phantomile sold pretty well, it's definitely a lack of advertisement that killed the franchise. They released a game on the WonderSwan (the namco portable system that failed). Then Klonoa 2 came out on PS2 with a miserable advertisement, so the game failed. Then they released a spin off about Beach Volleyball, on PS1 and only in Japan and Europe (why they did that is beyond my comprehension).
Then there's three games on Gameboy Advance. The first one being Empire Of Dreams, a platformer focused on puzzle (but there's still challenging platforming sections). The second is a sequel, the formula is the same, also a pretty good game. But the two games sold pretty bad. The third is a Japan exclusive action RPG called Klonoa Heroes, never played that one.
Finally, they made a remake of Door To Phantomile on the WII and once again, the advertisement was just non existant (many people including myself didn't even know that this remake was a thing until many months after it came out). Of course, the game sold miserably (probably one of the biggest failure ever for a huge company like Namco).
A lack of advertisement really killed the franchise and it's a shame because Namco had a huge potential with this franchise and all of Klonoa's games are great.