The thing is we have always had these competing related animes rivaling Pokemon. Digimon from 1999 , Beyblade 2000, Bakugan 2007 all competing franchises and franchises that are still competing yet they still haven't eclipsed the popularity of Pokemon as a whole. So I don't really see that as an issue as too why kids would not like it presently.Yes, it is. I have a young brother (8) and he watches Pokemon whenever he can! Even tho we don't have tv channel airing them and my complete database is only in English/Japanese!
I'm sure Pokemon haven't lost anything from their power, the problem is in the abundance of other anime concerning battles like bakugan and beyblade, even Naruto... Pokemon featured much more in the anime and still is popular among kids.
The toys from what I see at my store are coming and going great, so I have nothing to say that production is going down in merchandise either.With Pokemon being Nintendo's 2nd biggest franchise, even above The Legend of Zelda, I doubt the majority of kids don't know what Pokemon is. The only reason people suspect Pokemon is "fading" is because it was a fad years ago and nearly everyone was into Pokemon for a while. But the most important thing people need to look at is the sales of the main series games. Gen 5 broke sales records, which is a good sign that the games are still popular, with B2W2 selling also selling well. (And they've yet to be released internationally)
As far as toys go, there was a good long time that the Walmart where I live didn't carry any Pokemon toys. But they started again when Gen 5 started. I think Pokemon is still very popular, it just isn't a fad anymore.
My theory on the whole thing is the stagnation of the anime that seems to cast a shadow on the Anime for a large portion of the fanbase. Fans keep getting sick of seeing the same stuff over and over with little to no progression throughout the years. Kids still like it but the craz is not what it used too as its not the new thing out. There can also be the standpoint that they don't market the show as much as they do. So if there is less promotions on Cartoon Network or whatever networks they are broadcasted on its hard to get the word out on the show.
Now too answer the topic itself. I don't think Pokemon at any portion of the franchise is geared toward a certain audience. They try and appeal to anyone and everyone they can. For me it is the same as the rating on the game which is E for Everyone and I truly belief that across the board. I believe that I as a 22 year old can find just as much enjoyment as a 12 year old. Or my parents find enjoyment just as much as me. I still find the anime to be popular as I believe Movie 14 was the first movie since either Power of One or Spell of Unown to be shown in theaters so for me the franchise is either trying harder to push the show out there for audiences or the interest is heighten as of late. As for the shown determining if people play the games I highly doubt they have much bearing on if people play the games. I've played the games before the anime so for me kind of the other way around.