Well, I guess one thing we havent talked about is SNK - we're mostly talking about how players will react.
If we look at KOF98 > KOF02 > KOF13 as games that have lasting potential, effectively SNK is wasting resources on around 2-3 games each time before getting things right. (and each of these games are fairly true to the basic KOF style, unlike those that have strikers or tagging or whatever.)
Why not spend those resources improving these core games themselves, rather than experimental sequels that noone ended up liking? As people say, there's already a glut of FGs being released.
Would the KOF franchise be better off if SNK continually improved the features of KOF13, ported to more systems, etc, generally keeping it on people's radar? After all, SNK (and japan in general) are pretty far behind in terms of technology. I would like to see much more effort made on netcode, lobbies, replays, multiplayer features, offline tournaments, etc.
Or can KOF only grow and grab people's attention with more (possibly inferior) sequels?
(You can tell I don't trust SNK to consistently make great games - they seem to happen by accident mostly.)
While 98, 02 and XIII are currently considered the best entries, that's not to say that the next entry will be worse - and that's not to say that all the other entries were failures. The only ones I'd consider failures are 2001 and XII. I still have a lot of fun playing 96, 97, 2000 and especially XI (I honestly prefer XI over Vanilla 02 by a country mile).
What if XIII ends up being to 97 what XIV is to 98? When 97 came out, that was easily the best at the time - thank God they didn't decide to just end it right there and not come out with 98, eh?
Also, I don't know about the whole Japan being behind on netcode thing. Doesn't Mortal Kombat 9 have pretty awful netcode? Doesn't Soul Calibur V have some of the best netcode and net functions?
It's enviable that you are going to see some subpar games before you get the one that truly shines. Without 2001, we wouldn't have 2002. Without XII, we wouldn't have XIII. There never would have been a Third Strike without New Generations. Mahvel 2 needed MSHvSF to get to where it got. Sometimes you gotta make a shitty game as a stepping stone for a great one. It's just the way the industry works.