It means SEGA knew their strength and weakness well. They didn't force to make their games go international when the market isn't promising.
For Japan, even until right now SEGA is still maintaning arcade trading card games too: Sangokushi Taisen, Sengoku Taisen, World Club Champion Football (WCCF), and KanColle Arcade.
And of course they're not interested in localizing it to the west making the since arcade is dead in the west.
Not all SEGA arcade trading card games were successes though.
There were Soul Reverse that's shut down in 2018 and then Chrono Regalia and Code of Joker which were shut down in 2019.
https://www.youtube.com/watch?v=M3ZugJi7sDc
https://www.youtube.com/watch?v=jWJL3QWVFNI
https://www.youtube.com/watch?v=qTsYyoW57iA

Soul Reverse gives me Dark Soul vibes.
But, do you think Sega has a chance making a TCG for international release? I mean, they probably won't due to the juggernaut that is Pokémon TCG, but you'd think they would've tried an international TCG at some point.
Well,
they did, but it was mostly a novelty with a limited market, which didn't last long.
These are all good but kinda too late if they're to be implemented.
For example, I agree Chao Gardens are already Chao' strong point.
But that was back then, many games are already surpass it right now including Tamagotchi mobile games that recently has colab with SEGA's Colorful Stage.




Yeah, most of Chao Garden-like games are in Japan, but if it couldn't beat Japan market, it'd be hard to propose the game to the higher-ups.
And sadly NFC cards for mobile gaming were never widely popular, though many companies experimented with them to bridge physical trading cards with digital mobile apps.
Survey said the new generation of gamers didn't like it, saying tapping physical cards on a smartphone screen or back reader felt clunky compared to pure digital microtransactions.
They prefer to have digital cards on their smartphones.
I know, as I said, if Sonic Team were to went hard on Chao after Dreamcast-era, than just letting them be minor characters to the Sonic franchise, perhaps like Rabbids, spin them off into their own game series, I truly believe they would've been a genuine contest with Pokémon.
Sega could've done a lot with chao...

However, similar to Half-Life 3 fans, there is a sizeable portion of the Sonic fanbase who are still hoping Sonic Team will release a "Sonic Adventure 3" or, the very least, remakes of SA:DX and SA2B. If Sega were to decide to make a Sonic Adventure 3, then (while it won't put them on par with Pokémon) Sonic Team could renovate Chao Gardens and chao gameplay to be more engaging.
As I mentioned on my fancy table-graph, I find that an advantage and strong-point Chao have over Pokémon is that they're treated more as virtual pets than battle-monsters. And that "Chao Adventure" was still a popular, portable way to take your chao on the go.
If we were to get a "Sonic Adventure 3" for Steam and modern consoles, I think it would make sense for smart phones to replace VMUs in this case, and I can imagine the new "Chao Adventure" being something like Pokémon Go. You can use Augmented Reality to interact with your chao, or use Augmented Reality to find hidden things, or, like in original Chao Adventure, use AR to see Sonic and his friends that may surprise visit you.
Chao Adventure had a rudimentary combat (mostly a roulette-like micro-game against "Bully Chao") and SA2B had Chao Karate. If not an adaption of MushiKing/Dinosaur King gameplay, then then very least a basic RPG battle-system for chao. The "
Black Market" could be wear Special Attacks or Combat Items are purchased, or Special Attacks be developed when you raise your chao.
I know I'm being a bit contradictory stating that Chao should be virtual pets over battle monsters, but its because of Pokémon, Digimon and other similar games that made monster battles popular, and that there will be competitive chao owners who want to duke it out with other chao. That and maybe if "Chao Adventure Go" had NPC Bully Chao or enemy encounters, then combat system may apply there.
But, I'd say Chao Racing is more Chao Garden's equivalent to Pokémon Battles. So perhaps a combat system can be forego entirely and all chao settle their disputes with races.