I'm confused, do people want endless sequels or not?

The lesson of Nintendo is yes.

Note that this is different in gaming than film because of technical progression. But also Nintendo are very good at "same charm, familiar characters and plot, different feel".

People will tell you they do not want endless sequels. Sales numbers will mostly disagree with them.

It's like phones with smaller screens: they always sell poorly in comparison when available and then it's all you hear about online when it's not.

The usual tricks of "noise signals how many are really upset in absolute terms, not the relative popularity", "people will still make noise about what they don't like regardless if that's more popular overall", and "people who hate one attribute of the product can often still like it enough to buy overall".

If Microsoft didn't want to use IP of existing studios, they should not have bought those studios. Why buy id if not to get more id?

Disney + Marvel offers a roadmap for extending existing IP. (Keep in mind that the Marvel acquisition was in 2009.)

Obviously people want sequels, that's why hollywood makes so many of them.

Its Microsoft - why not both?