What preexisting need did Original Dungeons and Dragons fill? What about Vampire - The Masquerade? What about Starfinder? What about Edge of the Empire?
When it comes to product design there are very few instances like Pathfinder First Edition or Dungeons and Dragons Fifth Edition where there is a market already sitting there waiting for you. Often you have to show people something they have not seen before and never knew they wanted until they see it. The answer to where is the market is that they are attempting to create it.
They have created a meaningfully differentiated game that is fun to play designed specifically to tell the kinds of stories they want to tell. When you open the spine of Pathfinder Second Edition you see a piece of fiction that portrays the iconic heroes holding off undead hordes empowered by The Whispering Tyrant. There is a specific call out to the death of Aroden, God of Prophecy whose demise started The Age of Lost Omens. The games introduction starts like this:
Pathfinder Core Rulebook said:
Pathfinder adventures take place in the Age of Lost Omens, a perilous fantasy world rife with ancient empires; sprawling city-states; and countless tombs, dungeons, and monster lairs packed with plunder. A Pathfinder character’s adventures might take them to forsaken underwater ruins, haunted gothic crypts, or magical universities in jungle cities. A world of endless adventure awaits!
I also find this telling:
Age of Lost Omens World Guide Back Cover said:
The god of humanity is dead and prophecy is broken, leaving adventuring heroes like you to carve out your own destinies out of an uncertain future!
Uncertainty looms large over Pathfinder Second Edition. The game has been fundamentally restructured to be focused on risk vs reward. Everything you do has a range of success that dramatically shapes the outcome of the narrative. Spells have been made more uncertain. You largely cannot build characters to auto succeed anymore. Secret rolls are used to create a fog of war that mirrors the uncertainty of the characters. Many spells have become rituals that have significant consequences for failure.
While it is very modern in some respects in a lot of ways it rejects many modern "advancements" in favor of the primordial history of Dungeons and Dragons. Wizards are definitely Vancian. Fighters are better at fighting than other martial classes. Class features make it even more Vancian. It utilizes B/X style exploration turns and secret rolls. Its new Bulk system doubles down on encumbrance. It doubles down on Alignment, even adding specific Anathema to some classes. Some spells can only be acquired through adventuring. Long term consequences like poisons, diseases, and curses are common. Monsters are designed like puzzles to be solved. The roleplaying advice for classes in the Core Rulebook suggest that a fighter might build a stronghold, a rogue might create a thieve's guild, a wizard might start a school, and a cleric might establish a temple.
It cares about more than adventuring. It is a game that cares about what you do outside of your adventures. Many classes have specific ties to the world. Your first level fighter might hold down shifts as a bartender when she is not fighting monsters. Your wizard might track down Uncommon and Rare spells to add to their spell book. Your ranger might seek out a mentor to learn a unique technique. You might be part of an organization. You might cast rituals that require the assistance of secondary casters that you need to track down. The game makes it clear that it is about the individual stories of the player characters as much as it is about the adventures they go on.
Lost Omens looms large. It's telling that the majority of the supplemental content we are seeing is heavily stepped in the lore of the game. It's not just for reading either. They want player characters to become part of the setting and actively engage with the world, its organizations, and gods. There is a lot of embedded story in the archetypes available like taking your Hell Knight Test to join an order or how the Living Monolith needs to undergo the Ka Stone Ritual. Gods and Magic will have rules for divine intercession. They intend for The Age of Lost Omens to be an active part of your game if you so choose.
So none of this was something I was like looking for, but I find it very compelling. That's the bet - that people will find it compelling. They have done a year long open play test and significant focus group testing with new players. They are absolutely taking a risk, but I think they kind of had to. Pathfinder had fallen to #5 on the icv2 charts and was bleeding off sales to Fifth Edition. They had to do something.
Really the underlying question here seems to be why didn't they just start supporting Fifth Edition? My guess is they see more potential in what they have created. I am also going to guess the other answer is that they just do not want to. Paizo is a company that is largely run by creatives who have a strong vision of their setting and the types of stories they want to tell. It is easy to forget that the creation of Pathfinder First Edition was motivated as much by being dissatisfied by the narrative structures of Fourth Edition as an analysis of market needs. They might feel the same way about Fifth Edition.
I mean so far they have definitely reclaimed the #2 spot and sales look pretty good. They aren't competing with Fifth Edition, but I do not think that was ever on the radar. They are building their audience and regrowing the brand. Time will tell if their risks will pay off. I do not think we should be shaming them for attempting to innovate and create a compelling new experience that is more compatible with the stories they have always wanted to tell.