I'm 40 - and my guess is I'm still among the youngest posters on OGR - despite having been on the forum since my early 30s.
I believe Nostalgia is the biggest weakness of S scale. From 1966-2002, the only American Flyer trains that were produced were to meet the desires of nostalgic collectors - not the Millennials and Gen X who were children at the time. At this point - American Flyer is a moot brand. It appeals to a small, dwindling nostalgic audience. There might be a few younger people who are interested in AF - but as the numbers dwindle, so will the availability of used product increase.
Bingo. Nostalgia only goes so far. Does anyone seriously think that 3-rail O would be where it is now if MTH hadn't gone independent and essentially force Lionel out of endless reissues of Postwar? Now, I will give Lionel/Flyer its due, they have offered some new product that breaks the postwar mold, but they still tend to fall back on Gilbert nostalgia. I reason that from their wheelhouse, that appears to be where the market is. Fancy electronics only adds so much to 60-70 year old designs.
But even with new products like SD70's, how many times can you reissue them without any appreciable market expansion.
Gen X and Millennials witnessed the development of scale trains - with HO emerging as the most popular of gauges / scales. In recent years, HO has continued to gain ground while others have suffered - stuck relying on nostalgia and a dying market. Meanwhile, up-and-coming HO companies - like Scale Trains - have popped up and brought advanced products to market with significant success reaching Millennials and Gen X. This is where the future of the model railroad hobby lies. This is who S needs to appeal to - not only to the buyers, but to the companies producing.
Scale trains is still the big unknown. It looks like we won't see any of the former SHS/MTH Showcase Line until late 2022-early 2023. Scale Trains' reputation may be of benefit, but we'll have to wait and see. Trouble is, new folks don't want to wait.
S scale needs a philosophical shift. It's not American Flyer. It can't be. Not anymore. S needs to become the scale that potential HO buyers go to when they want something bigger - whether it's because they want more "heft" or their eyes or tactile abilities are failing - it needs to be that step-up from HO. HO+. That's why I'm interested in S - and I imagine if you asked others like me, they would offer the same answer.
Unfortunately, just as O can't escape the Lionel name, S can't escape the American Flyer name. Even when one says American Models, you can just about see the "thought balloon" above folks heads thinking American Flyer.
Scale Trains involvement is a good sign from the HO camp - but S needs another major HO player - ideally one with a large investment in locomotives - like Broadway Limited Imports - to identify the value of having a larger scale than HO that their current clients could upgrade to - or age into.
I don't think any current HO would be willing to "take the plunge" without being able to purchasing an existing line to minimize the investment. There's nothing out there with a "For Sale" sign on it right now and with the passing of Ron Bashista, the family as stated they intend to keep running the company.
Probably about the only company with sufficient resources to take a gamble on S would be Bachmann.
If there's ever going to be new products, it's going to come from upsizing existing HO. They have done the research already - from there, the cost is in Tool and Die. They have built in audiences in HO - who they could convert to pay for those tooling costs. And if you read most S Scale threads - on OGR and other forums - most posts are complaints - and they are always the same - there's no products. IE: There is a demand - if the right people produce the product.
Well, Lionel has successfully scaled down U33C's ES44's, SD70's, Challengers, Y3's, and the cylindrical hopper from O. The Pacific's and Mikado's don't count, they came out before Lionel had O scale versions of these USRA locomotives. It can be done. Why they pulled the rug out from under the 57' mechanical reefer I'll never understand. That car had potential.