Thanks for the response. Unfortunately, it was Blizzard’s only mention of pet battles during the whole time of Alpha, and the part for the biggest concern (a lack of NEW BATTLING content) was not helpful at all. “…pet battle content will be available…” is such a general phrase that it could even be about existing pet battles.
With almost nothing happening during Alpha, it feels like you’ve already passed most steps of iterating, and does it only sound weird to me when one of the first ideas to solve (?) a lack of interest in the battling part is to lower the number of new pets capable of battling drastically? Or is the iterating part really just about methods to obtain pets, and everything battling is on hold for now?
I apologize in advance if my wall of text is confusing, my sections make no sense, I make weird jumps, or my written thoughts end abruptly. At some point, I had to come to an end, even with thousands more thoughts in my head. 
Current state of TWW
- 2 more pet additions planned for 11.2.7 for Winter Veil and Shadowlands Timewalking vendor (both can battle)
- No new pet battle content since 11.1 was launched (no boss pet fights, no tamer fights, not even wild pet battles in the new zone K‘aresh)
Current state of Midnight (up to Alpha Build 64228)
- 75 potential collectible pets
- 57 of these 75 pets are flagged „Can’t Battle“ (since MoP we only had 39 „Can’t Battle“ pets overall in 13 years)
- 18 of these 75 pets have six abilities assigned (8 of the 18 are unused pets from DF/TWW that already had a moveset)
- There are no signs of new tamer/boss pets (with only 3 abilities) for Pet Battle WQs, or a Family Battler achievement in Midnight zones
- 22 of these 75 pets we’d consider wild pets (21 of them required captures for the „Midnight Safari“ achievement) are categorized as „Peaceful Pets“, flagged „Can’t Battle“, and no longer list „Pet Battle“ in specific zones, but instead „Discovery“ in their source info
- Neighborhood (Housing) & Trading Post activities require pet battles in old zones
- 3 Family Battler achievements (players‘ max-level pets against very old tamers; many of them not even using max-level pets)
- AFAICS, no changes to the 1-click-capture and its issues since we experienced it for the first time
- Zero mentions of pet battles in the development notes („changes will continue to come with future Alpha builds“), with Alpha finished yesterday, we only got more pets added to the files, and a new filter for the Pet Journal
Less engagement in pet battles
I‘d really love to know on what time frame and observations this is based. Considering that the last pet battle content (incl. wild battles!) was added in 11.1 „Undermined“, and nothing but 1-2 Traveler’s Log activities every month required battling since then, it doesn‘t necessarily feel like the players decided to engage less with pet battles… we didn‘t get any „carrots“ so pet battling was just a personal decision to maintain our roster.
Prioritizing „Peaceful“ content
I don’t understand why a „lack of interaction“ with the battling part immediately leads to changes that‘ll have such a massive impact on the collecting+battling combo. Only adding abilities to a minority of the planned pets feels completely wrong when the goal is to make players engage more with the battling system. And even worse for newcomers and returning players, because everything we see about battling, right now, forces us into old content, which is not a thing we pay new expansions for.
When you see that people no longer enjoy driving a car when you slashed most of its tires, it feels so off when your first idea to change that is to remove the engine. It‘s very unlikely that this will have a positive effect when the lack of new pets with abilities alone lowers the need to battle (with barely any pets to level, and that‘s before we run into that whole lot of nothing regarding new battling content and the pet battle supplies that would come with it, which also throws everyone back into old content).
What felt good, what felt wrong (personal opinion on some examples)
What made players return to Pet Battle Dungeons? I would love to say the story, but we saw that in our first run, so probably the barriers to reach later fights and of course, the rewards. When pet battle dungeons worked with reward bags, people started to ignore the feature very quickly and instead bought the pets. When we got the dungeons with weekly currencies and the rewards on a vendor… players were more “tempted” to return and battle for a foreseeable number of weeks. The balance between available currency, time investment, and pets available was fine.
- Celestial Tournament: Currency with a vendor, encounters changing weekly, back then, only a small roster with a chance to fail with Healing between fights „disabled“. 10 weeks to get the currency for all 4 pets, then probably ignored… until we got the Elekk achievement, insta-revived „dead“ content.
- Emerald Dream: Two ways to acquire one set of pets (Seedbloom vendor and Emerald Bounty loot), Dream Infusions for another set of pets. Felt fine.
- Whelp Daycare: When done with the storyline, kinda soon most Dailies were too much effort for the amount of rewards (e.g, compared to a Pet Battle WQ), and unfortunately, pet battle wasn‘t included.
- Pristine Ka’ja Cola Cans: Felt absolutely fine when a player hit the Renown to unlock them.
- Miserable Mechanica: If the currency acquisition hadn’t been that horrible, this could have been fine. But combined, the time investment for the amount and costs of purchasable pets felt extremely bad.
- K’aresh „Ecological Succession“ Wriggling Pinnacle Cache: 12 pets and 1 mount from a source limited to be available once every week. No bad-luck protection (half of my drops were duplicates), no alternate source. Suggestions to replace the drops with a currency and put the 13 items on the vendor, like in Emerald Dream, have been ignored. Makes this another horrible acquisition method, 13 weeks minimum, a lot more based on the number of duplicate drops (even mount duplicates!), with patch releases aiming for an 8-week cadency.
Look into other features of your game. What drives players to return to raids, dungeons, delves, or their Spark Weekly week after week? Which parts can be transferred in some way into pet battles?
Does a raider return to a cleared raid? Very likely, because they still aim to get specific gear for specific slots, tertiary stats, upgrade currencies, better parses, etc.. At some point, they switch to the next difficulty tier and repeat.
Do we have a similar „progression“ in pet battle content? Barely any. Pet battle dungeons had a Normal and a Challenge Mode. Tamer battles offer a short-duration difficulty increase with Family Battlers, but that’s about it. So we need other carrots to keep players interested.
Replayability
The one example I could still spill tears about is the PvE encounters added for the „Abhorrent Adversaries“ achievement in Shadowlands. These boss pets were fun, had surprising mechanics, deep-thought synergies between ability usage, stats, buffs, and debuffs… but when the achievement was completed, players never got a reason to repeat them, if not for the fun. Fantastic ideas, nice work, just insta-burned because of a one-time use.
For the Traveler’s Log, you send us out into the whole WoW world to pet battle, but only once a month. Why not expand this to weekly or even semi-weekly tasks handed out in some sort of Pet Menagerie? The hubs we had were almost only there for vendors or a spot for Manapoof (I guess everyone was wondering why we had a battle post in the BfA hub). I could imagine some sort of return of „Defeat these Zone X PvE encounters with Aquatic“, or a „Win X pet battles in Midnight zones“, etc., for a semi-weekly quest to grab an Ultimate Training Stone, a significant amount of pet charms, or whatever carrot, because that‘s what most people need to engage with content.
A more recent one, C.H.E.T.T. Lists: We could find a pet battle-related task on them every week (more often with C.H.E.T.T. Cards), and this way, pet battles were connected to the gear upgrading system, IIRC an absolute novelty, but IMHO you missed an opportunity there.
This shouldn‘t have been about capturing 5 Undermine pets (at some point, players are capped at 3/3 in their collection and would have to delete pets, which is awful for breed hunters) but instead about winning 3-5 battles. Together with the fishing task, this C.H.E.T.T. List task balancing issue probably made them the most avoided tasks, and I wouldn‘t see it as the players‘ fault. But that‘s what your statistics would show for this particular thing: People didn‘t engage in pet battles and fishing.
What could be done?
Family restrictions to pet battles (like Family Battler achievements) seem to be an easy way to extend engagement in pet battles. When we had to defeat a dozen of them, barely any adjustments were needed when we were no longer required to beat every single one with every family (talking about almost impossible match-ups). Recently, the enemy pets‘ difficulty massively dropped with tamer pets no longer being epic/legendary or having Boss/Elite passives, and the number of required PvE encounters dropped as well. This difficulty decrease opened these achievements for a bigger audience, but also removed the need to hunt/level specific pets/breeds.
It was suggested before, but you could use „affixes“ like these to change the feel of pet battles regularly, e.g., we get more XP in a pet battle when we are only using pets of a family specified in a given week.
And it doesn‘t have to end with family restrictions, because you could add other affixes like weakened healing, increased damage, initial shields, or whatever, but of course, that would take some effort.
Be brave! You never had concerns about putting pets into content that pet collectors probably disliked or couldn‘t engage with (Mythic raiding, Honor, PvP WQs, expensive promotions, etc.), so why so afraid of the opposite way?
I’ll never forget the outcry when one-time pet battle quests in Nazjatar and Mechagon were rewarding reputation. If you‘d tune that reputation (or whatever valuable non-pet-supplies reward) down to not being as „impactful“ as back then, people who are eager to get it would probably consider pet battles, a lot of players did back then.
If at all, we need(ed) ways to lower the hurdle for those wanting specific rewards that require pet battling, not trying hard to never again collide with other parts of the game (with Valorstones/reputation from C.H.E.T.T. Lists being an outlier), and hiding it more and more in its own bubble/niche.
Similar to others, I wouldn’t call myself a collector for the collection part. I maintain my roster for existing and upcoming pet battles, and with what we see right now, this would be gone, and I’m glad I didn’t pre-purchase Midnight with no clue of what was going to happen to my favorite content. I don’t care about showing off mounts, they bring me from A to B. And I don’t want my pet battle collection to end as a second version of that, with even less functionality and visual “impact”.
what Amayita said.