There were two major problems with knack that kept it from taking off.
1) The tone did not match the style. Seriously if you showed me some promo image and asked me to guess i’d say he’s some semi mute protagonist like crash, with a quirky scientist creator and his edgy funny son that treats knack more like a bro than an experiment. Off to fight some evil goofy goblins in some harrowing levels. Instead knack has the personality of a mindless soldier and everyone just orders him around and he’s just all “affirmative” and the conflict with the goblins seems ripped straight from a boring military drama.
2) The levels lacked hazards, nearly every fall was just a small drop loop around and try again. Didn’t really incentivize playing well, and made it boring.
The sequel fixed issue 2 in a really cool way, but issue 1 was still there and the damage from the first game was already done.