It was not promoted in any way and the franchise was declared dead immediately following the release. No merchandise, no more featuring Blinx as the Xbox mascot or even a guest appearance in the background of a puzzle game etc. They've basically denied his existence ever since.
Apparently there were plans for an anime, but nothing more than a pitch and possible some pictures (still not released to the public) were made.
Come to think of it, Klonoa hasn't had an actual new game since 2002, they still have a dedicated fandom, so what's keeping them from making one?
I'd also love to see a REAL sequel to Another World as they originally planned, not the shitty lets-not-mention-its-name-here which wasn't made by the same team. Lester Chaykin still lives!