Answer this question: if you were developing a sample library to be sold to costumers, which platform would have the most costumers and therefore a much larger pool of potential buyers?
That's the one you develop for. And that's why that one gets and stays bigger.
What is starting to happen is that some companies like Cinematique, Sonuscore, and Soundiron are dribbling out libraries for HALion AND Kontakt. But there are only a handful of instruments so far. It's a droplet in the Kontakt ocean. It would take decades of this to make HALion be as successful as, for example, Falcon. Forget about catching Kontakt. That's not going to ever happen.
The big problem is that most of the instruments that come bundled with HALion are not on the level with what's available with Kontakt. If they were seriously interested in breaking through, they would put some things from Iconica and their excellent electric bass library in. They have to either hire top people to sample for them or BUY libraries from other companies. Don't offer them as paid soundware, there has to be quality inside the bundle that comes when you buy HALION. A reasonable amount of high-quality content would push HALion over the top, because it is such a great sampler and has so much to offer without that.
Also, they should make more flex phrases, but according to Steinberg's Greg Ondo, that is something that is not going to happen. It broke my heart to hear him say that. I love the Flex Phrasers and made a video about them. The Flex Phrases are something that no instrument has except for the hardware Montage and Motif. If they would create some flex phrasers for modern musical genres, they would sell a ton of copies of HALion. They have one of the best cars in the world, but don't want to make gas. There is zero interest on their part. They are following this path of signing up a handful of instruments, which isn't going to put HALion over the top.
Any instrument, bundled or third-party, is supercharged when you load it into HALion because of the FlexPhrases. If they upped their game with more FlexPhrases, they would interest a lot more of the top third-party people to get involved. Show them how their libraries would be transformed. Demonstrate it in videos.
Sadly, I think that Yamaha/Steinberg doesn't know what to do with HALion. As they can't figure it out, they are treating it like inMusic treats AIR and SONiVOX. They just have sales where they devalue it by basically giving it away. That creates a permanent dead end. This is ridiculous when they have such obvious, easy paths to make it an instrument that people would happily pay full price for.
I agree with
@olmerk The potential is enormous.
Anyway HALion is not in competition with Kontakt. It is much more comparable to UVI's Falcon. And Falcon kicks its ass in the content department.