I think you've hit on something there; basically in terms of a purely cinematic endeavour the films peak early. TF1 is about holy **** actual cars turning into actual ****ing real looking robots and fighting. You can maybe get one sequel out of not having to introduce them and having bigger fights with more robots. So there's limited scope of where to take the spectacular angle, and I think that's where the random different spectacle (Pyramids! Moon! Dinosaurs! Dragons!) comes in. Scaling back is an obvious answer but it's a risky strategy; we already know through simple ticket sales that Big Big Action is what made the films successful.
That said I think it was the *only* way to do it as a film franchise. It's Transformers' USP. I mean, if you name the best Transformers stories how many of them actually feature a huge amount of transforming, especially with the wow factor of real life present day vehicles rather than abstract 'Cybertronian' vehicles? Last Stand, for example - how many transformations are seen and how many that couldn't be written around if someone was to say "these characters can't transform"? Legacy, Target, even G2. As fans we consume these stories knowing their Transformers (with all that entails as a species) and that's good enough for us but really if the universe required it Impactor could just pick up a huge ****ing gun (instead of turning into a set of blocks we only recognise as a Cybertronian tank because we've had years of characters turning into Cybertronian tanks because the engineers got ****ing lazy) to shoot Overlord and the narrative would be unchanged. Transformers hasn't really done Transformers stories about how cool transforming is, not since G1 S1 and maybe the opening comic limited series. For most of the franchise's history after that when someone transforms it's largely to make travelling somewhere else slightly more convenient.
Marvel have somewhere to go in that they can do a solo film for someone and then just drop them in with the sketchiest characterisation to another film and remix things. This doesn't work with Drift or Hot Rod or Sideswipe because people don't care. But the Marvel films on a wider scale seem to be eating themselves; the big trick is increasingly towards team-ups, and the more you team people up the less room there is for characterisation. But it doesn't matter because Iron Man's had attention in three other films, so he can turn up in Civil War, Homecoming and Infinity Wars as a quipping shithead and that flies. Really this is the advantage of having five, ten properties on tap that are genuine pop culture shorthand and the Fox thing means they've got the X-Men, who are probably bigger than any of their current ones bar Spider-Man, coming in to take over the baton after the Infinity cull.
Regarding Bay himself I've still yet to hear a viable alternative who'd have taken the gamble in 2007, let alone someone who'd take over. A different director would have been on my wishlist for 4 but the relationship is a lot more symbiotic than many fans seem to think. Would Paramount have basically stumped up money for him to make a whole other film as a bribe if there had been capable replacements queuing up. The homogenous mess of the GI Joe films shows what could have happened; at least the TF films have some sort of coherent linking identity and a director who pushed back against studios and corporate sponsors. And from Hasbro & Paramount's point of view I think they got three or four more films out of the thing than they expected to, which isn't bad for something they farmed out to a junior partner a decade before because they were done with it.
Copy & paste from a blog article I wrote around the release of 5: -
Six Reasons You Will Never Get The Transformers Film You Want
Initial box office figures for the fifth Transformers film, The Last Knight, have been underwhelming while the reviews have been the usual lazy hackwork, though this time it seems that even fans of Michael Bay's envisioning have been left unimpressed. I've yet to see it so I'm reserving personal judgement but as usual it's taken fandom little time to crack out the knives, further fuelled by the apparent exit of Bay from the franchise. Putting aside that it seems to be a familiar pattern slash negotiating tactic from Bay (who only took the assignment on Age of Extinction as leverage to raise money for Pain & Gain) many seem to be heralding this as an end to his style of Transformers films and the chance for something more cerebral. It won't be, and here's why.
1. BAY PROBABLY WAS AND IS THE BEST DIRECTOR INTERESTED
The talk of Bay stepping down has led to the usual unimaginative genre-familiar suggestions from social media critics - JJ Abrams, Christopher Nolan, Joss Whedon, Zach Snyder. These people will not get involved in something like Transformers. However good some Transformers media has been over the past thirty-plus years Transformers exists to sell plastic toys to children; any artistic merit is a mere by-product. Film directors do not know the ins and outs of the franchise and see it as such, without even the cultural kudos of Lego. They are after prestige from their peers and critics and creative control; helming a multi-million movie where the demands of a toy company, a studio trying to hang on to heavy hitters in the face of the superhero onslaught and secondary licensees such as car manufacturers ticks neither of those boxes.
To even risk relinquishing either is a major risk for a serious director; the Nolans would see even their acclaimed Dark Knight trilogy as something like corporate whoreage. Most of the names mentioned have already 'done' franchises and are firmly looking to get back to doing their own ideas. There's a chance that the approach taken by Marvel, where the films are given an overall house style under Kevin Feige and given to jobbing safe hands, some of whom stand out (e.g. the Russo brothers) and add something but really even with a possible Bumblebee series Paramount have less chance to unearth one.
It's more likely that if Bay goes we will get an unabashed franchise whore who is likely to ape the style already in place - someone like McG, Jon M Chu or Jonathan Liebesman. While few would admit it, Transformers in 2007 was lucky to land Michael Bay, a largely successful action film director with box office clout and a filming style that connected with the audience. Since then he's claimed to be leaving a couple of times and been begged back with greater financial incentives; would Paramount really do that if they had a queue of more credible directors begging to take over the films?
2. HUMAN CHARACTERS ARE NECESSARY AND WON'T BE GOING ANYWHERE
The complaints about the time given to human characters started in 2007 and haven't stopped since. But get used to them because as long as there are live action Transformers films there are going to be major roles for humans in them. And why? Because people like them. Not necessarily the fans, but the hundreds of thousands of people who go to see them and don't buy IDW comics. However their careers have turned out since Shia LeBeouf and Megan Fox were a big reason a lot of people went to see Revenge of the Fallen; Sideswipe and Arcee not so much. Later, the established built-in following Mark Wahlberg has which has propped up films before Transformers and will likely continue to do so later was a big factor in the box office success of Age of Extinction. And the comedy characters - Simmons, Lucas, the Indian call centre guy, Judy Witwicky - normal people love them. Cinema audiences have little tolerance for relentlessly serious films, which is why no-one in Marvel films can shut up. So there will always be funny characters you think are detracting from the serious business of cars turning into robots who hit other robots and for simple connection they are most likely to be human.
The other major factor is budget. Age of Extinction cost $210m, with the vast majority of it filmed on real locations or constructed sets plus considerable stretches where there were no visual effects on screen. Ramping down the Earth/human focus would cost an extortionate amount of money; to film something like - for the sake of argument - Last Stand of the Wreckers would involve sets being built for everything - not just spaceship interiors but alien planets - plus robots being animated for the entire length of the film. Budgets for summer blockbusters are high but not that high, hence you are always going to have a fair percentage of screen-time featuring no robots. Not to mention that once you eliminate humans and Earth settings you might as well just do the thing with cel animation and save a fortune anyway.
3. BOX OFFICE FAILURE MIGHT SAY MORE ABOUT TRANSFORMERS THAN BAY
It's early days for The Last Knight's box office of course, and there's a difference between being a flop and just not a runaway success. If the take is disappointing it might well be fatigue to Bay's style, sure, but then the bubble was always likely to burst one day and for the taking to go up a fifth successive time would perhaps have been a big ask. However, it's worth remembering that the last three featured all of Bay's excesses and were slaughtered by both the critics and the bulk of fandom, none of which seemed to put off audiences - as well as the box office, exit polling for all of them has been a lot more positive as have DVD sales (both of which would be poor if cinema goers had been hoodwinked by fancy trailers and hated Bay's style). It would seem that among the deluge of franchises, remakes and reboots the public have found a place to fit a single film about transforming robots; the franchise's USP. There's no Star Trek to their Star Wars, not any more.
However, if this little arrangement with ticket buyers has ended it is unlikely to be because of anything in particular Bay's done - they've been happy enough with the past four films, why would toilet humour, overcomplicated plotting, skeletal robot designs, arbitrary name reuse, explosions, creeper shots and militaristic Autobots suddenly be a turn-off? If audiences have had enough it is more likely to be that they're no longer wowed by transforming robots themselves than the style in which the films have been made. There might not even be a Transformers 6, or it might not be any time soon - Sony didn't keep slinging out Spider-Man films until they lost $100m, they took a downturn in takings as a sign to step back and see what would happen; Paramount are as likely to take a break or quit altogether as to radically retool the series.
4. THE FILMS HAVE BEEN GOING TEN YEARS
The five films have appeared over a decade, meaning the Movieverse has lasted longer than the original Generation One. Naturally there have been years without movies or even much in the way of new related figures but DVD releases, streaming services and the like keep them in the public eye. And it is the public eye now; we've all had to explain to friends and family that Transformers didn't blink out of existence in 1987 and reappear 20 years later but that you have to explain about Beast Wars and the Dreamwave sales and how Cybertron was running right before the first film came out says it all for the actual cultural footprint Transformers made between 1986 and 2006. The likes of Armada were successes on their own terms but there's a difference between being a solid but unremarkable hit with the target demographic of children aged 6-10; the 2007 film and its' associated line turned the franchise back into a smash.
It's not just the profile either; Animated, Prime and Robots in Disguise have done much the same rough level of business as their predecessors - decent figures with kids and fans but the people seeing the films have gone home from the threatres and watched Game of Thrones or Breaking Bad, not Prime. Bay's version is Transformers still to the casual audience and his versions of Optimus Prime and Bumblebee have transcended to well-known genuine household character names like Captain Jack Sparrow or Elsa; they're features at Universal Studios, you can get Halloween costumes of them. They've built up their own following that dwarfs the fandom and are likely to be a prerequisite for any film continuation in much the same form as they are now, the cool truck guy with the guns and blades and the cute yellow one who talks through his radio.
5. YOU ARE TOO OLD TO MATTER
This one shouldn't really need explaining. But it does. That clumsy term G1 has many applications; against all logic the most common definition is up to about the original 1986 film, which was thirty years ago. There has, of course, been a steady stream of 'G1' media from comic publishers and figures from Hasbro via the Classics sub-series and these have drummed up some new fans who believe the original is the best. But for most G1 fans here is the hard truth - if you are old enough to remember G1 these films are not for you. You're welcome to like them of course - but your satisfaction is not the reason they exist. You're in your mid-thirties, forties, whatever.
Hollywood does not give a shit what you think. They're more interested in the 16-30 demographic because that's where the biggest chunk of disposable income is - with people who don't have families, cars and mortgages eating into the budget. Even if you take your family they won't cater for you, they'll be catering for your kids. Let it go.
6. HASBRO AND PARAMOUNT DON'T WANT TO CHANGE ANYTHING
Studios love Michael Bay. He brings in films within budget and on time which then go on to do excellent box office. Good reviews would be nice but bad ones have yet to harm the bottom line; Paramount and Hasbro have been in the business long enough to know critical scorn is no obstacle to commercial success. Hasbro are in the same boat; with toy sales shrinking the Rhode Island giant are viewing Transformers more and more as a multimedia property. Numbers are of course impossible to quantify but the ever-downscaling tie-in lines for the films suggest that Hasbro are making enough from whatever chunk of the box office gross goes their way for it to be worth their while.
Both will be happy with a continuation of this arrangement. Paramount have other films that win awards; while a Best Picture Oscar for Transformers 6 would be great they know it's never going to happen, regardless of quality, and that critics are unlikely to seriously praise a film based on a toyline out of pure disdain for such commercialism. So they'll take the box office, while Hasbro have even less artistic pretension. This means either Bay or his replacement will be issued with a remit to keep things much the same regardless of whether the next film is a straight sequel or a reboot.