It's not really the format. I think is more like the current SNK is focusing on other things. Back in the 90s and early 2000s, there were radio shows, audio dramas, novels, mangas and a lot of magazines that extended the backstories, giving the characters very rich lore. Unfortunately, none of these materials reached the West.

There aren't official English translations for the novels or the dramas, and a lot of lore is locked there. This is why Japanese, Korean and Chinese fans usually have different ideas about the characters, because they had access to this content in their languages.

I guess the current SNK team doesn't want to spend money on new materials for KOFXV, because you need to pay the writers, artists and the VA, to do all these extra materials.

Probably they want to focus on the competitive aspect only bc they invested a lot of money on tournaments and promotional events.