Fate

>Fate
>Mahouka
>Raildex

Modern magic settings are super popular, so why aren't they used more often in isekai series? Have a modern world with magic and elves, this could be even more appealing than Fate.

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Because all 3 required a certain amount of works and autism to craft an interesting world. Kamachi (Raildex) went full on modern occult history with quite an amount of reading necessary to get all of it.
Meanwhile, Nasu is a full-on fa/tg/uy with years of doing worldbuilding with modern settings, not to mention all of Servant stat are not recognized as actual skills and level in-universe but a representation of their capabilities.
All of these required more works than the amount your average isekai writer and reader willing to spend on their wish-fulfillment fantasy.

That shit requires talent and autism. Isekai writers have one of the two and it isn't talent.

There are few decent isekai series out there. Like Shinju no Nectar. And that one is actually using WW1 like fantasy.

It requires some modicum of thought put into it, which is already too much for most isekai writers

It's quite funny when you realize almost all isekai basically started as shitty online fanfics written by complete amateurs.

>magic
>elves

Cliched shit won’t read/10

It's pretty hard to make urban fantasy settings because of suspension of disbelief. You need to explain existence of elves, magic. Rules. What about all history? WW2/WW1 with elves? What about all lore? Nasuverse has explanation even how you to cast spells. It's like creating own table top RPG settings a-la WoD

A lot of LN authors go full autism over rules of their setting. Just look at Index magic.

These stories had lots of buildup and development for years isekai stories are just wish fulfilment stories