DnD started its modern Renaissance probably in the late 00's early 2010's when elder millennial hipsters started rediscovering it and added to the ranks of the core group of ever-nerds who were still playing on the regular. I think 4th edition spiked a little interest, but it probably just served as a reminder and got people to blow off the dust on their AD&D/3E/3.5E books. Nerd Poker began around this time.
It had kind of a counter culture vibe for about 5 years before, like most underground things (like bands etc) or niche nerd things, it fell into the zeitgeist. It coincided with a lot of the demographic rollover, broadening, and regeneration that also happened in comics, gaming and other niches in the 2010's as counter culture shifted more and more into regular culture as social media helped open doors for people to find things. The MCU took over movie theaters, Game of Thrones was the most popular TV show.
Stranger Things/Critical Role/Adventure Zone/5E/even South Park "The Stick of Truth" all hit within one year of each other, around ~2015, which brought in a lot of young millennials and older Gen Z. And that's when the full on tumblr-fication of DnD began. Social media was filled with people taking pictures of dice/drawing their OG characters, etc. And more normie actors (not the Brian Posehn types) started dabbling with the bandwagon. I mean, you just had regular people that never read a fantasy book in their life becoming super fans of GoT and then winding up on Reddit, being exposed to all sorts of new things.
I'd say the culmination was during COVID, when media/hobby consumption and playing online was at its peak. People began introducing kids into the game. In the 2020's DnD clubs opened up at more schools.
Maybe the swan song was BG3. It seems, like the MCU, a lot of people are over DnD now, or it's just not the fad it was from 2017-2022. I'm sure it still has more players than ever, but a lot of the folks that picked it up put it back down. It's no longer hip or unique or ironic to play, so people that glommed on for that reason likely shed off. But there are still more dice stalls at comic cons now than I think I've ever seen.
As far as merch goes, I still think generic DnD figures would sell better than IP characters, if only because a lot of the newer generation see themselves so much in the character. The game is more about them and their friends and their unique canons, then being super into Warduke or something.