SUICA penguin is retiring because SUICA will be eventually replaced by new touchless service Teppay (website is in Japanese only at this moment) which Teppay service will start Fall 2026. Teppay stands for Travel Easy Partnership Pay, and system will be an app-based system only (no physical card) and aim seems to be to have Teppay accepted at wider non-JR establishments. It sounds like JR wants to compete directly with credit cards for cashless payment system.

Another information about SUICA penguin, JR East did not own the character right to SUICA penguin. JR East never purchased the right to SUICA penguin from the creator of SUICA penguin, and the creator still owns the right to SUICA penguin. This also seems to be a part of reasons in SUICA penguin retirement when JR companies decided to merge current touchless system and create new cashless system.

P.S.
You can buy SUICA Penguin stuffed animal from JR East shopping site (site in Japanese only). This got so popular when JR East announced the retirement of SUICA penguin that it was out of stock for a while. There is also a larger SUICA Penguin, but this is currently out of stock and there is no date for restocking.

There is a bronze statue of SCUICA Penguin at JR Shinjuku station. It is located at Shin Minimi Guchi, New South Entrance where Shinjuku Busta is located. South side there is overwalk south side of Shinjuku Busta overlooking JR tracks toward Yoyogi. It is located there. Also, lately it is a popular picture spot (Insta Bae, インスタ映え) once the retirement of SUICA Penguin was announced.