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I feel you're overthinking this. I simply saw that the western market changed while Japan and Japanese focused games stayed much the same.

Around the 6th gen it seems that FPS games, western RPGs and other types of 3rd person action games really started to dominate the market. Many of the Japanese studios just weren't connecting with the changing market.

I'd say MS still had the impression Japanese centric games were very important when they bought exclusives from Japanese studios while funding projects like Lost Odyssey and Blue Dragon. After a few years though they gave up on the push for Japan and their specific style of games.

On PS3, PSP and Vita there was a big push of Japanese games from Sony. The market was fickle though, not many of those games did particularly well. What did thrive was Sony's western games. Sony might be a Japanese company but they weren't great at appealing to Japanese gamers with 1st party games per se.

Hence, Sony is simply focusing on the bigger market and more importantly the market that actually bought their games in droves. It wasn't really a response to MS in my opinion, they just leaned into their strength.



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