I would say no.
They still kept all the studios they had on Japan, they still get the games from japanese devs (several even exclusively).
It is just that their western studios thrived much more than the Japanese ones and that isn't fault of Sony. You could point it to either customer preference or japanese devs not being able to compete.
duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"
Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"