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Considering the sales of the first 3 games on the 6th gen systems, I doubt we would have gotten 4 further games from this IP if it weren´t for Nintendo showing interest.

Another series that is in the Horror genre and started on PS2 and even had a PS3 entry is Siren, which even had former Silent Hill staff on-board, was published by Sony and were released on supposedly "right" systems namely PS2 and PS3.

I mention this series for it beeing a Horror game, released on the "right" target audience and roughly similar sales, maybe even a little bit better. The interesting point though is, that despite no need to pay 3rd party royalties and beeing released by Sony, the series is pretty much dead by now.

In other words I really would be more hesitant to oversimplify and call them sell-outs or greedy. A 3rd party product that would also need to pay 3rd party royalties, would very likely simply have lead to an earlier end of the IP just like Siren.