The declaration of the death of the japanese console game market is as always premature. Nintendo proofs that it can sell the PS1/2-numbers still - with DS and 3DS. Switch is on a trajectory to also blow past 20M.
Now, many will say: DS and 3DS (and maybe even Switch) are handhelds, not consoles. That's like a car maker saying: cabrios don't sell anymore in market X, so we are giving up and selling elsewhere, while completely ignoring that compact cars are selling. You need to cater to the needs of the customer, and western gaming companies (and be real: Sony is a western company already) are unwilling to do that for that for japanese customers.
About the mobile game sales: mobile gaming is on the rise worldwide, that is not a new phenomenon. But usually mobile gamers are simply people who didn't game before the rise of mobile gaming, a completely new gaming segment. Classic gamers still mostly prefer classic dedicated devices. But in the case of japanese customers and their lifestyle a handheld console often fits better than a stationary console. Also the types of games are different.
So talking about the japanese market as not worthwile for a console company is just ridiculous if at the same time Switch and Animal Crossing are selling record numbers.
Be honest: Sony doesn't want to do the extra effort to cater for the japanese market and leaves it to mobile and Nintendo. But that is hardly the fault of the market, just the strategic decision at Sony not to invest in that market.
