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noshten said:

For the PS5 the situation with Third Party Software is such that I'm having huge doubts if total sales on the system would be surpassing 400K for the year, the only chance PS5 has to have a 100K+ third party seller this year is Tales of Arise, and I would be surprised if it happens. There doesn't appear to be 700K hardware sold to Japanese owners; to me such a horrible performance for games on a system has to do with the actual size of the audience. I don't think more than 200K Japanese actually own the system, it's getting resold overseas for a profit. Also there is not much to really offer to the audience, so far the only new games have been Resident Evil: Village and Scarlet Nexus, FFVII Remake Integrade. On a 200K userbase RE: Village would be over 25% attach rate, which to me seems to be more realistic based on past trends where we saw much higher physical sales even for X360. 

X360 Top Selling Games 2005-2006

  1. Blue Dragon (Microsoft) - 135.240
  2. Dead or Alive 4 (Tecmo) - 103.307
  3. Ridge Racer 6 (Namco) - 72.129
  4. Dead or Alive: Xtreme 2 (Tecmo) - 57.060
  5. Dead Rising (Capcom) - 49.978
  6. Lost Planet: Extreme Condition (Capcom) - 44.854
  7. Ninety-Nine Nights (Microsoft) - 38.019
  8. Rumble Roses XX (Konami) - 29.187
  9. Project Gotham Racing 3 (Microsoft) - 25.058
  10. Culdcept Saga (Bandai Namco) - 23.947

TOTAL: 578.779

TOTAL HARDWARE X360 2005-2006: 290.467

Based on the Software sales of the released games on the PS5 so far we are likely looking at less than 300K physical software sales and a userbase of around 200K, in my opinion the rest of the units have been resold overseas - hence Software isn't performing at the level I would expect for 600K PS5s which supports physical software. 

If your theory is true, then once the chip crunch is resolved the PS5 sales in Japan should nosedive a lot. We'll see how this hold up, but I fear you could be right.