The main problem with the PS5 is that it is essentially locked into being another Sega Master System. The Sega Master System technically had some good games, but almost no one wanted to buy one. It had a huge "why bother" factor going against it. The NES/Famicom had a lot of better games and a much bigger library and I believe it was cheaper too most of the time. So even if the Sega Master System got some good games, why bother? The NES/Famicom was still better in every way except for maybe raw power.
That is the situation the PS5 is encountering in Japan. Why bother? Ratchet and Clank is a decent exclusive but why bother? In fact the PS5 might get even more good exclusives, but why bother? The Switch has better games and a bigger library and it's cheaper than the PS5. (And it's portable too.) It's better in every way except for raw power. A lot of PS5 games are going to end up on the Switch too. For most Japanese people there really isn't much reason to buy a PS5. Why bother?
No matter how good the PS5 gets, it's going to be completely eclipsed by the Switch.