Here's what I think is what's causing these embarrassing numbers:
1. The continued decline in notable/major 3rd party games' popularity (across all platforms), and the weak PS5 lineup from a Japanese perspective.
2. Digital ratios being a lot higher than PS4 launch aligned.
3. Backwards compatibility and Playstation Plus Collection. But let me just throw Astro's Playroom in for the giggles.
4. Scalpers and neighboring countries importing PS5's, which inflates the number of actual PS5's in the hands of Japanese players.
5. "dumb-delivery". If I'm not mistaken, some PS5 versions of multiplats cannot be played on PS4. Whereas the PS4 version can be played on both consoles. So it's possible a good portion of these PS4 copies sold are intended to be played on PS5.
Series XS at 1700 copies cracked me up. It's safe to say point 2 applies to a greater effect here. Points 1 and 4 (for the Series X in particular) are likely a factor too. Then there is of course Game Pass which might be killing software sales in Japan in favor of hardware and subscriptions.
1. Momotaro, Monster Hunter Rise, and other games have grown on Switch or Switch/Ps4
2. Digital ratio in Japan is minimal. Japan it´s a physical massive market, with a massive used gaming market.
3. Use market for ps4 goes down. But the Plus thing is it´s a trend. Let´s see if this was bothering about this.
4. Agreed. We seeing Japanese Ps5 in China, Taiwan and Brazil.
5. It´s the norm, the new-gen works old gen and the old gen only works old gen.