Furthermore, the "In the West" argument loses luster when you remember that Nintendo is just as dominant and has just as strong of a presence in the West as Sony does. PlayStation may have the edge in Europe. But in North America? Out of the Top 10 best selling systems of all time, 6 of them are Nintendo, including the Switch and the #1 selling system of all time, the DS, the Wii is also #4, so they had 2 of the Top 5 best selling systems in North America in the SAME generation! But back to the Switch, it is just 2 million and change away from passing the PS4, with no signs of slowing down.
So Japanese devs could get just as many sales as they would get on PlayStation in the West, while also getting missing sales from the homeland by just making games on Nintendo. So a lot of the Japanese 3rd party devs that used to make games exclusively for PlayStation hardware are now going either multiplat or Nintendo exclusive. At this rate, it may only be a matter of time before we see a new mainline Final Fantasy or Kingdom Hearts get made and released on Nintendo alongside PlayStation.
Putting all their eggs in the 'In the West' basket was the worst thing Sony could have done. Because they have effectively surrendered Japan to Nintendo (the first sign of this was when they left the handheld market after the Vita's failure). The abandonment of Japanese devs for the system will eventually have a trickle effect to the other regions. And with Microsoft closing ground and gaining momentum in the US + the Japanese home console market shrinking to the point of irrelevancy, that complete global advantage they had during the PS1 and PS2 eras is gone.
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