I don't know who can look at the actual sales of the PS5's software with a straight face and continue to say "everything is fine",
If you think Japanese companies that were planning PS5 exclusives aren't frantically renegotiating or looking into either multiplat or cross-gen alternatives.
For those that already revealed their games and are knee deep into development the ship has sailed. But knowing how slow Japanese companies are to transitions there is only a handful capable of launching AAA games at the moment without major risks to their business - Square(FFXVI & Forspoken), Bandai(likely next Tekken), Capcom(Pragmata & likely next Street Fighter), Kadokawa/FromSoftware(next Dark Souls). Beyond these companies the rest of Japan isn't going to be trying to compete with Western companies both in terms of pixel counts or marketing budgets.
Third parties that have Switch games saw an average of 80% YoY growth just among the Top 50 third party games on the Switch compared to the Top 50 an year ago. This same process is playing out in other countries namely South Korea & Taiwan for which we get numbers via the White Paper. Every week we also get South Korean and Taiwan Top 5 rankings, and honestly AA efforts from Japanese companies are doing great on the Switch. Especially in South Korea, PS4/PS5 is a no factor, while in Taiwan Switch is likely heading towards 75% or more of the software sales in the country. Why do I bring this up, well because Taiwan and Chinese gaming tastes are likely as similar you'd get across two different countries - so it gives us an idea about what type of market dynamics are likely taking place in China as well, which remains the biggest gaming market despite the best efforts of the Chinese government, consoles are still under 5% market share so plenty of space to grow.
Media Create Sales (South Korea): CY 2020 (2019 Dec 30 - 2021 Jan 03)
01./00. [NSW] Animal Crossing: New Horizons (Nintendo) {2020.03.20}
02./00. [NSW] Ring Fit Adventure (Nintendo) {2019.10.18}
03./00. [NSW] Pokemon Sword / Shield (Pokemon Co.) {2019.11.15}
04./00. [NSW] Mario Kart 8 Deluxe (Nintendo) {2017.12.15}
05./00. [NSW] The Legend of Zelda: Breath of the Wild (Nintendo) {2018.02.01}
06./00. [NSW] Super Mario Party (Nintendo) {2018.10.05}
07./00. [NSW] Minecraft (Nintendo) {2020.01.16}
08./00. [NSW] Hyrule Warriors: Age of Calamity (Koei Tecmo) {2020.11.20}
09./00. [NSW] Super Mario Odyssey (Nintendo) {2017.12.01}
10./00. [NSW] Super Smash Bros. Ultimate # (Nintendo) {2018.12.07}
SOFTWARE
01. NSW - 2.738.421 <81,13%>
02. PS4 - 576.879 <17,09%>
03. 3DS - 41.945 <1,24%>
04. PS5 - 18.270 <0,54%>
00. ALL - 3.375.515 <100,00%>
Media Create Sales (Taiwan): CY 2020 (2019 Dec 30 - 2021 Jan 03)
01./00. [NSW] Ring Fit Adventure (Nintendo) {2019.10.31}
02./00. [NSW] Animal Crossing: New Horizons (Nintendo) {2020.03.20}
03./00. [NSW] Super Mario Party (Nintendo) {2018.10.05}
04./00. [NSW] Mario Kart 8 Deluxe (Nintendo) {2017.12.15}
05./00. [PS4] The Last of Us Part II (Sony Interactive Entertainment) {2020.06.19}
06./00. [PS4] Final Fantasy VII Remake (Square Enix) {2020.04.10}
07./00. [PS4] Ghost of Tsushima (Sony Interactive Entertainment) {2020.07.17}
08./00. [NSW] One Piece: Pirate Warriors 4 (Bandai Namco Entertainment) {2020.03.26}
09./00. [NSW] Pokemon Sword / Shield (Pokemon Co.) {2019.11.15}
10./00. [NSW] New Super Mario Bros. U Deluxe (Nintendo) {2019.01.11}
SOFTWARE
01. NSW - 1.304.139 <59,82%>
02. PS4 - 863.897 <39,63%>
03. PS5 - 10.692 <0,49%>
04. XBS - 1.262 <0,06%>
00. ALL - 2.179.990 <100,00%>
