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Sogreblute said:

Nintendo always had the Japanese market except during the PS2/Gamecube/GBA days where it was even. I'm seeing a lot of people saying that the reason the Switch is dominating is because it's a handheld while PS4 and PS5 are home consoles. No, I don't believe that is the reason. Playstation has been on a decline in Japan after the PS3 and PSP days. PS4 sold 1 million units worse than the PS3 and the PS Vita sold 1/3 of the PSP sales. If Japan was all about that handheld gaming then someone explain why the PS Vita sold 6 million in comparison to the PS4's 9.4 million. Sony making a new handheld system isn't going to suddenly make them relevant in the Japanese market, because the PS Vita showed that even with a handheld system Playstation is just losing relevance. The PS5 will be no different. It will sell worse than the PS4. I'm predicting lifetime sales will be 6-7 million.

It's not the only factor but a big part of the reason why is because one is a handheld and the other isn't. Japan was the only place the PS Vita had any amount of real relevance, it selling over half of what the PS4 sold there while it was nowhere near that anywhere else is an example in favour of Japan's handheld preference, not against it. There's also that the top 4 best selling systems in Japan are all handhelds which is not the case for NA and Europe.

You're right that Playstation is losing relevance there though, them making a new handheld would only help them there if it was properly supported.