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Otter said:

Just honing into the bolded because I see this repeated a lot but it actually doesn't add up. Sonys western first party titles are more popular in Japan than their Japanese ones. Moreover Playstation has never attracted large Japanese audiences with it's first party titles outside of GT and most recently Ghost of Tsushima.... Ghost, Spiderman, God of War and Horizon are much better sellers in japan than anything Japan studios released in the market. 

It's fair people miss Sonys AA output but they really didn't sell much in any market. It's simply not part of the equation in their decline, especially when you consider they went on to hold a console monopoly on many third party Japanese games.

Sony's Western IPs do better in Japan than their Japanese ones, cos honestly the few Japanese ones they've had in the last 20 years haven't been that strong. Don't get me wrong, I love games like Puppeteer, but they're fairly niche and not the sort of thing you'd expect to move hardware or light up the charts.

Sony have no answer to say, Nintendo's first party IPs like Splatoon or Animal Crossing that are ultra-popular with Japanese gamers.