Sony focusing on the "whales" instead of the small fish is a different way of saying that Sony is catering to the upmarket, by the way.
I've been here since 2007 and Clayton Christensen's theory of disruptive innovation has been an extremely accurate predictor of market success and company's strategies in the video gaming business for all this time now.
Basically, Christensen says that established companies (in this case, Sony) will cater more and more to the upmarket, which means to those customers who are willing to pay the highest prices because of an increase in profits. Sony already tried this in the past with the PS3 but failed. So they had to cut back on it. Now they think they are in a position to move upmarket again, with Microsoft failing.
What Christensen warns is that established companies will overshoot a large portion of the market to maximize profits (which means they will offer something that has too many features and is too expensive for many customers). This is exactly what's going on right now and what we've been discussing 20 years ago already.
Christensen also says that whenever companies are overshooting the market, a disruptive technology can emerge that will disrupt the market from the bottom and this will kill the established companies. That was the case with the Wii (motion sensors), the Switch and Switch 2 (mobile processors - yes, the Switch systems are disruptive products like the Wii). But of course, mobile processors could also be disrupted at this point.
Christensen's theory accurately predicted the success or failure of basically every system in the past 35 years. PSX succeeded because it was released in a red ocean market (direct competition --> the bigger company wins). Wii succeeded because Sony and Microsoft were overshooting the market. PS3 failed because of overshooting. The Wii U failed because it didn't follow any kind of coherent strategy, unlike the Wii. Switch and Switch 2 succeeded because they use disruptive technology. PS4 and PS5 (up until a certain point) succeeded because they didn't overshoot the market but hit the right spot.
