Yep, they lost a lot of audience in Japan during the transition from PS2/PSP to PS3/PSV. I think they've stabilized with the PS4... but that was because originally it was competing with Wii U, now that Switch is dominating the market outlook is pretty bad for PS5 in Japan and Sony probably know it. 

I think they might eventually sell over 12.5M PS4 units in Japan, if they lower the price considerably once PS5 is launched. Honestly, some Japanese are probably still waiting for a price drop on the PS4 before buying it. 

But the tendency is for the PS5 to struggle in Japan. 

PS2/PSP: 21.98M/19.69M TOTAL: 41.67M

PS3/PSV: 10.5M/5.86M TOTAL: 16.36M

US and EU/UK are the biggest markets for Playstation. Makes sense to target your biggest audience first.

Global unit sales of PlayStation 4 as of May 2020, by region-

According to famitsu PS4 LTD sales is at 9.1mil where did you get 9.8? 

You need to read his posts more carefully. He mentioned that, since the PS4 fought the early part of its lifecycle against the WiiU and had the lion share, it lived uncontested. The PS4 also lived alongside the Vita in Japan. This won't be true with the PS5, so naturally the sales will decline, hence why Sony will most likely exit, like they did with Vita. If they do, that is great news for Nintendo to have a stronger presence worldwide, as it will enjoy games that taylor to the japanese and add those as offerings to the games they already offer to the West. It makes the Nintendo console more attractive overall and that's good for the worldwide competition of the 3 manufacturers.

You need to read his posts more carefully. He mentioned that, since the PS4 fought the early part of its lifecycle against the WiiU and had the lion share, it lived uncontested. The PS4 also lived alongside the Vita in Japan. This won't be true with the PS5, so naturally the sales will decline, hence why Sony will most likely exit, like they did with Vita. If they do, that is great news for Nintendo to have a stronger presence worldwide, as it will enjoy games that taylor to the japanese and add those as offerings to the games they already offer to the West. It makes the Nintendo console more attractive overall and that's good for the worldwide competition of the 3 manufacturers.

Could be, but gamers found a home for DQ in Nintendo consoles. In general, I haven't seen FF really make a big difference in the success of PS in japan like it once did.

I personally wouldn't bet too much on SE. Rather if I were Sony, I would get MH exclusive again, among other franchises that are popular in Japan.

Well, it is true that the home console market isn't what it used to be in Japan, for reasons that are not entirely clear (probably a combination of social & economic factors and an increased focus on Western audiences for AAA software development). It had actually peaked in Gen 5, with Gen 6 being down slightly (though that was almost entirely on Sega's end). The last "pure" home console to sell over 15M units was the PS2. While the Wii was Nintendo's best-selling home console ever in the U.S. and Europe, in Japan it fell well short of both the NES and SNES.

PlayStation has also suffered a lot. As we can see, the PS3 didn't even sell half of what the PS2 did. The PS4 is tracking to sell slightly less than the PS3, even though nearly everywhere else the PS4 has already far outsold the PS3.

Only three games have sold over a million copies on the PS4 to date: Monster Hunter World, Dragon Quest XI, and Final Fantasy XV (FF7R is next behind them at 919k sold so far, and it is followed by Kingdom Hearts III at 861k). Outside of a few big-name Japanese franchises, many of which have declined in popularity in their home country, there aren't that many big draws on PlayStation anymore for Japanese audiences. And almost all the most popular games on the PS4 are third-party titles. The best selling first-party PS4 title in Japan is Knack(!), with only 400k copies sold, which puts it at #16 among all PS4 games.

But the Switch is different. It's not a pure home console. It's a hybrid. That handheld aspect is almost certainly the reason why it's been doing well. While it's been selling more slowly than the 3DS, that's almost certainly attributable to being more expensive than the 3DS, and FWIW the gap between the two is shrinking (the 3DS was relatively front-loaded, while the Switch is much less so). Its games have been selling very well. It already has ten million-sellers. The new Animal Crossing is already one of the best-selling games ever in Japan, and has already outsold every home console title except Super Mario Bros. And the Switch's best-selling games are almost all first-party titles. The only million-seller that isn't a Nintendo title is Minecraft at 1.4M sold, and it's followed by the Switch port of Dragon Quest XI, which has so far sold about 523k copies.

For whatever reason, Japanese gamers just don't care as much for conventional consoles as they used to (they still like handhelds, though), and as long at that remains the case, PlayStation will not be as relevant in Japan as they once were. That will likely further encourage Sony to focus more on North America and Europe, leaving third parties to provide games that still do decently in Japan.