Nintendo own is no problem for performance of Switch, but a big problem for third parties. FF and Resident Evil are planed to release for PS5 and won't move to Switch because Switch doesn't have enough performance for their devs. At now, Nintendo has a big market, but it is unsteady as the Wii used to be. A next challenge for more big and stable market is taking in major franchises.
For a few years now when I thought of Japanese third party titles being PS5 exclusive the main titles that came to mind were FF and Resident Evil. There might be a couple others I'm forgetting but not many. Those are the Japanese games that are really popular outside of Japan and also have a huge budget. There aren't many Japanese titles that really need to be PS5 exclusive and those two aren't even the most important ones.
The most important third party games are Dragon Quest and Monster Hunter. Monster Hunter Rise, we already know, is going to be Switch exclusive. Dragon Quest 12 will likely be Switch exclusive (or maybe Switch 2 depending on release date). If Sony is lucky it will be multiplat, but I think it is more likely to be Nintendo exclusive like DQ9. And the more important game of the two is Monster Hunter Rise, because we already know it is Switch exclusive.
The main question Japanese developers have at this point is if they want their games to be Switch exclusive or PS5/Switch multiplat (similar to PS4/Vita multiplat). The install base on PS5 is just not going to be big enough for a big budget Japanese exclusive. If they want to make money it's either Switch exclusive or multiplat. Switch already has a 17m install base, it's still selling strong, and it's going to have MH Rise plus all of Nintendo's first party games (Animal Crossing, Pokemon, etc...). It should be a no brainer which platform will be more profitable for Japanese games. In fact, for 2021-2022 I bet we'll see more PS4 exclusives than PS5 exclusives in Japan. PS5 is just not a viable platform for Japanese exclusives outside of a couple of titles like FF and Resident Evil.
There are several important titles in the coming years:
- Dragons Dogma
- Project Athia
- GranBlue Fantasy
- Rumored MGS
- Tales of Arise
- Elden Ring
- Rumoured Ape Escape
- KH Spin off
Majority of these will be effectively PS5 exclusive in Japan. Thanks to PS4's massive worldwide presence and software sales on par with the PS2, Japanese third parties are selling more titles off their biggest franchises and making more money than they ever have.
Japan is simply not a relevant market to the majority of these franchises to dictate platform development, as it accounts for <10% of LTD sales.
FFXV - nearly reaching FF7/FF10 level of sales
FF7R - best selling FF of all time in the time frame while being exclusive to PS
KH3 - best selling KH of all time
Nier A - SE's best selling non KH/DQ/FF RPG ever
RE7 - reaching RE4 level of sales
RE2R - a remake selling better than mainline titles, on track to surpass RE4 and maybe RE5
MHW - best selling Capcom game of all time, best selling third party JP game of all time and did almost 5 times its sales on Nintendo
DMCV - best selling DMC game of all time
Persona 5 - best selling Atlus game of all time
Nioh - Best selling KT original game of all time
DBF + UNS4 - Both selling 5 million, best selling anime fighters of all time
Tekken 6 - 6 million+, prob the second best selling Tekken game
AC7 - fastest selling AC game
Code Vein - New IP managed to sell 1 million+ in a few months, something BD hasn't had in a while.