Bold: Yeah, expectation >< reality, show me your proof. Your "if" is also not a reality yet, with the pandemic covid is getting worse.

I fixed it for you because one look of the top 30 shows you they are certainly not buying PS4 games. 

It's one thing to be low on stock. And don't get me wrong, the PS5 is low on stock. But Japan is one of the biggest markets for dedicated gaming hardware in the world. And currently, it appears that some ridiculously small portion of PlayStation 5's being sold are being sold to the Japanese. Last week for example, you literally had less than 0.5% of PS5 sales being in Japan; for comparison, Australia and New Zealand, which combined have a quarter of the population, had over TEN TIMES the number of PS5 sales.

It is clear that Sony is favoring building a PS5 userbase in the Anglosphere and Europe rather than Japan. And favoring one region over another is not necessarily a bad thing; some regions are bigger supporters of a brand or are more potentially valuable, and are thus worth prioritizing. But considering how heavily the PlayStation brand both has been a significant presence in Japan and has in turn benefited from the Japanese gaming industry, this prioritization of everywhere BUT Japan is notable. It implies that Sony doesn't really care too much about possibly losing the support of Japanese fans, developers, and publishers, which means these companies will likely be forced to turn elsewhere.

If I’m not mistaken, not only is Nintendo dominating Japan, but they’re doing really well in other parts of Asia as well. They have a respectable showing in China despite the slow output of games and they’ve been dominating software charts in Taiwan and South Korea. So overall, Nintendo is showing you can do well in every region in the world (as they’ve also done well with Switch in Europe). So it’s unfortunate that Sony doesn’t see it that way or they do but they’re not providing any interventions at this time.

A difference is that what Nintendo inherently does well, works globally. They haven't specifically had to tailor it or open new studios just to appease the West or vise versa. The only big Playstation IP sony have produced in Japan is GT, otherwise they've always been reliant on 3rd parties (Square Enix, Capcom etc). They have plenty of Genre diversity from 1st party output, but nothing that has quite clicked with the Japanese market in the last decade apart from Ghost of Tsushima, and to a lessor extent Demon Souls/Dark Souls. And unlike Nintendo, Sonys commercial strength lay in more "Mature" games developed by the western arm which will struggle for a legal release in a place like China, where as Nintendo's commercial strength lays in more approachable, inoffensive titles like Mario.

We've seen with all of the big 3, that its actually very hard to shift gears. Its taken a long time for MS to try to leverage their 1st party again Sony, or for Nintendo to find its foot in HD developement... When sony tried to copy Nintendo  back around 09/10, all the games flopped (Move/Playstation All stars/LBP Karting) So if there were any software developments happening on Sonys side I wouldn't expect it over night, they've learned to mostly stay in their lane. And up until 2017 they were the dominant home console in every market. 

Hopefully the Team Asobi arm broadens and grows into multiple teams by the end of the generation, they really have a magic touch and I think the Sonys only Japanese team to create a truly great game in the last decade or so.

Sony tries to copy the best games Nintendo makes with the B team. This is a problem, when Nintendo products their games, put the best team to do it. Sony believes in casual myth and tries to copy with the B/C team. The best sony team development is the usual action cinematographs game only. Nintendo takes a great team to produce Wii Sports, Animal Crossing, Nintendogs, Mario Kart, etc. 

Well back in the PS3 era, yes. But that relates to the issue, their A teams were already working on IPs which have brought them great success. Just the same way Nintendo doesn't try to compete with Uncharted or create their own Halo, Sony has taken to their comfort zone too and learned to focus on what they do well.

It is rather bizarre that Sony seems to view supporting Japan vs the West as mutually exclusive whereas Nintendo and a lot of Japanese third parties, and hell even Sony themselves in past generations have shown that you can have both.

There's nothing stopping Sony from making games that appeal strongly to both markets, as a lot of popular Japanese software is huge in the West too. Instead it seems they'd rather concede the Japanese market.

Year 2050, the same handful of users still cannot understand Japan likes mobile gaming, something the rest of the world realised 10 years ago.

Nintendo has a handheld. Sony does not. Nintendo can have a handheld because they are not supporting the entire third party industry with their hardware, hence weak hardware is acceptable.

Playstation houses the majority sales of the entire gaming industry, who develop games for cutting edge hardware, using cutting edge game engines, using software devs and creators that like to push the medium to the edge.

Playstation is never going to give up the top specs throne, and it shouldn't because that's where the money and the future of gaming is at. Maybe when streaming is good enough, or Sony gets some very good mobile chips that allows all current games to be played it will do another Playstation portable, but until then Sony is not going to worry. The future is simple elsewhere and the entire gaming industry knows it.