Some think a franchise that does over 50% of its sales in Japan is going to be aiming to alienate its biggest audience chasing the West. Its far more likely for the game to be exclusive on the Switch than aiming for PS5/Series exclusivity with Horii in charge

Don´t make any sense of your argument. The rise of the cost is because of the rise of graphic investment and value production. Making a AAA  for PS5 is more expensive than making for Switch. One 720p AAA game for the switch is more affordable than AAA 4k ps5 game. It´s production value basic. 

Your argument contradicts yourself: some producers are more time with Switch devkit than ps5. So have more experience with Swith than Ps5. 

Horii chase PlayStation audience and have to make a 3ds version to support the adventure.

Exclude the market leader with a game series historically launch on a Japanese market leader it´s not a good rational practice. 

We won't be seeing Horii do what he did with XI again I'll bet money that it's going to be market leader in the region first then everyone else as an after thought, XI gained 1m over the prior best seller but had a double development for two separate versions and needed to be across five platforms to gain that while in contrast all the prior best sellers did so on one platform because they stuck to the rule he imposed.

He wasn't talking about resolution. Of course a game in 4k is more expensive to make than a game in 720p, but you can also make 720p games for the PS5.

Being 4k is not a requirement to make games for PS5. Most of JP games released in Japan during PS4 era wasn't targeting graphical fidelity either. Even if Playstation completely dies in Japan JP devs can still sell their games outside Japan on both PS5 and PCs as porting for them is a breeze and a small investment for something that can expand a game userbase

Now you changing your argument. The same company could sell the game in a bigger install base: Switch. 

Sell well in Japan and Global. 

Capcom did that with a franchise that used to sell over 80% of its sales in Japan and now they have a worldwide hit with 20 million sales at cost of ~2million sales in Japan, I doubt they are feeling any remorse.

But of course, Dragon Quest is a JRPG and there is no precedence for JRPGs selling that much in West, Square main JRPG is West in Final Fantasy and XV sold "only" 10 million even with a PC release, so PS5/Series exclusivity is far beyond question, it will never happen, period. 

I'm not changing my argument, you simply didn't understand what I said:

"Just disclaimer, it's not more cheaper to develop to Switch. Cost development depends heavily on workforce, and games with expansive open worlds and high graphical fidelity will indeed be more costly, but you can make smaller budget games for PS5 just like most JP devs used to do on PS4"

I never said anything about not selling on Switch either. You can easily make a game for Switch and later port to other platforms which is precisely how I see JP market going forward. More platforms = More sales

Indeed I'm more inclined to believe the only games that won't be ported to PS5/PCs are the ones devs don't even plan to release outside Japan, mostly because of localization costs

Capcom launches a game with a good install base. It´s another situation here.