Even with a 50% digital ratio it's still a considerable decline compared to XV and Remake. Yikes.

I think it’s the transition to more action-based combat. Most of the time, it cheapens the RPG experience, IMO—the only exceptions that come to mind are Mystic Quest (the GB game rather than the SNES one), Secret of Mana, Terranigma, and Witcher 3 (and Illusion of Time, if you consider that an RPG, though mechanically its an Action Adventure).

I feel like it cheapens it when it's done poorly, but in most cases, it seems to be when the story is poorly written and character dialogue is poorly delivered (gamers seem to pay more attention to gameplay type rather than actual believable writing and dialogue delivery, and tbf, not picking on you, but you focused on real time combat, instead of the latter two points, which are just as important to an RPG, if not more so).

I've played many a game that's been real time combat and having it turn out fine, it helps when you make the combat not so tedious/super simplistic that it'd lose it's lustre. I am not of the core belief that a good RPG has to be turn based till the end of time, that is more of a subjective and personal preference. 

I mentioned that I would have picked up Rebirth if I had a PS5. So me listing those games indicates that I'm willing to get the games I'm interested in at launch, if I can play them. Not that they're overshadowing one I can't play. If it worked on PS4 I would have had it as well.
No one was arguing that FF is the juggernaut it used to be in Japan. It's not. But we're comparing the circumstances surrounding Rebirth's launch to Remake.
The "3+ years" you're citing are not even the equivalent of 3 years of PS4's lifespan, because you essentially couldn't get a PS5 for years. And PS4 had been on the Jp market for 6+ years when Remake launched. The economy is in the dumps, while games also cost $70 now instead of $60.

If the launch circumstances were similar, I wouldn't expect anything like a 63% dropoff in sales.

Your post about trying something new has got me thinking, so I have come up with a battle system that's built around activity and time, bu to be a success it desperately needs a name that can shortened to 3 letters, the best I can come up with is AT so any ideas for the third letter?

Install base is never irrelevant. 

1. PS5s are a lot more expensive. 

2. Current PS5 sales in Japan don't reflect the number of ppl who actually have a PS5 in the country (due to the excessive importing that took place in the first few years) - the install base is a lot lower than hardware sales suggest. 

3. Contrary to what you said, being an FF fan doesn't mean you've already bought a PS5 to play these games. (due to a variety of factors, including console and software price). 

I think this is to be expected. It's a sequel of a game that introduced many key changes in both gameplay and story from the original work it's based on. Many people liked the changes, but some definetely didn't. There are people that purchased Remake that won't be purchasing Rebirth.

There's also the fact that there were a lot more PS4 consoles in 2020 than PS5s in 2024.

Also also, PS games are more expensive now.

Aaaaand this first part of the year it's being a JRPG overload. I know many people that are still playing Persona 3 or Like a Dragon Infinite and are looking forward to Unicorn Overlord and Dragon's Dogma II, which are around the corner. Most people don't have time or money to play all of these, so they have to choose or leave some for later.

Since 13, which I thought was okay just poor for an FF game (released in 2009), I haven't purchased any new entries in the FF series... then we've technically only had 2, then third being a spin off as far as I'm concerned. This is literally because, while good games, to me these new FFs aren't appealing to me and feel that SquEnix don't me either, as a fan of the older style of gameplay. From what FF7R had and this entry has, all I can see is random battles has been swapped for mindless busywork or minigames (because nothing says needed gameplay like hoovering up mako gas instead of having a fight).

Yet since at least the PS4 and PS5 era, I've bought a DS and FF3 remake, FF8Remaster and FF12 HD, and played in that time FF3, 7, 8, 9 10 and 12, some multiple times.

Story and delivery can affect things, a good story and well delivered dialogue can sure up a games lack in gameplay department. A few points with how this has affected me. I just finished Like A Dragon, it's battle system was to be honest, a little simple but the game was made up for in his story, and voice acting. Yakuza devs know how to get a lot from that side of things. Meanwhile, years ago I played Star Ocean 4 and stopped some way in as sound and audio long with terrible voice acting legit just put me off playing and SO5 and 6 were no better but they were made at a budget.

Now in context of FF7R, the story already had been done, was a great story and many going into FF7Rs might have, well expected the same. Yet with it being split parts and the fact the first was only the first few hours of FF7 which was basically just the intro to the rest of the story, they had to extend it, they added filler. FF7R has, in my view, utter nonsense that in essence only made relevant sense if you had played FF7 the first time around but it wasn't FF7. The gameplay was good, not FF enough for me but the story was just appalling compared to the first games first 4 hours.

Being turn based isn't what makes a good RPG, agreed, I've played many RPGs that are both or something between but what works for Kingdom Hearts might not work for Final Fantasy which might not work for Yakuza. Of course, the fact that KH and old FFs don't have the simple issue of having to wail on an a basic enemy for 5 minutes just to get it into 'stagger' state so you can deal meaningful damage, that is tedious.

ATC - Acting Turn Control.

...

Hmm, actually no, don't take that. When I make a game one day, I'm using that.

Let's not forget that not everyone that played final Fantasy 7 Remake on the PS4 currently owns a PS5. You aren't going to buy Rebirth if you haven't played Remake.