"I don't think the high number of content is automatically a good thing. How many of these games are seeing a sizeable enough audience. How many are making an ROI?"

The high number is indicating that enough of these make enough ROI to keep the developer afloat, as a lot of devs also make more than one game. That is the thing that is denied by statement that there is no room for A, AA or indies.

"Games are being made because there's obviously money to be made"

Exactly. The mid to small games make overall more money than ever before because gaming as a whole grew.

"but at the same time visibility is a major issue when there's so much stuff coming out"

Yea. And again, that is not really something new. In any platform with many games (think PS2 for example) the visibility was bad for single titles. But the market itself was big enough and is big enough today, that a sizeable part of these devs can survive.

"There's also the question of services like GamePass and PS+, the general prices of games, and how these ultimately play into how ppl spend money."

Doesn't seem really matter for Steam. And indies are mostly positive about Gamepass, because it counteracts the visibility problem you mentioned. And they get some money right away.

"Perhaps there's something I've missed about AA games."

You have games like Palworld, Black Myth Wukong, Stellar Blade, Lies of P that actually do well. Nintendo actually does AA pretty often to great success, for instance Pikmin 4 or Mario Wonder.

I cannot remember Nintendo ever mention the words 'Double-A' or 'Triple-A'. Neither other Japanese developers.

It's a construct that's typically a western thing. A marketing term to pound their own chests or a buzz word to raise investment. It does not have any real meaning.

The sooner game developers stop using these words and just make and promote their games in highlighting new and interesting idea's they'll be good.

Sorry I'm being a little facetious about the cheap part. A lot of their games seem to be in the $200 million range. But they do have cheaper games. Demon's Souls was probably quite a bit cheaper. Astro Bot was a lot cheaper. Ghost of Tsushima was cheaper. Concord is probably like a Tier 2 for Sony. Cheaper than Spider-Man 2, Naughty Dog's next project. 

Dient see Neon Koi coming