The PS4 was a successful console worldwide. It improved upon the sales of the PS3 in nearly every region. One big outlier is the console's "home" market of Japan.

The PS3 even with all of its struggles cracked 10 million sales in Japan. It was the worst selling PS console up to that point in the country (and worldwide) and sold less than half of the PS2. Still the PS3 only sold a couple million less than the Wii in Japan and actually outperformed it in terms of software sale in the region. 

The PS4 on the other hand sold less than 10 million units Japan, even with the Wii U being weak competition for the PS4's prime selling years. 

Why did the PS4 fail to match the PS3 in Japan?

The PS4 had a better price point but it launched several months later in Japan than the west. This is also when Sony de-emphasized the Japanese market and moved PS headquarters to California. 

Was there anything else at play?

The slide seems to be continuing with the PS5 looking like it will struggle to match the PS4's sales in Japan. 

I think one factor is that the PS3 benefitted from the PS2 base being enormous, whereas over the course of the 7th gen Japanese audiences gravitated more towards handhelds, so that by the time PS4 arrived a lot of the PS base had migrated to PSP and from there to 3DS.

a lot of that audience migrated from the psp to the vita and then onto the switch, since the vita actually sold competitivly to the ps4 during the early part of the decade.

there is also the fact that, expet for the xbone which basically doesn't exist in japan, all three of the ps4's peers did a LOT better in japan then internationally. vita sold competitivly for the first 3 years, the wii U had a cultural sensation in splatoon (people underestimate how HUGE splatoon was) and thus the wii U managed to keep a hold on the LTD advantage VS the ps4 untill 2016, and by that point the switch was coming. and the 3ds... well the 3ds just domitated.

another thing though, is that the ps4's typical playstation latter half of the generation longevity has been basically completly kneecaped by the monster that is the switch.

This, nothing more to it. 

PS spent all their money on western studios and developing games to cater to the west. Most of their Japanese 'exclusives' are just timed moneyhats that are guaranteed to be on PC eventually.

PC gaming has been surging in Japan during these generations. For anyone that doesn't care as much about portability or Nintendo, it's been the logical choice for gaming.

Because the PS4 generation saw Sony make a shift from games made for the Japanese market to big "interactive movie" blockbusters for the west, plus Japan saw an increasing interested in devices people could use to game while not at home, plus the Switch launched halfway through the PS4's lifecycle, although I haven't checked if there was actually a dip on sales in 2017.

There's a general apathy toward game graphics and high-end visuals among Japanese gamers. This was already present during the ps3 generation and resulted in japanese triple A publishers shifting toward westernization for marquee franchises and even handing ip like lost planet and devil may cry over to western developers to cater to the western market. This continues all the way to final fantasy ofg all franchises going so western that it became and english-first game with FF16. And of course franchises like Resident Evil were ALWAYS pretty westernized. the tastes of japan and the west basically started to move in diametrically opposed directions as the tastes of North America and Europe started to converge. Cinematic movie games became the triple a standard for both NA and EU when previously NA was much more catered to by ultra violent franchises like Mortal Kombat, twisted metal, and god of war, which were historically rejected in europe.

Because at some point in there, they switched to handhelds. Probably the iPhone's to blame.

Yeah Sony hasn't really catered to Japanese audiences in a long time, their focus is squarely on American and European players with the likes of TLOU, God of War, Spiderman, etc.

From the 7th gen on, handhelds became powerful enough to run the kind of games they used to play on consoles, and more recently PC has been growing rapidly there, both cutting into Playstation's lunch.

For a lot of Japan, especially those who weren't around during the PS1/PS2 days, PS just isn't relevant to them.