I don't get the downplaying of software being a factor. Doesn't Nintendo benefit heavily from stuff like Pokemon being miles above in popularity than anything Sony have in Japan? Software plays an important role in which platform is popular in different countries. The reason Europe prefers PS5 is because the software on PS5 is more appealing for European markets than what is available on Switch 2, and the same is true for Switch 2 in Japan. Kirby Air Riders will likely be a bigger seller in lifetime sales than anything Sony has released in 5 years in Japan. Nintendo simply has more popular IP in Japan than Sony has. It seems to contradict reality to think that Japanese will care about games like God of War when they play those games on a handheld, and Switch 2 will have such a massive install base in Japan that fairly few popular Japanese third party games will skip Switch 2 to only focus on a PS handheld. Which means Sony would need to be incredibly aggressive in moneyhatting games to skip Switch 2 in the future, and if they started doing that Nintendo would just use their own massive warchest to moneyhat games to skip PS as well.

Hardware is simply as important as software. If you want or need to play in handheld mode there are no games that will convince you to play in stationary mode

The rest of your post ir rather meaningless, because I never said Sony has any chance to sell like Nintendo in Japan, only that offering a handheld option is important for them to start selling a bit better. After all, the last stationary console to sell over 20 million units in Japan was the PS2

Vita with a shit library and no effort whatsoever sold 5.7 million in Japan. This is likely the current "real" PS5 sales in Japan, since it's abundantly clear the current sales are inflated due to imports

I believe a new PS6 and a PS6 portable are key to Sony keep having some significance in JP market. I believe they can coexist like PSP and PS3, just in a smaller scale (10~12 million for the portable, and 4~5 million for the stationary console) 

What i see the reality of the Japanese market:

Nintendo IP is incredibly popular, Sony IP fairly minor. When it comes to third parties, Japanese games dominate the console market in Japan, with fairly low sales for western studios there. That means that the only way for Sony to take meaningful market share from Nintendo in Japan is to aggressively pursue deals to make Japanese third party games exclusive to PS, and to skip Nintendo releases. It means they can't accept a situation where Final Fantasy, Dragon Quest, Resident Evil, Monster Hunter etc come out on Nintendo consoles if they want to be an alternative to Nintendo for more gamers in Japan. Basically Sony would need to recreate a PS1-PS2 era Japan, where every Japanese third party game came out on PS and skipped Nintendo consoles, i don't see that as a realistic future for the Japanese market. For every medium to major Japanese third party game that comes out on Switch 2, that is one less reason for Japanese gamers to buy a PS over a Switch 2. And the fact that Japan has seemingly fewer spec focused gamers than western markets also complicates things for Sony, because the PS handheld being better than the Switch 2 will matter less than the fact that it will also be more expensive than Switch 2 there from a sales perspective.

Sony is actually the second biggest publisher in Japan right now. Their games sells well with Ghost, Spider Man, Gran Turismo, etc

The only bigger third parties I can think of are Monster Hunter, Final Fantasy and Dragon Quest. They lost Square, but the sales had already crumbled even when FF was exclusive 

What hinders Sony IPs to grown is the lack of them in handheld form

Sony already had its "PS1-era lite" with PS4. So many Japanese exclusive games and yet they got destroyed by 3DS and Switch

The simple answer is Japan like handhelds systems. With a handheld system Sony will grown again

The reality

PS1 - great sales
PS2 - fantastic sales
PS3 - good sales
PS4 - not bad but not good sales
PS5 - needs help


PlayStation really only had 2 good generations and since then has been on the decline. Ironically, their decline in Japan started when they started to shift away from their home market. This isnt a hardware issue, no one buys hardware to shelf it, they buy hardware to play on it.

PS3 and PS4 are only 1 million apart. I'd classify both as "need help"

Sony is declining in Japan since the late days of PS2. 7 of the 10 best selling years in Sony history belongs to 1997 to 2004 period, this period they used to ship 3 million units early

PSP released in 2005 and was an instant hit that removed sales from their home consoles. PS2 lost over 50% of its sales in a matter of 2 years of PSP in the market. PSP was the sucessor of PS2 in Japan, not the PS3. Even more so because of Monster Hunter crazy during ~2007 that pushed Sony again to sell 3 million units yearly 

Sony killing Vita is what made them lose JP market, for japanese people there is no "real" successor to PSP until this day. They all went to Nintendo with Switch. It's not a coincidence Nintendo IPs that were never that popular in Japan started to sell like crazy in Japan last generation, Zelda comes to mind

I actually just looked at the sales difference between PSP and Vita and had no idea the drop was that hard. I hope PS6 does better in Japan, competition is always a driving force for innovation and pricing. But, Sony will have their work cut out for them if they hope to pull things around in Japan. While hardware will be a huge factor, they really need software that's their own (not third party) that Japan will eat up.

There are three factors for success in Japan.

1) Having Nintendo games.
2) Being portable.
3) Being reasonably priced.

The more a platform has the higher its chance of success.

Are they, though? This is how much publishers have sold in 2025 so far:

 These are based on Famitsu so it's physical only, but I kinda doubt that digital would be enough to make up the deficit.

This simply isn't true, Sony is an incredible small publisher in Japan:

At retail, Sony as a publisher has this year a 2 % total retail market share in Japan, below publishers like Capcom, Bandai Namco, Square Enix, Konami, Koei Tecmo. And even only counting PS5 sales, this year Sony has a low 15 % retail market share on PS5 in Japan. And sure, those are only retail numbers, but digital ratio don't matter much, because all those publishers that Sony are below also sell games digitally.

Famitsu Top 100: 2025 - nichebarrier.com

And if you look at other years, Sony is a small publisher every single year in Japan. PS software sales are dominated by Japanese third parties in Japan.

Ever since PS1, Japanese has mostly bought PS for Japanese third party games, meaning Sony is in a much more vulnerable position than Nintendo in Japan. Japanese buy Nintendo consoles to play Nintendo games as well as some third party games, Sony games on the other hand has a small market share even on their own console in Japan. Meaning, third party games getting ported to Switch 2 removes a major reason to even buy a PS in Japan. Nintendo has both vastly more popular IP and are now getting more and more third party IP that are popular in Japan as well, which is an enormous competitive advantage. The only way out for Sony is to either find a way to create more popular Sony IP in Japan, or to moneyhat an incredible amount of third party games to skip Switch 2 in the future, like the next Dragon Quest game and so on.