There are many preferences out there, and AA/indie games can sell in the tens of millions as well. Some titles are more niche, but it's such titles that attract platform loyalty as they are a unique addition to the brand. Did having their two big AAAs delayed out of 2022 hurt MS's output that year? Undoubtedly so, it's a weak year overall. Did only having two semi-AAA games and no good AA games to fill in gaps hurt Sony's 2021 line-up? I would say yes. Right now there's a first party PS drought, as currently they don't have a first party game lined up between Ragnarok's release and that of Spider-Man 2's rumored September release date, a nine month gap. A less expensive to make AA game would have been nice to fill that gap.
Having a mix of AA and AAA in a first party lineup is what I consider ideal.