The PlayStation brand is known for its massive, cinematic AAA single-player experiences, although the brand has spent this last generation investing massively into live-service multiplayer games that have either been scrapped, are missing-in-action, or have been killed shortly after launch in the case of the $500 million project Concord.
Yoshida explained that the PS4 era where Sony released titles such as God of War, The Last of Us Part 2, The Order 1866 and Horizon was better for AAA development as it was just before the cost of making huge games skyrocketed. While it "felt like going big was safer" just ten years ago, publishers were willing to invest heavily in this type of game, but now it's too much of a gamble.
Yoshida explained that the jump from the PS4 to PS5 AAA games has caused budgets to almost "double", despite the lack of an obvious technical jump for most games.
"I saw some analysis or estimate of one same franchise released during PS4 era and PS5 era generation double the budget," Yoshida told the podcast. "And that has reached the point that we cannot recoup this investment."

Ex-PlayStation boss reveals AAA publishers aren't signing as many games as the jump from PS4 to PS5 doubled the price of development for very little improvement
Former PlayStation boss Shuhei Yoshida explains that AAA development costs have doubled from PS4 to PS5, and there's little improvement
I suppose this makes sense not just in terms of the game cancellations, studio closures, layoffs, and the horrible conditions a lot of AAA games launch in, but also the fact that sap many AAA games, first or third party, can no longer stay exclusive. Sony's driver the cutting edge of tech at all costs has driven this industry to a very dangerous place where the production of a single game can sink an entire studio. I sincerely hope they put a pause to the insane drive for new tech, decide to stick to PS5 level specs for a while, and consolidate the development pipelines and infrastructure on that so that going forward we can get AAA games at this current level of graphics and tech that are easier and cheaper to make, don't ruin the studio, and live up to player expectations
Because otherwise, Sony's business strategy as it currently stands is unsustainable.