Both Sony and third party tried their best during the PlayStation 4's first few years, there is barely any franchises that didn't end up on the PlayStation 4 at some point, hell even Level-5 at one point tried to support them. The issue is that as soon as Switch became a success in Japan, the audience third parties were aiming for started to transition. PS4 achieved it's best result in 2018 thanks to
MHW, but it was obvious that would be the last year that we would see growth on the system. Also at that time PlayStation ecosystem was already in decline despite
MHW launch because in 2017 as the Switch launched PSV audience started to migrate rapidly to the new system.
Overall the bigger issue for 3rd Parties is that PSV audience basically transitioned to Switch, which is evident by the results of Sony since PS4's launch. The system continued to receive support and contribute to Sony's decent results overall even though it was never the top performing platform for them. But the vast majority of games sold on the Vita were 3rd Party titles. Once audience identified Switch as Vita's replacement we can see that Software Sales sharply dropped by close to
2 million from 2016 to 2017 on the Vita, which up until that point had very stable sales of
3.5 million per year.
PSV/3DS games don't have huge budgets, so they were fueling decent profits for third parties like Level-5, Capcom, Bandai, Falcom, Marvelous, Spike Chunsoft, Atlus, Square, Sega and Koei. But this audience basically migrated to the Switch and third parties were very slow to react. Making a big game for the PlayStation 4 always ensures a risk from a financial standpoint, we've seen it this year with
Marvel's Avengers as you need to invest twice to three times the development budget into marketing a game in order to ensure it's a financial success - something Japanese Publishers even as big as Square Enix cannot do, to the level of Take-Two, Ubisoft, Activision etc.
2020 result of the PS4/PS5 will be below
5 million physical software sold, and that's despite
Final Fantasy VII Remake doing twice the amount of the best selling PS3/PS4/PSV game in 2015 -
Minecraft. In 2015 the PS Ecosystem achieved over
10 million physical sales. Right now digital sales in Japan are still low compared to Western market with 10-30% depending on title - with
Monster Hunter World Iceborne being the one outlier due to it's nature. So even if we've seen gains from a digital perspective in he last 5 years, it's not enough to make up the difference between higher budgets for development and marketing, coupled with longer dev cycles and smaller audience overall.
Next year will be even worse as I doubt PS5's lifetime sales will be above
1.5 million by the end of 2021 and there is not much chance that even with
Final Fantasy XVI we don't see further decline. This will be also felt due to the PS4 dropping like a rock compared to the PS3 which managed
3 million software sales in 2015. Compounded with Switch actually receiving 3rd Party support and one of the biggest 3rd Party franchises arriving on the system with Monster Hunter Rise(I don't count a late port of a 3DS game as MH's arrival).
hiska graph for physical sales in Japan:
Overall most third parties have seen sharp drops in their sales due to the fact they weren't able to transition from the PS Ecosystem into a multiplat strategy. One very easy example is the lack of high profile holiday games by third parties on the Switch up until this year, holidays is where 50% of software and hardware sales are achieved and the lack of third party sales ensured Nintendo and Pokemon Company were basically the only two relevant companies during the holiday period.
This holiday we can see actual third parties find success,
Sakuna from Marvelous was an unexpected hit and already achieved extremely strong digital sales due to lack of physical copies on the Switch,
Momotaro is already the best selling game by Konami in Japan in the last decade, Koei Tecmo basically shipped as many copies of
Age of Calamity as their best selling games ever for it's launch, GameAddict's
DerbyStallion is the next game that will surprise a lot of people with it's performance;
Atelier 2 is set to have the strongest launch of the franchise ever due to being a multiplat;
Fitness Boxing 2 will build upon the debut's success for Imagineer - still this year we would see further decline for Square, Capcom and Bandai because these three giants really failed to launch anything substantial on the Switch. Bandai is still doing alright because it does launch a lot of games and some of them end up on the Switch, the 3DS
Taiko port they are launching will definitely be profitable but this holiday has been a huge missed opportunity for all three.
Bravely Default 2 being pushed back, Capcom likely pushing back
MHR due to COVID and Bandai being Bandai
Next year things will change dramatically from a third party perspective. In terms of software sales most 3rd Parties will start to see huge growth YoY - Capcom and Square especially, while others who are already finding success like Konami, Koei, Imagineer, Marvelous will achieve record sales.