Sony this gen is a business model, not a gaming model.
They are comfortably above xbox, and have more wider content in their system. To them as of now, Japan isn't really big Market for them.
Like you said, switch has more softwares, due to 2 to 1 console, Japanese 1st party game, and being a Japanese company 1st. Sony can't compete that. Nintendo isn't xbox, which is a western company. They are a Japanese company, with Japanese soul. No way Sony can compete with that. So they are trying to leave that market slowly.
Cod, Fifa, and fortnite showed them huge amount of money. So they are catering more to the west, with western games.
As long as that

games exist, Sony won't focus on Japanese market.