I believe they are incompetent. I believe too much laurels have been rested-on from PS4, and things are looking very tough ahead.
They can't outspend MS in the console market, and they can't rely on regulators to protect mergers/buyouts from MS or whomever else is lurking (Tencent, Embracer, Saudis). The same really applies towards investing. I don't see the point unless it's 51% of the vote, but I especially don't see the point I'd Sony is always the little brother investor to someone else's (Tencent, Epic's) larger amount? General consensus is they should have moved earlier, protected what they could, not let 3P relationships suffer or other people buy/invest in those 3P.
I don't care how many couple of sales they have from PC sales, sorry, Steam Sales, that they didn't lose to piracy or youtube movies. That funding, time, development effort could have been redistributed to more dlc or new games or shorter release cycles/better support longtail. They're giving their golden goose eggs to Valve at less than console retail price, they're losing 70% of that sale to Steam or Epic, and meanwhile, Steam have their own fucking gaming OS, Store and handheld ffs. At least if Sony had their own performant PS4 Portable (Let's just say that, or a PS Deck to make the point of power level) they'd fend-off that 2nd front of the war ahead. But they're too stupid to see the pincher move.