It's been dead since PS3. People need to let it go, We're lucky Japanese creators have a global audience.
Even with its current price, its size being an issue in Japan PS5 is outpacing PS4 by a large margin. PS4 sold a little over 9 million throughout the gen. We are at like 7 Million PS5's and were only halfway?
To me thats a sign of people still interested in Playstation. I think Sony see;s that maybe they can make a handheld that would do well in Japan. But their console is not dead.
It's steady. Just home consoles are not what they use to be in Japan. Handhelds, and mobile is where a lot of people game over there. China and Korean developers though have up'ed the game and are making console titles that draw huge player numbers.
So I think thats where Sony see's where they can still be viable as a desirable console in Japan by aligning themselves with ShiftUp, Game science among others.