Having less hardware out there doesn't really matter. What matters is how active that userbase is.
The price is a fair point though. Sony games always get big discounts.
yeah, it's weird, sales dont scale with userbase. When there is 100 million Switch install base the games may not sell any better than they do now. Same for Xbox and PS.
That's why Switch is viable competition for PS4 despite technically a much lower hardware install base worldwide. And that's why PS5 games will be outselling PS4 versions a year or two into the next gem on a much smaller hardware base. The "active core" will have moved onto PS5, and tens of millions of PS4 will lie dormant.
It's more like there's a core of active console users, what is it, I dont know, 10-20 million? At some point that core doesn't grow whether 20 million or 100 million consoles have been sold. A lot of people's older consoles probably dont get any use, and they are replaced as active users by new hardware owners.
Probably a few games can tap the larger extended base to some extent (not fully). Nintendo 1st party, evergreen games like GTA/MInecraft....