First party?
Fromsoftware at that time only had PlayStation devkit, and it was the only platform they could develop their games on! Also, look at that game list.. all owned by Fromsoftware.
He's not saying FromSoft back in the PS1 days was actually a first-party; it was still an independent company, but the software studio's close ties with Sony (and the fact that, as you point out, they could only make games for PlayStation in its early days) made it feel the same as a PlayStation publisher. For a while, Armored Core was as core to many Sony gamers' understanding of the PlayStation ecosystem as Wipeout and Coolboarders.
(Actually, I believe the first Armored Core was even distributed by Sony, as Sony released some Japanese software on its own imprint in the US and/or Europe back in those days.)
You forgot to mention Sony loves them so much they forbid them to release Demon's Souls in the US with a Sony logo on it because they thought it was a terrible game.
??
"Forbid" is kind of an extreme definition of what happened. They chose not to publish it internationally, and put the product up for other companies to acquire publishing rights. That's their choice, and it's something Sony has done with other titles which were not expected to be core internal brands for its worldwide releases (they don't do that too often anymore, but they're also not doing the volume of titles that they did back in the PS1/PS2/PS3/PSP eras; lots of other PS games never got that chance to be published worldwide because there were no takers.) It didn't really even delay the game much internationally; the Japanese version came out in February, the localized US version came out in October and the PAL version hit a few months later. Not atypical for the time.
Demon's Souls on PS3 had a legendarily troubled development story (and it also had a then-obscure online system which would have needed support and explanation.) You can read more about it from an
interview with Shuhei Yoshida in Game Informer where he describes what led to passing on it and how the final product eventually shined through. Demon's Souls had started to finally take shape and gain interest in the very final days, and by the time it released in Japan, it became clear (in part because of critics driving interest in the game) that it really was something to get excited for.