Does this really surprise them? Everyone practically had to move on from PS3 and even Sony wanted to end that generation. (Not because it ended badly, but it was hard to develop for and third party complained). So then, everyone started buying games for PS4, Sony started releasing PS4 exclusive games by the first year.
The PS5 is practically optional. Almost every game is on PS4. I imagine many people don't care about graphics and performance, and only care about the game still available for the console they already own.
SIE was also "scared" that the PS5 didn't get as successful, so they didn't want to abandon the PS4 so quickly, but the consequence was that the PS5 is boring in general. Add to that, that they moved to a live service strategy (which hasn't been so great to them internally) causing very few game releases this generation.
In short, this gen sucks when it comes to PS Studios. Many great games from third party, though.