Lot of talk about FF7 Rebirth and FF16 flopping, when they really haven't, even more so with the pay hat Sony has given them. However at the same time, they are doing worse and worse in Japan every gen. Even if digital sales are great, I don't see total sales being better there than FF13 or FF15 pulled off in Japan.
Global sales for FF are higher than ever, but so are dev costs. Square is in a hard place, for FF to grow in profit they need to be on the Switch 2, on the other hand, fans of FF games always demand cutting edge visuals, with the only wide complaints for FF7 Rebirth is being graphical a inconsistent.
And this is really an issue Sony has in Japan, I don't think a killer line up of exclusive games in series Japanese fans love would even help them too much at this point. It's all about form factor, Japanese live in smaller spaces than those in the West and have a worse work/live balance, so a portable form factor just works better for them. PS Portal kind of felt like Sony trying to get that market but it was over priced, and streaming still has the distance issue.
The Vita was a hit in Japan but flopped everywhere else, so don't think a standalone handheld would be a good idea, especially with how few games Sony devs put out now, splitting them to make games for multiple hardware would just not work out well, and hybrid console is out of the question due to the power the PS6 would need.
One way forward I could see is Sony making a handheld cutback console, much like the Xbox SS but in a cutdown portable factor instead of just a cheaper console. Even still that is a hard power to price to get right, needs to be powerful upgrade over the PS5 to not limit next gen games, but at he same time not be unaffordable. Another way is to just make a PlayStation branded Steam Deck like handheld, with that format don't have to worry about support or putting extra resources into getting a game to run on it.