Aside from the bar of 'good graphics' getting higher and higher as the years go by, a big reason for there being 'no games' on PS5 is because the barrier to entry of game development has never been lower. If someone wants to make a game, team or no team, all they need is a PC with the right software and time to make it. Then they can just submit it to Steam or wherever for a price they think is fair and then just let it get played. That wasn't an option until the mid-2000s and PC gaming only started gaining momentum in the mid-2010s, which is right around when the console game selection started to get a little light.
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Combining that with the rise of mobile phone gaming at around the same time, the demand and desire to make games for consoles dwindled. Even though the job market for gaming got really competitive after 2000, studios weren't held to making things for consoles unless they were multi-platform. If the only option for making a game was to go work at a big studio subsidiary then there would be a HELL of a lot more of them getting made. Faster, too.