Sony didn’t really “double down”. The decision to wind down their physical games category was made years ago. Everything after the initial public announcement is to manage public relations.
Not sure many outside Japan realise but Sony are a conglomerate that dip their fingers into unrelated industries. This to them is clearly just a line through a smaller category on the balance sheet.
There’s a discussion to be had about ownership and physical games but i think that market is going to re-emerge in the future in perhaps a more bespoke way, like the resurgence of music vinyls.
To me, Sony seems to be interested in just managing the distribution of IP opposed to “gaming” itself. They’re not true custodians in that space or if they were, then they’re not now.