Sony is the market leader is gaming that’s it. Not most fronts they coverPS Now during some time was available on Vita, Bravia, Samsung TVs, Blurays players and other devices but they dropped their support there I assume because almost nobody was using it there. Maybe it was too early, back then subscriptions weren't that popular, the internet connection at their main countrys weren't as good and their streaming tech wasn't as good.
According to different related patents and relatively recent statements (a year or two ago) to their investors they are now working upgrading it to bring it to smartphones, tablets and smart tvs, who now start to have way better related tech like wifi 6, bluetooth 5, 5G and so on, in addition to improving the streaming tech itself, to include PS5 games there, improve the catalog and pricing, supporting more countries and it isn't clear but seems they were reviewing its business model like considering to include an Stadia like option to buy games (I assume separatedly from the PS Now sub) for streaming.
I think they are tweaking and improving this business before scaling it up hard to a way bigger, more global mainstream market. Maybe they think still isn't the time and prefer to wait until the related tech in smartphones, tablets, tvs and their streaming stuff itself still isn't reorady to scale, or that they need to rework a bit more their strategy and business model regarding catalog, pricing, etc. before scaling up.
Regarding MS, Sony generates way more revenue, has more subs and pretty likely are more profitable with their game subscriptions strategy (which also includes PS Plus), they are pretty distanced so I think aren't very worried about MS, whose Gamepass numbers didn't increase from January to June and we don't know how it performed from July to October because they didn't provide the numbers. In fact, if we specifically about how many people uses XCloud we have no idea because we never knew even the people who uses Gamepass Ultimate.
He was talking about their long term vision, stuff that they were going to implement over time. If you also include remasters, remakes and collections there are many PS1 an PS2 games. But again, I assume that like supporting phones or tvs he was talking as something for the future that they were going to roll out step by step as they keep evolving it.
I think streaming may start to be important in 5-10 years from now or later. Many countries and even cities and towns in the main countries still have shitty internet connections, routers plus phones, tablets, computers or tvs with crappy wifi.
We only know that PS Now has around 3 million subscribers and have no idea of how many users has XCloud, Stadia, Luna and so on, so it's fair to assume game streaming as of now is too small so it doesn't make sense for Sony to destroy the super successful business they have focused on mostly selling games for their console.
With their current strategy they are making more money than any console maker ever did, so doesn't make sense at all to kill their main revenue source (to sell games) to replace it for something that may or may not work somewhere in the future.
Notice the difference between the 'sustainable' and 'profitable' definitions.
Their main revenue and profit source is to sell games and add-ons for their console, game subscriptions is a tiny market that only generates a small portion of their money. So it would be stupid for them to lose their main revenue source for basically nothing. They prefer to include in subscriptions mostly games that already completed their sales cycle instead.
As of July they had around 18M, basically the same they had in January. In September they stopped sharing numbers, even if I think Halo and Forza will help it to grow again. But this is Gamepass subs, not Gamepass Ultimate subs and even less Xcloud users.
Sony has the money, but they have a different strategy that is more successful and profitable. They generate a shit ton of revenue, have a great growth, are profitable and clear market leaders in most fronts they cover, so have no reason to change their strategy for an unsuccessful/less successful one. They prefer instead to continue being profitable, growing and generating more revenue and software sales than any other console maker ever did.