Apart from the downside of losing out on console units sold for Sony, companies are learning that user engagement across all forms of their brand is more important.
No. First off, the decreased console sales far outweighs the increased title sales, even if the ratio is something like -1 console sales to +10 title sales. If you sell a console, an average buyer will buy 10 titles over the lifecycle of the console (and core gamers usually buy 5-15 games / 1 year, not 10 games / 7 years). Sony took 30% of digital revenue and somewhat less for physical sales. Considering the fact that the vast majority of sales is digital nowadays, Sony could benefit ~$160 from each new system buyer ($60 * 8 titles * 30% + $60 * 2 titles * 15% = $162, this is just an example so adjust the variables if you want). You could argue that average sales price would be lower than that, but don't forget the buyer's profile. People who bought PlayStations just for one title usually have higher purchasing power than average user. A higher purchsaing power doesn't necessarily mean a core gamer, but it's a requirement for a hoarder (who bought almost every games, roughly an equivalent of hundreds of average Joe combined to the platform holder).
Also, an average user also pay for PSN+ (for about 1/3 of the console life cycle, which is 2-3 years). That's another $120-180 for Sony ($60 * 2-3 years). Overall, a system seller could bring $280-340/head to Sony, which is far greater than typical sales price of single game. Furthermore, once you bring people to your platform (PS/PS Store/PSN+), it's harder for them to dump everything they've bought/done there and make a fresh start elsewhere (due to the accumulated game libraries, trophies, friends, etc). In other words, it's not just affecting PS5 sales. It would affect PS6, PS7, and so on. You gotta remember that PlayStation, PSN+ and PS Store are the platform that Sony wishs to bring people in, not some titles.
If GT7 came out on PC, it would eat into the Project Cars 3 and Forza 8 sales. Unlock wheel support, give varying graphic settings, provide cross-compatibility for tournaments, that seems like a win, no?
Both are not really a competitor in terms of sales. Typically, the sales number of each GranTurismo series falls somewhere between 10 million to 20 million. That's more or less an equivalent of the entire Forza Motorsport series sales combined (and things not getting any better on PCAR side). In other words, GranTurismo is 5-15 times bigger than Forza or PCAR. So even if GranTurismo PC devours the half of PCAR/Forza sales (which is something never going to happen), you don't get much of growth. However, in return, you get a bunch of cheaters as this is inevitable for any PC game and no PC game ever won aganist the cheater. And that's bad for the user experience.
Even then, GT7 would eat into some hard-core sims. I'm not sure about you all or anyone else, but sometimes, I just want to hop into a random online race without too much thought, or even go deep into a career mode that feels like it's integrated into the game, GT has that polish that other PC racing games don't really have.
The fact that PC has the largest sim-racing market, it seems like a win-win. What do you think?
Again, sale revenue of a single title do not mean much. Many platform holders try to lure and lock the users in their platform at all cost, because they know those locked-in users eventually generate some revenue. A single title could become a platform itself and some games have proved that there are working methods. But Gran Turismo series itself has never adopted such business model (constantly releasing a bunch of micro transactions/loot boxes, unlimited or very high spending ceiling, etc) and even if they try to change it from now on, it's very unlikely to succeed.
The most lucrative model (at least in a short term) is the pay to win lootboxes, but this model is almost inherently incompatible with GT series. If GT adopted such model, it would be like a) giving you 92 Honda Civic initially, and b) make it almost impossible to earn any credit by just playing the game, c) sell faster cars for cash (loot boxes works better). Mind the amount of cash here is not something like $1 or $10 or $100. Some of the most predatory games out there with this model often charge more than $1 million for top tier items (like X2019, F1/LMP cars, etc) and $1k-100k is basically a price of low to mid grade cars (this may sound like ******** numbers, but there are companies which successfully generate more than $1 billion annual revenue for several years in a row). This is still at least an order of magnitude cheaper than real life racing, but it's not cheap enough for most people.
The other proven models, such as pay for skin, pay for in game credit, or subscription access fee, is certainly less predatory but they are not any better as no one ever had a huge success with those models on a racing game. In other words, the title is incompatible with those models and has very low potential of generating constant revenue, thus no point of holding people there for profit (at least not for the direct profit). PS/PSN+/PS Store is the platform where user generates constant revenue, and the GranTurismo is the lure. As such, giving it to PC is definitely a lose for Sony. And I would say it's lose for existing players too, as it would bring a lot of cheaters on PC side.
Microsoft has been releasing their first party titles to PC, but that's because a) Microsoft also sells Windows which is also a platform they can make additional revenue from locked-in users, and b) XBOX is no longer the platform that Microsoft want to lock people in. It's now Game Pass, and XBOX itself has become a lure for Game Pass, just like the first party titles. If you lock in 100 million people in Game Pass at full price (which is far from what they're charging now, because they're currently trying their best to bring people in), you get annual revenue of $12-18 billion and you could hit 30% operating profit margin for this kind of business. Mind that selling 20 million units of $500 consoles a year would only generate $10 billion revenue and 5-10% operating profit margin is considered okay-good for this kind of business (where negative margin is pretty common).
If you go to the site where you can buy consoles, accessories and games, directly from Playstation (direct.playstation.com) you'll notice something curious. Go to "Games" menu, then to "Shop games", you'll see a bunch of Playstation titles there, including GT7, front and center (at the writing of this post). Now, on the filters to the left side, select "Only on Playstation". GT7 disappears from the list, but Horizon Forbidden West stays. Ghost of Tsushima, also rumored to be getting ported over soon, also disappears from the list. By no means is this definitive. After all, you still find Days Gone, Uncharted (4 and the Lost Legacy) and God of War there, and we all know those games are either already on PC, or on their way there.
direct.playstation.com is not the Sony's main storefront. It's for physical copies (which is only accounted for ~20% of total sales), and the website is probably responsible for only a tiny fraction of physical sales in any country as most physical copies are sold through large retailers. On the contrary,
store.playstation.com is the main storefront (and it is responsible for the vast majority of digital sales) and its contents is more in line with what you would see on the console's PS Store app (either PS4 or PS5).
On store.playstation.com (or on console's PS Store), the name of collection is
playstation console exclusives* which means it's exclusive to PlayStation
among the consoles (not counting the PC). That's why mobile games like Genshin Impact (which was initially launched on iOS, Android, Windows and PS4 at the same time, and added to PS5 later) and Auto Chess (initially released on Android, and subsequently iOS and Windows, and finally PS4) are also included on the collection.
The PS console exclusives collection includes both Horizon Forbidden West and Ghost of Tsushima, but not GT7. Among the pre-order titles, Sifu is also a PS console exclusive according to their definition of exclusive (PS4/PS5/PC) but not listed on the collection as well. Reason behind this is unknown, but maybe there is some limit for pre-orders to be included in this list (release dates are Horizon Feb 18, Sifu Feb 20, GT7 Mar 4), or maybe it's just a lazy work.