That's true, and that's all mostly because Sony has no "must have" franchises in the west like Nintendo does and handhelds ARE more popular in Japan. Particularly seems to be because the Japanese don't find much time to play consoles so they play handhelds a lot more.
Sony has basically said they won't be making many if any big exclusives for the system which is sad. But on the other hand, a lot of Japanese games have been getting localized, which is surprising. If that trend continues, I'll be happy.
That said, I wish they would at least get Japan Studio to make more games for it. Their games would cater to the Japanese and the niche audience in the west, it would be great. I hope Freedom Wars isn't the last we see of them...