Console manufacturers will have to adapt and liberalize self-publishing to stay relevant. AAA gaming continues to enshittify, and indie games / smaller studios are the ones releasing the good titles.
Valve knows this, and the ease for developers to release on Steam means they’re well positioned to ride out the transition. By comparison, releasing on console means signing license agreements, getting access to proprietary SDKs, submitting your game through an approval process, getting each update reviewed, etc etc. The barriers make releasing on console very unappealing for smaller developers.
So IMO if the consoles want to ride out the decline of AAA games, they will need to reinvent their image and how they interact with smaller studios and indies.
I don’t think he’s being naive, he knows Trump is going to hang him out to dry, and he can’t win without ongoing US support. So if he’s come to the conclusion that defeat is inevitable, or at least that victory is impossible, then it makes sense to start posturing to that effect, to try to get the best outcome possible later at the negotiating table.