The point I think is that a “console” is from a certain PoV a locked down piece of hardware only able to run certain software in certain ways. So eg. Stadia was a console, while AWS virtual desktops are not, despite both being just VMs running on some cloud service.
Point is, it’s the software that makes a console, not the hardware.
I think there is a difference between “capitalism” and “capitalism”.
I think a more nuanced argument is that better games come from companies that are not primarily driven by the quarterly revenue cycle of Wall Street, that is defined as “capitalism”.
I think it’s more of a hit-and-miss, and good corporate leadership is the kind that people forget it’s there when good games come out. I mean CDPR had a CEO both when Witcher 3 was the thing, and also when Cyberpunk 2077 was the thing that flopped. Obviously, people were more interested in the beancounters’ influence in the latter case.