I was hoping some collectors would know how many games were released for each region, as those total lists include all regions grouped together which would include the same games released multiple times. Plus I was curious if certain consoles were more successful in specific regions over others, meaning more releases in specific regions over others. This was the type of info that collectors on Digital Press used to have for other previous consoles, people tended to know how many games were available to collect a complete set for a console, but now nobody seems to know. I couldn't find this info with a quick search online either. Many of these online lists could be incomplete as well, they only have games added through user contributions and there could be less people caring enough to add every obscure foreign title for more recent generations.
I mentioned NES as it's a previous generation, really the 7th generation still had more releases than various earlier generations, it's not that every previous generation had more physical games than the 7th generation. Unless you meant the immediate previous generation only, though you mentioned PS1 games as well.
Really if you're going to compare an entire generation, you would need to add up all games for all consoles available for that generation. A main reason for the difference was already mentioned earlier by Aussie2B. The PS1 had so many releases because few people owned an N64 or a Saturn. The PS3 had less releases as more people owned an Xbox 360 or a Wii.
There's a few other reasons too. With the PS1, games had the advantage of lower development costs combined with lower manufacturing costs compared to previous cartridge based consoles, plenty of titles were released at cheap budget prices. Same with the PS2, though games weren't as cheap compared to PS1 budget releases. The PS3 era introduced the newer standard bloated development costs so there were far fewer budget releases released physically, and the real lower budget titles were just available digitally.
With the sales of PS3 and Xbox 360 consoles being so close, plenty of developers would focus on making multiple ports of the same game, rather than making multiple games for the same console. There were just less games made by developers during this time period.
Also, what type of games do you enjoy? Do you enjoy the various Call of Duty games as there's at least 10 of these for the PS3 alone, or the various other COD clones as there were tons of different similar releases that all felt the same to play. I sure didn't but that's what was available for the PS3, which is why I care so little about collecting for this generation.
Plus online gaming became really popular during this time, fewer people focused on single player games. Most people just all bought and played the same games so they could play online with their friends.