It's really not that crazy
When they green lit FF16, they were likely hoping it would sell ~4 million units at launch (similar to what FF15 did on just PS4).
Then between ps5 stock issues, poor ps5 software sales in Japan, and lower preorder numbers globally, SE lowered their expectations to ~3 million.
The game sold ~3 million, which hit those revised expectations, but they're still disappointed that FF contracted from both FF7R (~3.5 mill at launch) and FF15 (~4 million on just ps4 at launch).
I'm kinda surprised FF7 Remake didn't do better either ... there were people who seriously thought FF7 Remake would destroy Animal Crossing in sales, lol.