Yeah, because in the 5 years before that, the much MUCH more diverse Smartphone industry tried to make it work for several YEARS and failed.
Of all companies, Sony had the longest stamina, releasing 5 generations of 'compact' flagship devices.
If there would have been a sufficiently sized market for that, they would have continued and grown. In reality their business decreased every year.
Today the Smartphone is dominantly a media-consumption device, the only viable answer to "tiny Android flagship" is now a foldable like the Galaxy Flip.