The sad thing for Nintendo is that they've already sacrificed their Plan B: their dedicated handhelds ecosystem. There's no fallback this time if Sony successfully enters their territory with a PS6 handheld.
And history tells us that direct confrontation with the main PlayStation ecosystem has rarely been pleasant for Nintendo. Just look at the N64 vs. PS1, GameCube vs. PS2, and Wii U vs. PS4. Nintendo's biggest successes came when it stopped competing directly with PlayStation and carved out its own space.
Now imagine PlayStation bringing its entire ecosystem into that very space. Nintendo knows exactly what's at stake. lol
Sony is re entering a portable market as an add on mission, after constantly selling 100+ units each gen.
Nintendo already abandoned the consoles/modern gen market and trying to keep up with Sony on the home console front. Why they release weaker gaming devices.
Technically both Sony and Valve are venturing out with their handhelds while Sony dominated the home Console space and Valve the PC side.
Nintendon is the one defending their market now, handhelds and hybrids. And they should win, but others will take a piece of the pie bit by bit. If Sony sells 100-110m consoles and then 20-30 million handhelds, they are already doing better.
Luckily Nintendo did a good last gen cementing themselves more.
Huge game sales, record breaking for their IPs, like Zelda and Animal crossing.
Theme parks and movie success has cemented them pretty well. So they will always probably have some success if priced well and reasonable expectations (like Switch 2 isnt gonna sell like Switch 1 and DS with that price point)
Nintendo's success is relied on cheaper retail price for commercial fans. Their hardcore fans are probably less than even Xbox. Consoles like Gamecube, Wii U showed they dont always show up.
Unlike Sony's, which there worst selling home console (PS3) still comfortably outselling majority of Nintendo consoles and all Xbox consoles. Numbers dont lie
I still expect Nintendo to sell more handhelds, and dominate Japan. But if Sony gets the price, marketing and games right, this will be a bigger issue for Nintendo then PSP and Vita.
This has the controls and library to be very different for Sony. Nothing like the PSP or Vita. This will have GTA6, Spiderman 3, GT8, Resident Evil 10, God of War Remake, plus the best place to play 3rd party on the go.
Nintendo I think will still sell 100m if they drop the price and start releasing Pokemon, Animal Crossing, Mario games etc