This is incorrect, Nintendo wouldn't have their arms tied at all, they're the best sellers right now and many companies would be willing to work with them, no Nvidia and AMD aren't the only options . Sony also makes their own processors so that's incorrect as well, they're not beholden to anyone. ARM doesn't compromise backwards compatibility either, Apple proved that with their M1/M2 Macs.
We will have to wait and see for those other companies that could produce amazing tech and would also be willing to enter into those long term low margin contracts instead of going into more lucrative business. Nvidia opted out from PS4/Xbox one for a reason.
Nvidia gave AMD the PS4 because console margins are terrible
Nvidia and Sony talked about the PS4 -- and Nvidia apparently walked away from the discussion. From the GPU designer's perspective, it may not have been a bad idea.
www.extremetech.com