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Sony doesn't need to do anything. The PS4 is still selling just as well, even though a new Nintendo console just launched. The truth is, Sony is the king of the home consoles, where Nintendo really can't compete. And Nintendo is the king of the HH, where Sony really can't compete. So, if the Switch continues to do well, I think we'll see each just do their own thing. Sony will continue to pump out consoles that are as much power as you can get in a $399 box, without too much of a loss. And Nintendo will continue making HH consoles that aren't as nearly as powerful, but has Nintendo's 1st party.

The better question is: What is MS going to do?