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Why would anyone buy a 2nd Nintendo portable line?

In a year they'll be able to easily offer a Tegra X2 Switch which is smaller and has double the battery life of the current Switch. So there goes your "yeah but battery life and system size is a problem) arguement. 

So what exactly would be the appeal of a DS3/Game Boy? Switch would get all the main Nintendo IP, it's already confirmed for the next mainline Pokemon RPG too. And Switch will scale down in cost too over time. So it'll be $199.99 in a few years. So there goes your price arguement. 

I mean they can do whatever they want ... I just don't see who would buy it. People who are cheap and don't want to spend much on portable gaming are mostly going to play on smartphones/tablets.

More likely IMO they scale the current Switch down to replace the 3DS, and then release a higher end Switch with PS4/XBOne performance + VR ability in 2020 or so (Tegra X3 processor) for take over the higher end $300 price bracket. Older Switch model continues to sell at $199.99. 

So all you'll see is a continual flush of the high end model becoming the cheap model and a new model replacing the former high end model. That way Nintendo continues to get in effect a "dual pillar" hardware setup that they have now with the Switch + 3DS, but they still get all the benefits of a unifed library (large singular userbase that all their IP games can sell to rather than being split up in two, unified dev resources for more games on one platform).