The Switch isn't directly competing with the PlayStation or Xbox, so yes it won't be directly competing with Scarlett/PS5 either. Though that doesn't necessary mean the PS5/Scarlett won't cause a reduction in third party support for the Switch. They just won't cause a reduction in sales of the Switch, because the success of the Switch, like any Nintendo Console, is not reliant on third party software.
They are not direct competitors because the success of one does not impact the success of another. Unlike PlayStation/Xbox. No matter how well the PS5/Scarlett do, the Switch will still be doing great. The Switch entering the market with a hugely successful launch year had no impact on sales of the PS4, and PS5 if it has a very succesful launch will not be detrimental to the Switch either.
The fact of the matter is that it is competing. And the hypocrisy only comes in when it is a benefit to disadvantage the Switch and downplay its success in the face of its competitors. Because they do compete, for the consumers time, money, shelfspace. It is all part of the same industry, video game entertainment. Hence, it does not make any sense to say that they don't compete since there isn't even a difference in demographics. It's not kids versus older teens buying one or the other, it's more closer than you think.
It's all about the software that will make the Switch perform great well into Scarletts and PS5's respective launches. Because it will have a very good established library with a great exclusive lineup and many good 3rd party titles to choose from, on the go. Eventually, it will end like every other console. And then the next iterations will come to compete with that generation and so forth. This idea that they are not competing doesn't make sense.
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