Good point. Could be a digital only device, but that didnt work very well for the PSPGo...or any other dedicated gaming system.

I think both and Nintendo are likely to do a Switch (which did a gamevice). They will have frankenstein controllers too. It's the right idea for maximum portability.

However, the portable SKU will always be a generation behind. I think a PS4P and XOP will need Tegra Xavier in it. When that happens it'll be 2018 or 2019 and the PS5 and NextBox are probably releasing in 2019/20.

I still hope they go for it. It's just another SKU (and form factor), but it will have a shitload of games and it'll be supported forever. Thing is, it'll have to be download only, so people will bitch about it, but SD card support is a must. I also saw an idea on GAF about a super mini that's download only (think Apple TV, but a tad bigger). As a download only person, I like that.

Nintendo made the switch as a counter to Sony's absolute domination.

Sony is still the absolute nr1,they don't need to counter anything.
Sony is done with handhelds

While Nintendo could have squeezed a bit more power into the Switch while maintaining affordability (their timing with the processor and need to release a bit early hurt them), they really came darn close to perfectly hitting the only sweet spot there is for this sort of "hybrid"/advanced handheld/w.e you wanna call it.

I feel like the handheld described here would melt in your hands and cost more than the Scorpio.

Oh, that's a good point too. That'd be one way to do it. I wouldn't really see them doing carts on top of CDs in stores.

Times have changed and people buy more digital now than ever. PSP GO is the only download only dedicated gaming system ever. It had problems with the proprietary memory card which was too expensive, but many people still liked it. 

A theoretical PS4P with high storage NAND inside and support for SD cards would tempt me. As would the aforementioned download only super mini SKU that I mentioned above. Tech is not there today though.

The Ouya didnt do great either. Neither did the Onlive thing.

What Sony needs to do to counter the Switch: Nothing.

Sony can't do anything because Nintendo puts their 100% into their portables. Sony only wants to give 30% tops, and focus the rest on Playstation 4/5. So they will never match Nintendo.

Is Sony willing to make a real mainline Uncharted game and release that for the portable? How about The Last of Us 2 only for the portable? No? Well Nintendo is willing to make Mario Kart 7 and other mainline entries for 3DS, and now with Switch it will have all their IP. Sony will never be willing to match that IMO. 

And with Nvidia as Nintendo's mobile chip partner, Nintendo could always match/exceed anything Sony brings to the market, Sony has no magical technology that Nintendo can't get from Nvidia that would be better or equal.

First of all, sony isn't exclusive king, not even close to, half of the games you listed are 3rd parties and if we made a list to compare the number of ips sony have vs nintendo, nintendo would pretty much triple it, not even talking about sales where nintendo first parties are way more successful.

Second, you and some people here are completely delusional and really need to study a bit about mobile chips before making posts like this, you know why? it's IMPOSSIBLE to have a handheld with ps4's power, i'm sorry to destroy your dreams but the switch isn't outdated as a handheld (it is for home console) and you can't have anything much better than it, even with an unlimited budget, there's not even technology enough to build a tablet with the switch's size and xbox one power yet, ps4 is even more crazy to ask, even the damn parker chip is wayyyyyy far from reaching 2 teraflops and it's nowhere close to ps4 memory bandwidth, and we are not even talking about battery, there's NO advance in battery technology and even if we HAD a mobile chip under 7nm as powerful as the ps4 it wouldn't run for more than a few minutes before running out of battery.