Sony is kind of in a no win situation here. The easy path is just to focus solely on home consoles. The home console market is where they have the greatest strength. But the problem with that is that the PS5 is going to struggle out of the gate, because Switch will just be too popular in 2020-2022. After that it still has to compete head on with Scarlett, Stadia, Steam and Epic Games. On top of that if the Switch's successor is the Switch 2, then it will probably be the most popular platform in 2023+. The hybrid concept can really be the future of console gaming as long as Nintendo wants to stick with it.
So then there is the other path that Sony could take, the hard path. Sony could release a handheld device and invest heavily into it, so that it competes with the Switch. This is a better long term plan, but it doesn't play to Sony's strengths. They will still probably lose on this path too, because Nintendo is so much stronger on the handheld side, but they actually have a better chance here since they could compete with the Switch directly.
In the end it is probably smarter for Sony to invest all of their eggs into the PS5 basket. Sure they'll lose, but they'll go down swinging and their hardcore fans will still love them. They can blame all of Sony's problems on "casuals" or something like that, so Sony still looks good and they might be able to eventually recover by the late 2020s.
Don't worry, PS5 won't struggle.
Stadia is a non factor, Switch (and its sucessor) means nothing to its sales, and PC gaming is also a non factor that has ever been there.
Scarlet/Anaconda will likely the the ones struggling, as PlayStation is by far the stronger brand, but even if XBOX grows back the PS5 will likely not struggle, at all.
So no worries here, it'll be fine.
I think it might even get more one sided with XBOX than it was this gen, actually.