There's no "could be" about it, it IS detrimental for the business. 3DS might sell 100 million units eventually (though that could be a high ball estimate), but that's still more than 50 million units less than DS did. Wii U will struggle to 20 million units, a decline of 80 million units from one generation to another. Of course that's detrimental to the business. Even with PS4 off to a very strong start, Sony won't be able to match PS3 AND make up for the loss of unit sales that a weaker Nintendo brings, especially not with Vita's poor performance. We're looking at 130 million fewer Nintendo units sold, and tens of millions fewer units of Sony portables sold. That is bad for the business, no ifs, but or "could be".
Weaker Nintendo is an opportunity for Sony, though. In the long-term a cheap PS4, with the right software (think Singstar/EyeToy/Guitar Hero as late PS2 games) could gobble up the family market and allow Sony to move millions more consoles. Nintendo haven't been able to undercut Sony and hit the family market in Japan, Europe and North America from day one the way they did with Wii, and the main beneficiary of that in Europe and Japan will be Sony.
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