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I'd opt for the fusion concept with a mobile hardware architecture, that could be realized in 3 different forms.

1. A shared architecture for both handleds and home consoles, with different form factors (shared cross-buy libary)

2. An handled console that can be attached to a TV with an HDMI cable or a docking station

3. (That's more imaginative) A modular console with a shorter life cycle that can be attached to different terminals, like a cartridge.