I think it could happen in a couple of years, but Nintendo will still remain a hardware maker.
Switch is not in direct competition with PS4/5 and XBox/Scorpio any more than iPhone/Android phones are competition to Switch.
If Nintendo games are allowed on iOS/Android devices, IMO *some* Nintendo character IP will start appearing on Playstation/XBox/PC platforms eventually.
They will put a few Nintendo IP on Playstation and XBox to encourage those people to buy a Switch as their portable platform of choice and to earn some extra money.
And IMO you could even see Sony or MS games on Switch too, it wouldn't just be Nintendo "surrendering".
Nintendo is no longer really in the mainstream console market IMO, Switch despite how they want to brand it at launch is basically them going portable-only (it's a portable that can be used as a home device in a pinch). Switch and PS4-XB1-PC are not really "enemies" any more.
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