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I could see this happening... but not in the exact way they seem to be implying.

As the Switch gets older, we could see Nintendo transition from pushing it primarily as a home console to pushing it as a portable.

By making the Switch smaller in form, and possibly even going with some kind of DS like clamshell design, or maybe a model with controls built in, they can drop it to the 150-200 dollar price range, and have it serve the same role that the Game Boy and DS lines filled while creating a pure home console as well.