I seem to be quite isolated with my opinion but in my mind Nintendo with the Switch *is* that other console platform that challenges Sony. Sure, the philosophies are different (hybrid vs. home console, arcade roots vs. more "PC-like" gaming roots, multiplayer focus vs. single player / online focus) but at least for me these platforms are definitely competing for my attention. I don't play as many games anymore and my PS4 / Vita have gotten considerably less play time since the Switch launch.
Sure, Sony would drop prices (and do other things) more aggressively if there was as much head-to-head competition as last generation but competitors often just cannibalize each other.
To use a little Formula 1 analogy: Sony vs. Microsoft is a bit like Formula 1 from 2014-2016. It's Mercedes vs. Mercedes. It's pretty boring. There is almost no difference in philosophy and as a customer I can't vote with my wallet to tell the market in which direction I want it to head. Sony vs. Nintendo, on the other hand, is like 2017 Formula 1: Mercedes vs. Ferrari. Different teams with different philosophies fighting against each other. It's a lot more interesting and broadens the market. I prefer a growing market over a stable / shrinking one with only one type of gaming machine present.
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