I don't think anyone was meant to imply that the Switch will be competing with what the PS4 is premeditated to release next year. It most likely can't, but that doesn't mean the Switch's next year can't be good. Right now the lineup for the Switch (TBD) are: Kirby Star Allies, Yoshi 2018, Fire Emblem 2018, some new core Pokemon, Project Octopath Traveler, Pikmin 4, Bayonetta ports 1&2, Bayonetta 3, Shin Megami Tensei 5, No More Heroes 3, Metroid Prime 4 - and then there are other third party ports (not exclusives) that can act as fillers, like Wolf 2. Half of these will probably be for 2019 but Nintendo did say they would talk about 2018 titles when it actually emerges (probably at their next Direct) so this is just reassurance that we will be getting something. For example, Tropical Freeze was announced and came a few months later. I wouldn't hold a candle at anything big releasing next year to compete with GoW, RDR or Spiderman, but if Nintendo did release Pokemon next year (which I will be shocked if happens) it would sell endlessly. We all know that Pokemon isn't a GOTY contender either, but it sells. All Nintendo need to do next year is maintain good sales, and 2019 will probably be bombshells.
Animal Crossing would probably be enough to survive next year plus the other titles, but that's not going to stop people from buying a PS4. More like being a HUGE system seller in Japan and the female demographic which probably will single-handedly ensure that Wii U sales don't entail.
The OP said directly that,"if you ask me Sony and MS both have a serious problem on their hand with the new challenger." Yarn Yoshi and Kirby were listed as evidence. Now, personally, I have no problem with those games and have no doubt they have their audience, it's just that I have doubts that it's the same audience that the titles I listed target.
I also don't get the glee some people show over the possibility that the Switch might be in direct conflict with the Xbox and PS4. That would hurt all of them, not just the Xbox and PS4.
If the OP wants to convince me that Sony and Microsoft are going to take a major hit next year because of the Switch then I'm going to need to see something more compelling to back up that claim.