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Nintendo has always been the king of handhelds. I think it will definitely do better than the Vita but could hurt PS4/PS5 sales. If they shifted all their attention to a Switch rival sure but like many said I think the PS brand is synonymous with having the best TV experience especially in terms of power where as Nintendo don't need to go that route.

In a way both Nintendo and Sony are comfortable with each other's status as they both tap into markets that don't necessarily compete with each other so changing that now wouldn't be a good move and after the Vita it shows that Sony isn't a handheld company.