I'm happy that I'm not the only one to have this theory in mind. Thank you for posting this.
Yes, the writing are on the walls. After having repeatedly said that the portable market wasn't a option, their speech slightly changed some time ago when Nintendo began to rise again. Some Sony exec said that they couldn't ignore the Switch anymore.
If you look at recent JP multi-platform releases, it's clear that portability is still a thing in Japan. AoT2 PS4 accounts for only 40% of total sales, Atelier Lydie&Suelle sold half of copies on Vita/Switch, and if you look at COMG the Vita version of Persona 3&5 Dancing is the top preorder item atm. With Switch being even more successful abroad, they can't let Nintendo eat they margins further.
PS4 Mini (let's call it that) doesn't even need to be cheap, as last year has shown that customers are ready to line-up for a 300€+ product. Sony could set the price high while lowering the Pro, and sell it at a profit without the need of a big shipment objective. Even more feasible if it's a digital-only system. As I've just been writing, the rise in digital sales ratio opens the way to such a handheld. Monster Hunter World sold 700K digital in Japan, so there's increasingly less reluctance to non-physical games. Needless to say that would be hugely beneficial to 3rd parties, strangled by the cost of Switch cartridges.
There are two points I'd want to add to your thesis.
6. Slim stock has been drying up quickly in Japan for the past 3 weeks, while Pro is steady. There's absolutely no reason that Sony wouldn't be able to ship/manufacture the slim. It's just looking like they want to phase it out by E3. Still, there hasn't been reports of Slim stock lowering in the West.
7. Some JP publishers which have been relying on Vita have dropped Vita support way to fast. Compile Heart has Mary Skelter 2 (DRPG) for PS4 only, while the first one was a successful Vita exclusive. They also unveiled Yusha Neptune, a 2D RPG that could run on Vita but is PS4 only as well. NIS also has been forgetting about the Vita quite suddenly. Could those companies know something we don't?
I really hope we're into something with that.
