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Nvidia can match/exceed anything AMD can offer, they have more experience with low power tablet sized chips thanks to the Tegra line than AMD does and are a bigger company with more resources.

Bottom line is I doubt shrinking the actual PS4 is feasible for a long time if ever. The chip simply was not made to be shrunk down that much and operate at a 12 watt-ish power draw max (excluding the screen which eats up more power).

Sony would have to get a custom chip most likely and start from a library of 0.

Nintendo could very easily counter with a new Switch with a Nvidia chip that's just as good or better, but still have backwards compatibility with hundreds and hundreds of original Switch titles too.

The other problem is the RAM ... GDDR5 RAM is way too hot and power hungry for a mobile chip. It's not just the GPU. Change the RAM though and you radically alter games that can run on the system.