The fact that PC & Mobile market is so large in South East Asia is a huge opportunity for Switch actually,
That's why the region as a whole is the fastest growing according to Nintendo. In the past East Asia didn't represent such a large part of Nintendo's growth, compare that to the past two years years especially after Switch officially launched in China in December 2019. In the last QA Shuntaro Furukawa pretty much underlined it that it's biggest growth region.
"By region, significant sales growth is continuing in Asia, and we believe there is still room for sufficient growth of new demand in Europe and the United States, considering the sizes of those populations."
The overall growth was 65% for hardware & 66% in terms software for Other(Asia/Oceania/Africa)
From Media-Create the hardware sales South Korea saw 97% hardware growth & 70% physical software growth Year over Year, while Taiwan saw 68% hardware growth & 14% software growth. If growth continues strongly just these two markets would become as large as France is currently for Nintendo in terms of hardware sales. Combine China, Thailand, Vietnam, Singapore, South Korea, Taiwan etc. it's possible that in a couple of years Asia might overtake Europe
Your and mine theory: sony will lose East Asia for Nintendo, maybe will be concrete sooner than I thought. Maybe the China hero project will resist more, but China`s Nintendo performance it's great.
PS4 showed massive growth in Asia (bar Japan) and PS5 is only going to increase that userbase. Playstation is unrivalled in Asia in playing AAA console games from around the world, and the audience for such games is only continuing to grow in China, South Korea and Taiwan.
Japan's decline is also miniscule. PS3: 10.2 million, PS4 9.5 million (and this is with Sony not doing further price cuts). PS5 is actually outpacing PS4 in Japan. Another easy 9-10 million while Xbox struggles to do 100k.