The problem with the standard market for Nintendo I really think was Microsoft coming in.
If it was just Sony + Nintendo ... Nintendo could have carved out a nice and very profitable section of the market in the range of 45-50+ million units every generation out without much of a fuss. Sure Playstation would sell more, but Nintendo made a ton of money off the N64 even at 33 million units.
Microsoft coming into the industry and doing dumb things like losing hundreds of millions of dollars made Nintendo competing for that market a bit untenable.
If XBox fades out of the market, maybe Nintendo might want to consider taking the Switch 2 chip and generously enhancing it for a home model.







