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Louie said:

I'm not saying Nintendo is going to do this. I'm saying I'm missing cheap handhelds with "handheld" games on them - short, neat experiences. As for the games, obviously Nintendo first party titles would be the biggest draw.

As for market viability: As current consoles are overshooting a large portion of the market with their prices and features, it would actually be the perfect time to release such a handheld, as it would be disruptive to the established business model. However, it's unlikely for Sony or Nintendo to disrupt themselves (even though that's what companies should do).

But again, I'm not saying it#s going to happen. I'm just saying I miss these sort of handhelds (and if prices continue to go up there would be a market for it).

I think the biggest reason Nintendo won't do it is less about disrupting themselves and more that they had difficulties keeping first party output consistent in the Wii U/3DS era, because they had to divide their efforts between the platforms.

I think from a form factor perspective, Nintendo probably could make a SW2 lite that is even more pocketable than the SW lite (which wasn't too far from something like a Vita or 3DS XL in terms of portability), and I think there is a good chance they will do this to capture a larger market, but I don't think it would or should have a separate game library. We're better off for games being playeable on as many form factors as possible. 

Who knows, maybe we'll see a foldable SW3, as foldable screens get cheaper.