Sony and MS won't feel the squeeze unless Nintendo starts taking away their target audience. That would require lots of 3rd party exclusives which would be very difficult and is not even Nintendo's strategy.

"Nintendo Isn't Making a Comeback" 35.82%. This Poll answer explains all. Nintendo needs to change in order to have a comeback. make 3rd party deals, support 3rd party marketing, hand out dev kits early, support gameplay sharing, reduce gimmicks, make more online games and support, support fan made content, improve marketing on your console (don't make weird console names), better graphics in games and media features.

They're moving in that direction

Considering the Scenario where against all odds the Nintendo is on top with the NX.
MS is likely to bow out before Sony in terms of Console manufacture, at least with the two current entries they are basically redundant.
The XB1's only positive differentiating features such as media, exclusives, hw capabilties (HDMI in) are trivial.
Price is motile, but the slight power adv on the PS4, gives it the edge on 3rd parties, which is important.
1st parties, haven't been important since the PS2.

Most people overlook the fact that the US, as a market is and always have been very contestable. The XB1's current performance, in the US is not "bad", but its also not a result of the 360's "Dominance" as some argue.

That leaves Latin America and UK (possibly).

Conversely, Sony has a much stronger hold on ROW.

Disregarding grey markets, ROW>LA + UK so if US was an even split, with NX at the top then PS4 > XB1

I am inclined to agree with you there sir. Your points were well stated

I am led to believe that this may very wel lbe Nintendo's new strategy

Comebacks typically occur when the company on top makes a mistake. Ps3's late and high price point launch led the wii and xbox 360 to get big. The final years of the wii and the wii u allowed sony to make a huge comeback

Nintendo got complacent when they were at the top, and now has fallen.

In order for Nintendo to make a comeback, we assume that the other two behemoths will become complacent, which may never happen.

Nintendo may burn out before they get a chance for a comeback, or they may just be fine with staying in third place

If they make a comeback, like a real/perfect one. All 3rd party support, stronger hardware, and better online then........ Sony will survive but will have to work really hard to get top spot. While Xbox already seems to be on the way out so MS will probably abandon/sell it.

This is my belief also. They are simply too far behind. Gaming has evolved so much and Nintendo has been playing catch-up or simply ignoring features that have been commonplace, some of which(region free games and consoles) have been in place by the competition since 2006... I played Donkey Kong Tropical Freeze last night at a friend's house(I don't own a Wii U) and the whole time I felt that I would much rather be playing Metal Gear Solid V. I actually found the Donkey Kong Country(by Rare on the SNES) series to be more fluid and enjoyable and those games are 20 years old now. Nintendo's focus these days simply is not enjoyable for me. Too cute, too basic, too similar.

The NX(if it is a home console) launching right in the peak of the PS4 and Xbox1's life will be a huge mistake. By that time the big gun exclusives on each respective console(Uncharted 4, Scalebound, Quantum Break, No Man's Sky, Street Fighter V etc) will be out and the user base for the PS4 alone would be easily over 50 million. Which 3rd party developer(besides Nintendo and their owned studios) is going to put out an exclusive on the NX when they can have a potential customer base of 50+million? Ditching support for the Wii U(which they seem to be doing slowly) will piss off their remaining fans much like Sega did when they pulled the plug on the Saturn. 

8.5 gen ;)