They will keep doing what they were doing before(and improving upon it), and they will still beat MS.
Honestly, I don't understand this MS x Sony. Microsft and Sony biggest competitor was, is and always will be Nintendo.
Tell us more about it, pls. Sony and Microsoft have been selling the same product with the same capabilities and specs so they naturally have to compete for the same audience. They're natural competitors in all basic business sense. How do you think their biggest competitor is Nintendo instead?
Do I have to? It's pretty obvious...
1 - Nintendo is the oldest player in this game. You never subestimate Nintendo.
2 - On the more tangible reasons, any company that is inside the gaming industry is competing with each other, dierctly and indirectly. And that's especially true for MS, Sony and Nintendo, which are all console manufacturers. MS and Sony are now catching up with Nintendo, entering into the 9th gen, which Nintendo has a "3 year advantage". Not only Nintendo has a bigger library that uses the Switch full capabilities, but it's an extremely strong library of first and third party games.Not only that, but it's biggest gun going into this holiday it's that it's going to be much cheaper than the PS5 and the Series X, potentially being 250 dollars during Black Friday.
When Nintendo was weak(During Wii U), it not only beat Sony in the handheld market, but it came back strong with the Switch. After countless failures, Nintendo never left the console war, while MS seems to be going the Sega route(which would eliminate it as a competitor, as far as Sony is concerned). And the the most important part of the industry, the software, is where Nintendo is easily the strongest of the three, in sales numbers, quality, quantity and variety.
Sony and MS may be similar in the hardware design, but that alone dosen't mean that they are their only direct competitors.They are first and foremost a hardware maker, and thus it makes Nintendo a direct competitor too. Add to that Nintendo strenghts, and they are easily it's strongest foe.