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.
You said that Nintendo's the true biggest competitor. This is not a very common perception and not pretty obvious. When the console market is analysed, even by professionals, is always in terms of Xbox vs PS.
Nintendo is getting far different than Sony and MS since GC. With Switch, what Nintendo is selling is totally different than current gen consoles.
If we consider every platform that sell games a competitor. Yes, Nintendo, Google, Apple, Steam, etc are in the game. However, in terms of current generation classic console with the standard 3rd party library, there are only two choices: Playstation and Xbox.
It's obvious to see that Playstation owners might also buy Nintendo, Apple, Android, Google, Steam games. The same for Xbox owners. But Xbox owners usually don't buy PS and vice versa. So they're directing competing for the same audience. That's how they're each other's biggest competitors. Nintendo is a competitor, but not really the biggest competitor.
God bless You.
My Total Sales prediction for PS4 by the end of 2021: 110m+
When PS4 will hit 100m consoles sold: Before Christmas 2019
There were three ravens sat on a tree / They were as blacke as they might be / The one of them said to his mate, Where shall we our breakfast take?