Going more into Japan and sales
The issue is consoles aren't selling like they used to in Japan and while in west also hard to justify being switch only, nor does the switch have the power to run many of the big Japanese games such as Elden Rings or Final Fantasy 7 Remake, hell stuff like DQ11 took longer to come to switch due to the extra work needed to get it running on it.
If you look at the Tokyo Game Show the Steam Deck had a huge push, not just from Valve themselves but Japanese devs. The Japanese dev really need something like that to be a hit. Something powerful enough to run there games on the go and really doesn't need much in the way of extra dev work for them if at all. I have no idea if the Steam Deck will be the thing to crack Japan but someone will be.
Also PC gaming is having huge growth in Japan, yet Sony's PC port have all been western games so far. Sony is leaving money on the table by not being ready for the counting growth of pc gaming and the rise of machines like the Steam Deck.
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Honestly Sony trying their hand at another handheld but more in the vein of the Steam Deck and even using Steam OS isn't a bad idea, and in terms of costs would be far lower than making a PSP 3. But I really don't expect them to do however I could see MS/XBOX trying their hand at a window based one rather than making a XBox Series X Pro.