I don't think Sony wants to go that route again since nothing can go head to head with Nintendo. Although, if it can do both that might be a game changer. Just give it games to play and not just remasters of PS4-5 games.
I would imagine the development of such a thing would be an even worse clusterfuck than how PS5 was developed.
Both the Switch and Steam Deck proved there is a huge and thriving demand for portable devices in the global market, whereas SIE would rather split and waste resources on the upcoming PSVR2 for a more niche audience.
But the biggest problem for Sony is that the Switch managed to undo nearly three full decades of damaged relationship between Nintendo and third-parties (something that Playstation has been mainly relying on
without much effort as Nintendo often struggled to get that right). Now you have a hybrid system (that acts both as a home and portable console) which can play Mario, Pokemon, Zelda, Fire Emblem, Smash, Animal Crossing, Splatoon, Monster Hunter, Nier, Dark Souls, Disgaea, Skyrim, Earth Defense Force, Vanillaware, Persona, Shin Megami Tensei, Crash Bandicoot, Saint Row, Ninja Gaiden, Borderlands, Warriors/musou games, Portal, Serious Sam, Tony Hawk, Atelier, Danganronpa, etc.
This list can keep going, but I think the point is clear. At this point, there is an absurd abundance of third-party support on the Switch never seen before on a Nintendo console since ages ago. While it is obviously never going to get every game, due to its limited hardware, it’s still remarkable just how much it ended up getting. People within a circle of friends/family can own a Switch, share a bunch of games for multiplayer, and individually find other games that fit their own tastes.
While SIE will get the western AAA third-party support for the rest of the PS5's life, its disdain for the japanese market has depleted the goodwill of the japanese dev support there. It won't certainly get better if Nintendo were to release a sucessor that fixes some of the current hardware shortcomings and could carry the momentum when transitioning to the next system (something that Nintendo also had problems with in the past).
The fact SIE considers the Microsoft-Activision deal (namely Call of Duty) to be a big enough to break the Playstation's success is rather sad too. It further shows how little the executive suits at California think of the Playstation brand.
