You can't really call the Switch a competitor to, specifically, the Pro model of PS5. Because I play Switch downports sometimes and generally speaking they either look or run like dog shit. If I'm unlucky they do both. Its a totally different market segment.
Regarding western triple-A games, sure. Dying Light and Kingdom Come Deliverance were decent ports on Switch in my experience but it's not where I would recommend the most unless reasons. And the console is obviously not strong enough to handle demanding titles like the recent Space Marine 2.
But for anything ranging between indies, re-releases (remasters) of old games, remnants of the AA genre and Japanese games, differences are virtually non-existent on Switch compared to PS4/PS5. And these games do cover quite a large portion of the Playstation library which ultimately makes the Switch a competitor, especially with the latter holding a stronger selling argument as a hybrid system.
And we have Sony Interactive literally surrendering the entire Japanese gaming industry to Nintendo (and partially PC/Steam) for the years to come thanks to the culmination of bad decisions from the retarded american suits. Some Japanese third-parties may be still pretending not to notice how dramatically the market has shifted in Japan or have been hooked into giving their domestic market share away.
I can safely say no matter how Japanese devs and publishers decide to move forward, if they want any chance of salvaging their domestic prospects (and they definitely do care considering their past complaints in interviews and twitter posts), they’ll have to do it within this decade while fans of their IPs are both still alive AND still playing video games. Once they lose their clout in Japanese enthusiast spaces with not enough new fans to replace them, every best-selling IP that was relegated solely to PC and Playstation is basically starting from square one at best or will have to compete with the 3rd-party IPs that grew and flourished on Nintendo hardware in their absence at worst.
It's why we just got ports of Ace Combat 7, One Piece Odyssey, Yakuza Kiwami and the mainline Neptunia games on Switch this year. Not that the task was remotely hard, but because their devs/publishers didn't see the opportunity to build a new audience on Nintendo earlier until the disaster of Playstation became painfully obvious.
We won't see Playstation reaching the bottom yet until next year at the earliest, when the PS5 has to stack up against a pricier but far more performant 2025 Nintendo hybrid instead of the cheaper old-tech 2017 one. Expect the competition to be no longer bloody, but stomach-churningly gory this time.