Too many discussions focus on Sony, not on Nintendo and Steam.They will need to redefine their image if they are to do that.
Nintendo is about gameplay and fun first, everything else second.
Sony's image is more closely associated with the perception that they are providing the most polished single player experience you can get, and that doesn't come cheap.
You cannot make God of War, Uncharted, Horizon, Spiderman and a Last of us every two years.
And right now, it seems that they need a huge game (or more realistically two) every year to compete...
I feel that if MS goes for one more publisher, or a few well targeted individual studios, the game is over.
And it's a shame really, because there is a uniqueness in what Sony does and it would be sorely missed if push comes to shove and they have to cut back.
Just think that who will be affected most seriously?
It is most likely: Steam > PlayStation > Nintendo.
Because Nintendo has the most famous IP ever and then Sony also has many 10 million sellers, but Steam has least AAA exclusive games.
How can Steam not be affected since Bethesda's games launch on day 1 Gamepass for PC?