I agree with you that, PS and Xbox are competing in the high end console space.
They're trying to sell you similar products.
Nintendo are clearly not.
But my counterpoint to you is that all these different companies are competing for your time, be that Nintendo, Sony, Xbox, steam, apple, hell I'd even include Netflix and the like.
For e.g I come home from work and gym, after I've showered and eaten I've only got so much time before I've got to go to bed.
I've got a choice between watching my shows or playing my games.
That's the competition that I think people are talking about.
It's a choice between PS, switch, Xbox etc.
Your talking about marketplace competition. As in what product to buy at the shop.