As reported by US Gamer:
According to a Bloomberg interview with Sony's Andrew House, the head of Sony's gaming division feels that the mobile phone market has essentially put a hold on mobile gaming. Talking about the last mobile gaming device Sony released, the PS Vita, House said, "The Vita experience was that outside of Japan and Asia, there was not a huge demand. The lifestyle shift toward the dominance of smartphones as the single key device that is always with you, was the determining factor."
Likewise, Sony is quick to point out that the Nintendo Switch, which has seen plenty of success since launching in March, is not a true mobile console. "The Nintendo device is a hybrid device and that's a different approach and strategy."
So will Sony abandon mobile for hybrids? Nope. According to the interview Sony's current strategy involves delivering more products for home consoles along with VR and non-gaming entertainment like original TV content and music.
[...]
However, analysts and developers still express hesitation for the Switch, questioning whether it has lasting potential like Pokemon Co. head Tsunekazu Ishiharu suggested earlier this year.
It's pretty much all the same points that I was making when the Switch was first launched. Outside of the diehard Nintendo faithful, smartphones have pretty much destroyed the demand for dedicated handheld gaming devices, and (again, outside of Nintendo's diehard fans) there's no proven demand for a hybrid console/handheld gaming device, either. The Switch is off to a decent start, and is certainly doing much better than the WiiU did at launch, but Nintendo haven't been able to put enough Switches on shelves yet to really test how much demand there is beyond Nintendo's most ardent supporters.
Nintendo's ardent supporters have spent years lining up to fail to buy Amiibos, NES Classics, SNES Classics, and Switches, thus proving to Nintendo that they'll suffer any indignity in pursuit of the latest Nintendo thing, but it needs to be emphasized that this is not normal consumer behaviour. The Switch may be the next Wii, with appeal that extends well beyond Nintendo's fan base into the broader consumer market, but then again, it might not be, and we don't have enough data yet to be able to say for sure, one way or the other.
For Sony to decide that they'll wait and see whether console/hybrid consoles are enough of a thing for it to be worth their while to make one, makes total sense to me. Nintendo's handheld and console sales have been declining since 2009; trying to recapture that lost ground with a single hybrid device is a huge gamble for them, a cure-or-kill approach which will either create an entirely new category of consumer device, or kill Nintendo's hardware business completely. I don't blame Sony at all for refusing to cover that action.