@andyg1971 I was thinking along those lines too, a few months earlier, but now with all the hints dropped and quotes all over the internet from official sources I have come to the conclusion that I have.

A good friend and very smart man once taught me the concept of deductive reasoning and it is a way of thinking that is not only logical, but has the highest percentage of getting things right, no matter what the subject of conversation is. It is simply a top down way of thinking, funneling all options towards one outcome, by filtering out the (more) unlikely ones, leaving you with the most logical answer in most cases.

Not saying that I am right, just that logically speaking, there's a reasonable chance.

Obviously things can change once we know more, but with what info we have now, it points to a console or a (software)platform that can be used on any device, as per the quote from mr. Iwata saying that in the new environment, console and handheld would be like brothers, hinting at scalable software that can be used on both systems. That would be something different from a hybrid, and probably more effective too.

Just for the sake of argument, hop on board this train of thought: a software architecture based on x86, just like the others, for maximum compatibility and not only more options for using the available game engines and related software/middleware, but also for keeping the door open for third party developers, regardless if they come back or not: at least the option will be there. The reason I go with x86 is that there will not be another PowerPC architecture since that is now effectively an obsolete technology. (although there are some similarities with ARM chips, but that is another story)

So, when they go that route then every engine or piece of software used can be scaled to fit the platform it needs to be on, be they handheld or home console. Those same engines are nowadays also used on smart platforms, showing how versatile and scalable they are.

All you need to do is tone down some options and effects and even the most powerful game engine (arguably Unreal engine 4) can run on anything that is compatible, and that is a pretty wide range of devices.

Taking in all that, costs can be cut considerably and hardware could also be made more powerful for lower costs. And revenues on games developed will be higher too, since development time will diminish considerably.

So, you could have the same game running on both a handheld and on a home console, where the game would simply take advantage of the hardware, scaling up or down as needed. And besides these games, there could still be a considerable percentage of specific games for each platform to differentiate between the two, but essentially, you could take your home console games with you on the handheld.

Because of the x86 architecture, backwards compatibility is also no problem, since that could be done by emulation. (the Dolphin emulator runs very smoothly, even on an average gaming PC, which is comparable to a PS4)

And there are even more advantages, but this is already quite a slab of text so I'll quit now, sorry for that...

Hope it gives you some food for thought, though...