Nintendo is certainly not overrated. They are by far the only platform holders that have managed to workout a formula where they have been able to put out a variety of quality games at a steady pace and not fall trap to the endless issues that the AAA-chasing industry is now facing (looking directly at Microsoft and to a lesser degree Sony right now, where they are laying off staff and unable to maintain a steady release of titles). Outside of tiny players like GPD and such, Nintendo were the only major player taking a risk in the broader handheld space with the Switch which was the only major handheld gaming console on the market from 2017 until the Steam Deck arrived (and the 8 year old Switch has continued to outsell the Deck since the Deck's release in 2021, showing how Nintendo's software is capable of propelling their platforms). Much like the Switch, the next system will be dependent on if Nintendo can continue to release games at the same pace and quality that they have on Switch; if they are able to do that, they will have no problem selling the system. This strategy has worked well with all of their previous handheld systems as well (certainly not a case of lightning not hitting twice when Nintendo handhelds have included successes like the Gameboy, Gameboy Advance, DS, 3DS, and now Switch). And this competition will be good because Valve and Nintendo and other gaming companies entering the handheld space will push each other to prevent things from becoming stale.
Also, if consumers do not mind buying Playstations, Xboxs, and iDevices which all have walledgarden eco-systems, then why would they turn away from a similar device from Nintendo.