Lot of folks poo pooing the idea of a 'lite' console due to the XSS but as I've said elsewhere I think it was just a case of poor execution. I've posted this before but I'd argue if they did something more like this then the whole concept would've been much better received and would be causing far less problems; take a haircut on the XSX, simplify things a little and bring the XSS up to snuff:
If Sony could focus on scaling the GPU back to 50-66%, preferably by using chiplet GCDs, but retain the same clocks, featureset and other components, pull the RAM/Bandwidth back to ~75% and then differentiate/cut costs further with things such as storage/ports, non-critical features and knock-on savings as a result of less power draw/heat dissipation from the GPU (PSU, Heatsink, VRMs etc.) then they might have a winner on their hands.
In this eg. it'd pretty much be a case of scaling back resolution and perhaps picking between ML capabilities.
With a handheld PS6 more fundamental stuff such as memory bandwidth could hold back the main system.
If they are doing a handheld I'd prefer to see a dedicated unit that does native PS1, PS2, PS4, PSVita, PSP, limited Native titles & by then, maybe scaled back PS5 stuff; add in Remote Play, Streaming of all platforms, an Android/Linux sandbox...
It'd be really nice to get a whole new unified "PSP" line consisting of a PS Portal with an OLED, a PS Portable that is the same as the PS Portal but with local hardware built-in that can achieve the above stuff up to PS4 Pro level (and perhaps the aforementioned PS5 stuff) and a PS Pocket that is a Vita-sized device that is a real handheld but is limited to base PS4 performance. Options for everyone! They'd function as comprehensive legacy consoles and you could dock them too.
Ideally they'd miniaturise the PS3's problematic elements and even an early revision PS2(+PS1 subsystem) into a ultra-tiny, ultra-low power chiplet to be added in to SoCs on future mainline home consoles, handheld consoles, a low cost legacy console and their cloud servers. They could then monetise this further with add-on PS Plus tiers for each platform.
Imagine it's 2032 and you have a choice of PS Legacy, PS6 Lite, PS6 Slim & PS6 Pro; PS Portal, PS Pocket & PS Portable; and you can access nearly the entire PS1, PS2, PS3, PS4, PS5, PSP, PSVita & PS6 library in multiple ways across most of the lineup. to me, that would be real value.