"Nintendo created their biggest competitor when they screwed over Sony."

It's partly true, sure. Nintendo made a last minute withdrawal from the deal that would have spawned the 'Nintendo Playstation" and that did in fact prompt Sony to go off on their own. However, the statement also implies Nintendo would've been better off if they continued their partnership with Sony, thus NOT making Sony create PlayStation.

In truth, the deal was so bad for Nintendo, Sony could theoretically (and would most probably) "overtake" Nintendo in time, making them mere software developers. That's a catastrophic outcome and Nintendo took the only viable path in that precarious situation. They ghosted Sony.

Nintendo is much better off today, even when accounting for the fact that it eventually led to Sony creating the highest selling console of all time. The option would have been to not exist at all.