Here's exactly why the DL series cancellation was a terrible decision by Nikon even if they weren't going to make as much money off it as they originally expected. From my In Box:
"Just before Nikon announced the demise of the DL series, I reluctantly gave up and bought my now college-age daughter a Sony RX100 V to replace the camera that she crunched when her light carbon-fiber tripod blew over as she attempted to insert herself into a dramatic image on a blustery day. I asked her to wait to replace her camera until Nikon produced a tiny DL unit with reasonable controls or Panasonic updated the LX100, but her birthday arrived and she wanted something sooner rather than later. She's delighted with the minuscule Sony. Moreover, I'm impressed: the Sony easily surpasses the similarly-tiny Olympus XA cameras that I used years ago while climbing. With that introduction to Sony, I started to ruminate on replacing my Nikon stuff."
Enabling competitors is one thing that you never want to do when you're part of a successful duopoly. Sony is now bracketing Nikon on what remains of the compact camera end, and successfully so. They've tried a couple of times to bracket at the high-end (the A7rII, for example) without quite managing to make a clean go of it, and I'm sure they'll try again soon.
Nikon has their work cut out for them. The only thing that truly defensible for them at the moment is FX DSLRs and perhaps the high-end DX DSLRs (but buzz, buzz*).
* Just a reminder: buzz, buzz is my shorthand for nagging Nikon for neglecting the DX lens set. I'm going to stay persistent like a fly buzzing round their head until either DX dies or Nikon comes to their senses. I just did a snap survey of D500 owners. From wide angle through mid-range, the majority are using third party lenses. Buzz, buzz.