I have watched the youtuber Brainsforbreakfast's very entertaining video 'the rise and fall and rise and fall and rise of Germany'. In this he brings up reasons why it was Prussia and not Austria which united Germany.
One of the reasons he lists is the fact that the Danube, flowing through Vienna, directed Austria eastwards and away from Germany. For a while however, Vienna wasn't the Austrian, Prague was. And through Prague flows the Vltava, which runs into the Elbe, right in the middle of Germany.
I need to criticize various aspects of the video you are quoting here (
). In general the video is far to simplistic and promotes some stereotypes which we could debunk if we look closer at the details. In short, the video is bad and I don't recommend it as a source for further knowledge about history.
While Geography is an important factor, the author seems to use it far to deterministic.
Prussia was in many ways also oriented eastwards until the Congress of Vienna which greatly increased Prussian territories in the Rhineland. (Without the OTL-Napoleonic Wars, and the gains Prussia made in the 3. polish partitions, we have a really eastwards oriented country. Prussia controlled Warsaw for a few years for example).
While the Danube and Vienna is in an important position for trade into eastern Europe, the situation was far more difficult in Early Modern Europe. As long as Austria didn't control Hungary and had a unstable border with the Ottomans (and constant warfare even during official peace) trade was probably far more difficult across the Danube. This of course changes after the Austrians finally conquer Hungary at the beginning of the 18. century. Also there where negotiations and plans in the 18. century for Austria to annex Bavaria (and exchange it with Austrian territories in todays Belgium), while we shouldn't forget the Austrian possessions and influence in Italy. So Austria wasn't always pointed towards the East but a power with interests and possessions in multiple directions. (The eastwards direction of the Danube isn't important enough to determine their foreign policy)
Also Austria wasn't "isolated" from other regions of Germany as the video claimed.
Also while it is correct that Prussia had a better railway network, Austrians geography didn't prevent such a thing (for example is the geography between Vienna and Prag and between Vienna and Budapest relatively easy for building railways).
An earlier industrialization in Prussia compared to Austria could explain this better railway network, geography alone isn't a good enough argument.
This earlier industrialization and the relative backwardness of Austria is one reason why Austria was excluded from the "Zollverein" (a free trade zone between various German states in the 19. century). Still Austria-Hungary was an industrializing empire with a vibrant culture in Vienna in the decades before WW1.
The video also ignores, that 19. century Prussia was a multilingual country with a large Polish population (and some problems with Polish Nationalism, not as much as Austria had with nationalism but still not a ethnic homogeneous nation) and overemphasizes the backwardness of Austria. Yes Austria was backwards compared to other western European countries but not as much as claimed in the video. Yes the Austrian Empire was unstable in the 19. century, but the video is far to deterministic, without OTL-WW1 it could have survived. While not a global power, Austria-Hungary was still an important European Power with a significant army and even a navy at the beginning of WW1.
The Prussian army was not always as strong or superior. It was strong in the 18. century and in the 1860ies, but the Prussian military failed largely in the Napoleonic wars, and was really really weak in the 1840ies and 1850ies.We also need to remember, that while the Prussian army was better equipped and had a better strategy in the war of 1866, the battle of Königgrätz wasn't an easy victory, and an Austrian victory was also a realistic possibility.
Also we have to remember that Brandenburg-Prussia was not that important before the 18. century. The 18. century enabled Prussia to become the smallest and weakest of the European Pentarchy (the five largest powers of Europe), in a different timeline Saxony or Bavaria could have gained that role.
We could say more about the simplified depiction of WW1 and WW2. The video probably misleads in that it links today's French military expenditure to Germany (as a threat).
Now to your question: We need to look at Early Modern Europe again.
Prague has some advantages and disadvantages compared to Vienna. You have more problems with local nobility in Prague but it is far more secured from the Ottomans compared to Vienna. If the Habsburgs would have lost one of the sieges of Vienna, they would probably relocate to Prague. Other historical residence cities of the Habsburgs like Innsbruck are worse in their geography.
We need to think of the Hapsburg territories as a collection of various territories with their own traditions and laws under the same monarch (like we need to think about most pre modern countries).
But we have a slow process of increasing bureaucracy and central power over several centuries in Early Modern Europe. A royal residence becomes slowly a capital city with various palaces, governing institutions, monuments and culture. If it is Prague, Vienna would loose much of its OTL importance.
If the Habsburg dynasty had their main center of power in Prague, such a change would probably butterfly the OTL-rise of Prussia in the 18. century away, because you need a POD before the last siege of Vienna (1683) or earlier. Since the Austrians gained the crown of Hungary in 1526 (but not the control over large parts of Hungary), they would probably conquer Hungary from the Ottomans as soon as they are able to. Then they would control roughly similar territories compared to OTL.
Now we need to look at the ATL-18 century. Your Prague-Habsburgs could either loose territories (like Silesia in OTL), or gain parts of Bavaria or Saxony. It is impossible to predict the outcome, and depending which territories they control, the 19. century will probably change.
It probably takes several centuries after your POD until nationalism and ideas of self determination develop as in the OTL-19. century. It is impossible to predict the result. The Habsburg Dynasty could unify Germany or they could prevent it. Prague would be at this moment transformed into a city far more heavily connected to the glory of the Habsburg Dynasty (all those monuments and palaces in OTL Vienna are probably now in Prague), this would heavily impact Czech nationalism. Czech nationalism could either incorporate the Habsburg Dynasty and support them or reject them.
Edit: I forgot to mention that Vienna only gained its cultural importance and most of the beautiful buildings after the conquest of Hungary, before that, Vienna was largely a fortress since the border was really really near (which is the main difference between Vienna and other capital cities during that age).
