I'm going to cut this one down to the biggest gorilla in the room, which would be the $299 price.

For whatever reason, Nintendo has displayed over and over the tendency to under ship during the initial release. In the instance of the Switch, they are launching during what is traditionally the "dead space" for games following the holiday glut, which can be used as the explanation for launching with a relatively limited release.

It doesn't appear to make much sense as the natural instinct is to launch in November, prior to the holiday buying season in the interest of scoring holiday sales, but if the initial inventory is modest, the Switch can still sell out on its initial shipment (I recall hearing 2m initial production run; don't remember the source), allowing Nintendo to make another play on perceived shortages, thus increasing public demand when stories of scarce inventory begin to make the rounds within the video game and even mainstream press.

Under said scenario, expect to see the Switch sell out repeatedly, not due to breaking sales records, but due to limited inventory which may and often does lead to increased demand.

Nintendo may be selling relatively modest numbers of units, but they can rightly say that these are off season sales figures (Nintendo makes the bulk of its sales during the holiday season, more so than MS and SCE) due to modest production numbers which means modest sales projections. They can't sell what hasn't been shipped. At this point, the two disaster scenarios would be:
A) Switch fails to sell even modest initial inventory with stock readily available everywhere
B) Switch easily sells out of initial inventory leading to hoarding, scalping and frustration by those who want one for play but have to pay a scalper's premium or check constantly for inventory at retail

Also recall that the launch price of the 3DS was $250, which dropped within a year in response to the PS Vita price announcement which gives reason to believe that Nintendo has built some flexibility into the $300 initial MSRP, with the option to reduce price, potentially by the 2017 holiday season, pending market conditions. Stockpiling of inventory for the holiday season would come as no surprise as units remain limited at retail through the first three quarters of 2017.

Sound familiar yet?

My suspicion of a potential price drop within the first year, even with robust sales would be supported by the fairly exorbitant prices on accessories like extra joy pads, docks, etc.

Even if the core unit dropped to $250 just in time for the 2017 holiday season, the prices on the accessories would make up the margins for Nintendo.

Assuming the limited release inventory has been pinched at retail through most of 2017, leading to perceived shortages and scarcity, an inventory build up for the 2017 holiday season, paired with a cut to $250 could very well lead to a big 2017 holiday season for Nintendo.

It's all speculation based upon a series of "must happens" but this wouldn't be the first time Nintendo has played this retail strategy.

That doesn't answer the question, though.  A lot of people here are saying that the Switch will be replacing Nintendo's line of handhelds, and them saying it's a home console first does not really confirm or deny anything (and is something I already knew).  What I was asking is if there's any form of confirmation that the Switch is going to be replacing the handheld.  I'm leaning towards no and would advise people to not get too excited over the Switch getting handheld games, given it's Nintendo.

I've never seen a console launch where the margin of sales could be so wide. Honestly, this could be anywhere from 20 to 100 million depending on various factors (price and library being biggest ones).

I have definitely been wrong before. I thought the Wii would bomb and it sold like hot cakes, then I thought the Wii U would do okay and it did terrible. Nintendo's focus on selling an idea or an experience over predictable metrics like Sony/Microsoft make them a wild card.

I am curious how it plays out and what games are in the pipeline for next 24 months.

How in the world does that response answer his question?

My late response:
1) Good point! But I wonder for how long they can keep this up. Mario Run kinda misfired, and I'm not sure it'll move a lot of HW units; they should have gone f2p on this one, especially since their next mobile games are Fire Emblem and Animal Crossing, with only one of those having a potential mainstream appeal...

2) Yes, Nintendo shouldn't listen all that much to hardcore fans, since hardcore fans only want a hardcore service.

3) Good throw back to GC and Wii! Really paints the picture of a new generation being a blank canvas.

4) I don't quite agree; having Western support can never be a negative thing, and lacking said support might very well be harmful.

5) I actually think the launch lineup is pretty weak for the first few months; people can't be expected to ONLY play Mario Kart and Zelda (while a great way to start your new gen with); they need something else to occupy their time with as well. The first year really has great games ( 3 potential GOTY's), but it's also important what you sprinkle in between the big releases.

6) Yes, Nintendo has been more focused as of late to only announce games that's actually in the pipe line, they haven't been focusing on games that's ready 2 years down the line - with the notable exception of Zelda.

7) Yup. Nintendo's main/unique selling point isn't new tech, it isn't about a new gimmick, it's their games.

8) I'm not entirely sure I get this point...? But I think there might be a chance that Switch will sell equal to, or less than, the 3DS - but it's really too early to tell right now. We'll see what's up this Holiday season.

9) Let's be real; a passionate gamer already owns one of the 8th gen consoles, or a PC, so that's bad wording on your part. I'm actually unsure of the validity of this argument, but I guess only time will tell; you could be right, but it feels rather far fetched.

10) The alternatives are mobile gaming, which is where all the "casualz" has gone. And since I'm unsure how the big market group of point 9 is, this is the market Nintendo should be appealing to - it's what made Wii so successful, and that's also why the failre of the GC didn't matter, because Nintendo tapped into a market that were more or less oblivious to it.

You make a lot of good point, but it's in the latter half of the OP where you kinda trails of into speculation, and it's here your arguments get weaker.

Totally agree with OP.

Nice bump. I still don't see the Switch selling so close to the Wii, would like to know more about its future lineup, multimedia apps and the online service coming this year. Another problem (or blessing) for predictions is that Nintendo has always made the "pro" revision for their handhelds, extending the life of said consoles (GB to GBC, DS to DSi, 3DS to N3DS), which I think a lot of people are ignoring about the Switch's sales potential.

Very interesting thread to read through. Goes to show it's a mistake to downplay a console's potential so early.

so many golden quotes