If Nintendo's successful devices relied on heavy western 3rd party support, I'd be concerned for the Switch's future. But since the best selling titles on Nintendo platforms are historically:
A.) Nintendo 1st Party Games
B.) Japanese 3rd Party Games
C.) Indie Games
I feel Nintendo will have it's own little niche area to itself. I don't need my Switch to be a PS5. I'm excited to see what developers get out of it as the console is very young. Square Enix has created a specific division just for Switch titles, Level 5 said all their upcoming games will be made with Switch in mind, Sega, Capcom, etc. have to support it in Japan by default. It'll be fine.
Now, would it be nice to have day and date AAA western 3rd party games on Switch? Hell yeah, but it's not part of Nintendo's successful DNA, for the most part. I see the Switch performing like the SNES, DS, Gameboy and 3DS. It'll continue to get great 1st party support from their rich library of IP, Japanese 3rd parties will make software to appeal to the Switch as it is dominating in Japan, and indie titles continue to sell the best on the Switch, even more than others combined. And that's fine because those platforms seem to favor more western styled, AAA games. I feel Nintendo just needs to focus on pleasing their largest demographic.
A lot of people may not see it now, but I think Switch, even in the midst of PS5 and Xbox 2 will have a bright future. It probably wont' get many next gen games at all, but it will get enough support because the device is selling well.
Basically any type of small-medium sized title (A-AA) is well suited for Switch, this includes
1. Indie games
2. Japanese games
3. Kid/family games
4. Last gen remasters
5. Retro compilations
6. Mobile conversions
7. Free to play games
8. Late PS4/XBO downports
These are currently the type of games Switch gets and for the most part they seem to be performing pretty decently and despite what some people are saying, the release of PS5/XB4 will have little affect on this type of support.
People need to realize that Switch is the successor to Wii U, 3DS and in a way Vita so we should be looking at it receiving the consolidated support of those devices.
I agree for the most part, but from time to time we do get and will get day and date PS4/Xbone ports that have parity with other versions. For example, Dragonball Fighter Z. But I guess that falls under Japanese games, so yeah I agree.
But yeah, the Switch does not need to be a PS5 or Xbox 2 to be a success. The categories that you've named basically cover what I expect from the Switch along with Nintendo's own 1st party killer library. I mean, we might be looking at the most robust library on a Nintendo platform in history when its all said and done and coming off the Wii U, that's a huge win.
With the projected support, I see Switch at least hitting 80 million units. Nintendo kind of created a market for themselves and I think it's going to go well for them. Like you said, with this support, Switch will exist and thrive just fine.