Nintendo doesn't need to get all PS4/XB1 owners, even just a small percentage would give them an added audience that pushes them close to the goals of the userbase they want.
Lets assume they hold most of the 3DS base ... so about 70 million there. With the Wii U there was probably in the range of 5 million out of 14 million that were unique users (no 3DS), so lets say that base also joins in, small as it is. So you're up to 75 million now.
If Nintendo can get even 15-20 million PS4/XB1/PC owners to buy a Switch, that pushes them up to 90-95 million. Isn't that something? That can be the added audience they need.
If you really think about it too, the 19 year old kid who bought a PS2 in 2000 at launch is today 36-37 years old. We're looking at an audience that's getting older, and IMO Switch can appeal to a lot of that crowd. That crowd can still play video games, they don't need some simplified controller or gimmick to get them to play, what they need is a system that fits into the time demands of their life, I think Switch has appeal there.
There is IMO a market of people who grew up with the NES/SNES/Playstation/PS2/360/etc. who can play virtually any type of game from years of experience of playing. But we are getting further and further away from the 90s/early 2000s every generation now. We're talking about the Playstation generation now heading into their 40s.
For a lot of people in this age range, really smartphone games for convienance sake are basically what they mostly end up playing or they end up just retiring from gaming altogether. I know many people like this. Switch can give them the option of a real game console that can scratch the itch for a real game of FIFA or Skyrim or Zelda or Mario Kart with nearly the same convienace of a smartphone/tablet and super easy TV capability too.
