While optimistic we shouldn't look at the Switch market as it is now to gauge the potential sales. In future years there could be budget Switch models with portable only mode selling less than £100 here in the UK and many other models in Nintendo's ranks. It could be you have a choice of 5-6 different models across a wide price range. Portables also get damaged/broken with use, more so than home consoles and many of the same users may make repeat purchases over the years. If you think of the Switch as a software platform representing a wide range of models across many years its future may look different.
It's fairly cheap hardware too, nothing cutting edge Nintendo have lots of options. The only real downside is Nvidia being the business partner they may screw up the success somehow applying leverage for higher royalties even on older chipsets and force Nintendo to move to a different hardware platform. Nvidia may just keep pushing for a larger slice of the pie keeping retail prices high and downsizing the possible install base.
There are other chipsets and other future competing products from Sony and other companies for hybrid consoles again these could do huge damage to Nintendo.
Also Nintendo software prices are very premium. Your money goes a lot further with android, ios, PC and PS4 which have very low pricing or heavy discounting for older games. It's another factor that will give pressure to reduce Nintendo's sales.
Lastly we are prejudging Switch demand too early. Yes there is low stock but at this point we don't even have an install base of 6 million, there could well be a slowdown.
If I was guessing now I would go with about a 60 million install base worldwide by something like 2022 but if everything went well for Nintendo I think they could as much as double that figure.
