167k isn't terrible for Switch, but it is probably a tad disappointing. Last year was clearly supply restrained this year it's easy to walk into any store and see fully stocked Switch everywhere, sales should be up not flat-lining.
Letting Labo be the "major" release for the first half of the year was a mistake, Nintendo is going to have to start financing more projects to outsourced dev houses IMO (like they do with Platinum) so they don't get stuck with these drought periods. Before they launch a system they should really map out the full first two year lineup for that system and ensure they have ample software in development, more than what is even needed in case something gets delayed.