I think part of the reason the Switch has been able to compete with the PS4 and Xbox One is because Nintendo managed to include 4 GB of RAM in the Switch. Since the OS takes such a small chunk, that leaves games with about 3.2 GB of dedicated RAM. Compare that to the PS4, which has 8 GB of RAM, but due to the larger OS constraints, there is closer to 5 GB remaining to dedicate to gaming.
The next generation of consoles is going to aim for 4K, which works out very well for Nintendo, as it's likely that any game that's capable of running in 4K will be able to run just fine on the Switch 2's 1080p screen.
Note: I pulled these numbers off the dome, so I can't imagine they are perfectly accurate, but the point I was trying to make should make sense.
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