Assuming that lost sales need to go somewhere is a mistake. When the console market crashed in the 80's there was a point where Nintendo hadn't yet entered the game, and sales of consoles were just awful. People didn't move from buying Atari's to buying some other gaming device. They just literally stopped buying consoles. Both the 3DS and Vita were extremely underwhelming compared to their predecessors. When all options on the market are bad, the market will shrink. Smartphone games shaved about 20 million off the top of 3DS lifetime sales. But Nintendo's price/drought/naming/eyestrain shaved more off lifetime sales. A properly launched and priced 2DS XL in 2011 would have done 90-100 million units easily.
You are making the same mistake as above. Nothing needs to grab buyers. What grabbed Atari buyers when the console market crashed in the 80's? It wasn't Nintendo. They didn't show up until after the crash. You can't explain Atari sales losses, by saying that they all went to Nintendo. What best explains it is that Atari and all other consoles sucked at that point in time. So people flat out stopped buying them.
Mixing a new market full of mistakes crashing to a contraction (will you try and claim there was some crash and that if Nintendo decided for a new HH instead of Switch it would see 100+M confortably? No, because it is very clear the market shrunk due to indirect competition by substitive).
duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"
Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"
Azzanation: "PS5 wouldn't sold out at launch without scalpers."