Nintendo has the blue ocean strategy and it is set in stone that they will never have a powerful home console ever again. Going forward with the Switch concept just makes too much sense.
But let's assume Nintendo will bring a new powerful home console that is on par with PS5 and Xbox Series X. Would it really be a bad business decision? Let's say Nintendo will be the clear loser and only sell 20 million lifetime (an absolute worst case scenario, yes, Wii U sold even less but it is simply impossible for Nintendo to make so many mistakes at once again). Would it matter? Not if there will also be a Switch 2. You will say, it will be a regression to the Wii U/3DS days where the R&D departments are divided again into home console and hybrid console. But it will not be true because the home console games could just be scaled down to the Switch 2 the same way as now PS4/Xbox One games are scaled down to the Switch. Surely, Nintendo in-house titles will have no problems. If Nintendo don't want to waste their own people for the down-scaling works, well, there are plenty of studios out there who will be happy to do that job. 3rd parties on the other hand are now completely free, they can do just (day and date) one-to-one ports from PS5/Xbox Series X games to the new Nintendo home console or they do an additional down-scaled port for the Switch 2. You will say that nobody will port for a small installer base of only 20 mil (even much less in the beginning) but the new Nintendo home console will have a similar architecture as PS5/Xbox Series X and it will not be more difficult to port to it than to port from PS5 to Xbox Series X (or vice versa). The sales on the new Nintendo home console will potentially be good because those few millions will be hungry for new games. If the ports are easy to make, surely, the developers don't want to miss these additional sales of 250k to 1 mil. or even more.
Remember, a survey (https://segmentnext.com/2019/05/08/nintendo-switch-owners-ps4-xbox-one/) has proven some time ago that 60% of US-Nintendo Switch owners also own either a PS4 or Xbox One (I guess the number in Europe must be around the same). In conclusion, it would mean that potentially 60% of US/EU Switch 2 owners again will buy either a PS5 or Xbox Series X. But now they have also the opportunity to buy the new Nintendo home console instead. I think it's only logical that among those 60% are many gamers who like Nintendo games. It will be very likely, therefore, that a certain percentage of those 60% will buy the new Ninendo console instead of a PS5 or Xbox Series X (if we assume that the new Nintendo home console is really on par in everyhing (online service for example) with the two competitors). That's why I think my 20 mil. lifetime sales for this new Nintendo home console is very lowballing but even so it wouldn't be a wasted console (there's also Nintendo online to make profit from).
Nintendo would then have gone full circle: a Switch 2 Hybrid, later on a Switch 2 Light (handheld) and a powerful home console, all belonging to the same family of systems. Assuming that Nintendo doesn't make big mistakes, the Switch 2 Hybrid and Switch 2 Light will again selling like hot cakes and the new home consoles bring in additional revenue. The investors will be pleased too, they will understand the strategy if it's explained to them.







