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I think is too early to tell, but we can't ignore the fact that mobile gaming already effectively swallowed the dedicated handheld market. Nintendo was smart enough to design a new device that offered something that the previous handhelds (and phones at that time) couldn't, which was the ability to play desktop caliber games on the go, as well as the ability to play those games on the TV as well. So now that mobile gaming has caught up with Nintendo's offering (in those aspects) again, I guess Nintendo will have to rely on the power of their IPs for the time being (which appear to be as strong as ever, judging by their sales) but yes, it will be really interesting to see how the market reacts in the next two years.
On that same note, here is a video comparing the latency on Switch vs Xcloud:
https://www.youtube.com/watch?v=RyzP0UhFwrs
