No, they won't.
The Switch audience, especially in Japan, doesn't care about it being graphically competitive. It won't suffer from this any more than DS suffered from being massively less powerful than PS3/360.
Nintendo own is no problem for performance of Switch, but a big problem for third parties. FF and Resident Evil are planed to release for PS5 and won't move to Switch because Switch doesn't have enough performance for their devs. At now, Nintendo has a big market, but it is unsteady as the Wii used to be. A next challenge for more big and stable market is taking in major franchises.
If you need something about Japanese market from the perspective of Japanese, please contact me.