I don't quite agree. The innovations the Switch is making have yet to prove themselves. Hard to say if they are what the industry should strive for. Is it really pushing the envelope? I really don't think so.

We need ecosystems, not less hardware innovation.

Switch is a great form factor, but it is not the end all be all. The future for Nintendo will be much better if they make the Switch successful, and release a Switch Phone and Switch Pro in 2019 - 2020 when 7nm Tegra chips are available.

There will always be a large market for high end home gaming devices. There always has been a market for high end mobile gaming as well, it just has not been done right in the last 10 years, and thus the market is shrinking. Switch could be the first step in a good direction, but it has to be followed up with a great business decissions, or it will fail.

From the last paragraph of the OP:

...we should see a stagnation in evolution of hardware in favour of a larger focus on keeping costs down and lower the risk-taking in creating games. That way we might see even more innovation in gaming and less focus on hunting PC levels of hardware all the time.

In other words, risks lead to additional innovation, which in turn leads to new genres being formed and a greater deal of variety in the industry.

Of course, if you're not all that concerned with variety, then the point probably doesn't apply to you.

I agree and i don't agree.

I agree the focus on tech rather than creating entertaining experiences is something detrimental.

But, i don't think gimmicks preset any kind of innovation. Just tired schemes to get more money off you that are dentrimental to the first point.

Basically, i want focus on the software, not the hardware.

That's what indies are for and they can coexist with AAA.

The Switch definitely does bring interesting ideas to the table and I do hope it does well. However, the consumers ultimately decide what will succeed and what won't. Gaming seems to be a very risk-adverse industry outside of a few examples. Nintendo will always have their tried and true franchises which will bring in their core audience but it remains to be seen if the Switch's innovations will reach a larger audience.

In my opinion, they will have early success but, with that price tag, the momentum may falter substantially after the initial rush or sales

For better or worse, consoles continue to get stronger because it's what a significant portion (i'd argue majority) of the market wants. If console hardware stagnates, the market will just shift further towards PC gaming. Even the current speed that consoles progress isn't enough for many.

A console doesn't have to be powerful to be successful, but personally i don't think the total absence of competitive hardware is a healthy line for consoles. Console hardware doesn't need to stagnate, they just need to ensure the development process is as simple as possible for the performance they offer. That trend has fortunately already started with the PS4 and X1, which has made the jump from the 7th to 8th gen relatively painless.

There is a lot of games that do not use extreme graphics on PC, PS4, or Xbone, and they still end up being fun and successful. Anime art style games like Persona, Disgaea, and Tales of games for example.

"And pushes the industry with other innovations besides graphics hardware"

Would you mind to elaborate for me what are those innovations that are going to push the industry forward?

Dude, you can play Rock Paper Scissors with your console. I mean what more could you want?