The thing about PC gaming is that the number of people who care about the highest-fidelity graphics as a selling point began to decline quite a while ago. 8-bit and 16-bit games have had a surge in popularity in the last few years. The majority of the top-selling Steam games have kind of a "Wii/PS2 HD" look to them - that is, they are clearly higher resolution than a Wii or a PS2 game, but no more detailed... some of them look like Dreamcast HD games. I do think people began turning away from the graphics race as early as the PS2 era, and certainly by the Wii era.

The Switch is selling because it's *not* the 3DS. It is not some low level game machine that relies a lot on kids. By going higher tier with the Switch you have a more compelling product that's resulting in better sales. 

If you do the whole "lets just ride this platform into the ground until it's badly outdated" thing that's not going to work for the Switch. Switch is a different kind of platform from the DS/3DS/GB lines, if Nintendo tried to make a "4DS" today it probably wouldn't even hit 50 million. Reason being smart phone games have really cannibalized the kids and budget market. The 3DS still has some sway there, but it's a small market. 

The higher end market is where it's at for Nintendo, that's where you have a device that does things you can't really get on a smartphone or tablet and they need to keep IMO at least a 1 generation gap minimum between the Switch the other home consoles. If you let Sony/MS stretch it to 2 generations difference, the gap is too large and the Switch will lose credibility as a hybrid console and really just be a glorified portable that has a TV out. So when Sony/MS go to PS5/XB2, Nintendo needs to introduce a Switch that is in the PS4/XB1 tier at least. 

Otherwise the Switch brand is going to lose luster, it's not going to work as a "well now it's a cheap little Game Boy" type thing!. You cannot have revisions that are just weaksauce and think people in this day and age are gonna get too excited. Who really got that excited about that New 3DS, nobody. 13 years ago that kind of thing is impressive, but today, nah. Consumers are more savvy and want some real sizzle on that steak. 

The Switch isn't high end though, it never was, from day 1 it was technically behind the competition. People aren't buying it for its graphics, two of its biggest sellers are Wii U games.

I do agree that the whole generational arch in sales is an outdated concept. That it would be better for Nintendo to release new hardware on a regular schedule, like Apple. Though I don't consider the idea of "outdated visuals" to be the driving factor so much as consumers wanting new hardware instead of old hardware. The new hardware has to have some sort of meaningful upgrade, and the easiest thing to do is update the nVidia chipsets... a benefit that Nintendo would be foolish not to take advantage of. Apple has managed it more than sufficiently, and gaming isn't even the primary application of their iOS devices. You hit the right term when you said Nintendo needs to keep their product a compelling purchase. And were I in the market for a new video game console: a Switch 2 with the latest in nVidia technology to me sounds a lot more compelling than the Switch that came out in Winter 2017. Especially if I know the games will perform better on it, and it will be supported longer than the older Switch model.

They can also do the price shift thing, where they drop the price of the old one, and maybe raise the price of the new one by a small amount. This works A LOT better than selling a new model from scratch that costs 25% more than the last one.

You're both right,

People aren't buying it for the graphics, but people ARE buying it because it's a compelling product.
And Nintendo is going to have to maintain that, otherwise they run into the generational arch where they sell up to year 2 or 3, and then in decline for 3, 4, 5, and 6, and then do it all over again from scratch.

Putting in a new graphical chip is an easy win, and then rather than declining from 15, to 12, to 10, to 6m, they can keep up the 20m per year level, and perhaps even increase it in 2020, 2021, 2022, 2023 and so on. We don't have to say goodbye the Switch and say hello to the Switch U, we can keep our Switches, new consumers get their Switch 2s which are more compelling purchases than ours, and third party devs get increased sales... as do first party devs.

This may be the first time this is possible with Nintendo hardware given the nature of the Switch... which is built with hardware that is generally made to be upgraded in this fashion.

I also think the next hardware would do best to launch the same day as Pokemon, with some other big first party game not far off that date: maybe Animal Crossing? (I would actually prefer Animal Crossing earlier, but business is business).

For a product that's portable, it's pretty high end. 

People are buying it because it's just high end enough to be feasible as a console. But if you let that run long in the tooth, that appeal fades and it just becomes a Game Boy type thing with a TV out. 

Keeping the discrepancy from modern home consoles to the Switch concept within 1 console generation is the key, that's close enough that you can have impressive experiences on the Switch that people don't associate with a portable machine that are relatively modern. PS4/XB1 are better hardware but Zelda: BoTW is still a game and overall experience that's relatively comparable to what you would see on a PS4/XB1.

When you lose the appeal of "wow, this little sucker can really play some modern style high end games" from the Switch concept, that concept as a whole loses a lot of steam. 

PS5/XB2 are going to become the home console standard soon, if you leave the current Switch to have to compare to that, it's too much of a gap, this is not the DS or GB where it's all about low-tech gaming and Nintendo has a monopoly on the kids portable gaming market anymore. That won't work. You want to keep the gap to one gen difference at least, so when they go to PS5/XB2, you should have a Switch ready that can play PS4/XB1 games maybe even slightly better than that. 

In other words, Switch should always have a hardware model capable of running a game like a Zelda or Metroid or whatever that is relatively in the same ball park of the other top end games of its day. When you allow a 2 generation gap, that's really not possible, the Zelda Nintendo can offer will look badly antiquated, like BotW would be if it had to run on 3DS tech instead of Wii U tech. 

What would you guys think if the next iterations are just called switch from now on. As in the name doesn't change but you understand that it's a newer or older model based on release year. Like how Dell has an XPS 13 every year but people understand the newer one from the older one

I think that would work fine, especially in an iterative cycle. Just keep it "Switch", no big reset or big fuss every time there's a new model. It's "Switch" and "Switch" is the ecosystem of software first and foremost. Like "Steam". 

And you can buy whatever flavor of Switch hardware suits your needs. 

I guess we're just gonna have to disagree, the way I see it, from day 1 Switch was never getting the Battlefields, RDRs or Witchers of the PS4/Xbone space, it was selling as Nintendo products have for over two decades now on its first party killer apps. Heck, it's latest system seller, Pokemon Let's Go, looks like a 3DS game in HD yet its got people the world over running out to buy a Switch.

Nothing about the Switch strikes me as a system that's dependent on being technically up to date to sell.

Yup, we definitely disagree, in any case, if you expecting 1440p screen resolution you will probably be disappointed same like you was disappointment with 720p with current Switch.