Nintendo's strategy has always been for first party to do the heavily lifting during the first couple of years, and then third parties sell the system for the rest of the system's life. If you look at every successful Nintendo system this is exactly how it went. If you look at every system that flopped, it's because the third parties never came. I'm not even talking AAA third parties. It's more about quantity than quality. The term AAA doesn't even make sense on handheld systems, but Nintendo handhelds have always had a lot of third party games, and they always sell well. The real question is, "Does the Nintendo system have a lot of third party games?" If "yes", then it's successful.
The clearest example of how third party games impact Nintendo is the N64. It started out fairly strong, but then sales fell quickly. It just didn't have the third party games to keep it going. The N64 is what it looks like when Nintendo tries to sell a system on first party games alone. Switch has a lot of third party games and every year it gets more than the previous one. This is why even when hardware sales start to decline, it will be a fairly gradual decline. It's the third party games that keep a system from dropping fast.
curl-6 bet me that PS5 + X|S sales would reach 56m before year end 2023 and he was right.
My Bet With curl-6
My Threads:
Master Thread, Game of the Year/Decade
Switch Will Be #1 All Time
Zelda Will Outsell Mario (Achieved)
How Much Will MH Rise sell?
My Bet With Metallox