What do you guys think??

Have one system to support instead of two has been a great help to Nintendo and probably plays a big part in that. Of course, there are the usual reasons as well, being COVID & ACNH. Obviously I'm not suggesting that these are the only reasons, but they certainly kickstarted the momentum that Switch still seems to be enjoying. Also, I just think people are fond of the idea of having a system you can play on the TV and then subsequently take wherever you want (not a big deal these days due to travel restrictions, but still).

Nintendo just really hit all the right notes from the beginning with this system and it's popularity doesn't come from a fad, like what happened with the Wii.

The lack of popularity of the Wii U limited the initial interest in the Switch; but now it has a unique place in the market and has a very broad appeal among non-gamers, similar to the Wii

Traditional home console gamers were cautious after Wii U bombing

Handheld gamers who had just got a 3DS wait some time to get a Switch

Non Nintendo customers only got one after the very good word-of-mouth the system take a while to get

Long-term Nintendo customers (people who used to buy Nintendo and stopped long ago) comeback because... Honestly no idea, maybe they found the system cool and the concept nice, but don't had confidence to buy a Nintendo again. Years of Switch sucess bring them some confidence

It's probably a combination of X factors, including how the games were spaced out, what games are still in the future we know of, and how the PS and Xbox lines have been behaving.

I think the ongoing Software Lineup has a lot to do with this.

The following table includes games that have either sold 5+ million copies and/or were among the Top 10 best-selling games on their respective platforms (becaause we need to show some Wii U games). I'm also bolding best-sellers for each system.

Year 1 is "the year following launch day" and so on, which I chose because otherwise the 3DS and Switch with their Q1 launches would look strange next to the other systems and their Q4 launches.

Note that the DS peaked circa years 3/4, the Wii circa Year 2/3, the 3DS year 2, and the Wii U in Year 2. The Switch seems to have peaked in Year 4. Also note that some games were delayed in some regions.

A few things I notice from this

• The DS's peaking in its third and fourth years makes sense when you realize that many of the games listed in Year 2 were released later than that in the West, including Pokemon DP and Brain Age 2.
• The Wii peaked in the years where three of its five big games came out, with only the launch window titles of Wii Sports and Wii Play not coming out in this timespan.
• The 3DS peaked in 2012, by the end of which all its biggest titles besides Pokemon were out.
• The Wii U peaked the year it got its three big non-bundled games.
• The Switch has both its best-selling titles and its 5+ million sellers in general fairly evenly spread across its entire life so far. The main exceptions are the DS, which doesn't introduce any of its top sellers after Year 2, and the 3DS, which relies on Pokemon games for Years 3, 4, and 6, likely not attracting new audiences.

March launch in major regions. Not unheard of for a handheld, not a good sign for a home console
Switch is one platform offered by Nintendo now. It's not like the DS/Wii period or 3DS/Wii U period
Waning interest in Nintendo after the 3DS and Wii U
First-party droughts, and a slow start for third-party games

The NES, the Gameboy, and the DS are all examples that something like this can happen to Nintendo consoles (even if part of that for the NES is because of staggered releases, it still peaked in it's fourth year in the U.S. and probably would have peaked in it's fourth year as a result if it launched globally in the same year). 

While I don't think 2020 would have been AS good for Switch, it would have absolutely been up YoY still. Animal Crossing was massive on the 3ds and there is no reason to think Covid alone is what made people hyped for that game. Also, if Covid-19 hadn't happened, many games that weren't able to be released in 2020 would have been released, further helping hardware sales. On top of that, the tens of millions of Americans and hundreds of millions of total humans that lost jobs during Covid would have felt more secure in spending money on unnecessary entertainment like video games.

I thought that I was the only one who always get confused with this narrative of increasing game spending. Overall Covid has hurted the income of majority of families so I don't see how people getting less money exactly relates with higher spending in games

I'm waiting for some report of overall increase in console spending for 2020 to give this argument any sort of credibility