Playstation consoles never were "underpowered". The only noteworthy underpowered consoles to have released are Nintendo handhelds (excluding Switch), Wii, Wii U, and Series S.

PS1 was overall more poweful than the Saturn and much better designed than both Saturn and the N64 (Cartridges) which launched too late. Had Nintendo gone with CD's and launched the console earlier, the generation would have played out differently, and the most powerful console would have won.

PS2, though weaker overall than the GameCube and Xbox which released over a year later, was mindblowing at launch. Many consider it the single greatest "generational leap" of all time. MGS2 and GT3 were insane (and I came from Sega GT on Dreamcast). Graphics 100% constituted its hype.

Wii was a clear anomaly that capitalized on a temporary dempgraphic for a short but intense period of time. PS360 had better legs, but since they were eating at each other's sales, neither managed to win the generation.

PS4 won its generation as ths most powefrul console (Switch came at a different time and also mainly targeted a different audience. It wasn't "underpowered" anyway. The One X is a late upgrade).

PS5 will also easily beat the Series S. Series X is arguably more powetful but it's in limited production, Xbox isn't strong enough a brand, and the power gap between it and PS5 is the least significant in console history.

Hardware features/spec advantages matter when they are significant, more now than ever before. Series S vs PS5 proves it, as does Switch OLED vs Lite. Switch owes a lot of its success to the fact that it was a fairly powerful handheld at launch (that doubles as a home console thanks in part to its decent specs). Price and specs are both important factors.

When you know it's been only sold on Steam's website, i'you realized how well it is actually selling.

So we are 28-25 million away ?

22 million left by summer
16-18 million by Christmas
15 million by march 2024
10-12 million by summer 2024
3 million by Christmas 2024

160 by very early 2025

I think your numbers get the Switch to 150. 

Budget electronics just aren't as appealing to modern consumers. People want to feel "good" about what they're buying, electronics buying in the modern era is part "for pleasure", it's not just about getting some appliance that does a job any more. 

Poor/middle class people want to have a little "luxury" in their life too, it's not something that's "only for people with lots of money", it's a societal shift. Lots of people might be poor and have a ton of credit card debt, but you getting that new iPhone makes them feel good (for a while anyway). It gives you a little rush. 

That's why if you offer them a Switch OLED vs. Switch Lite ... they want a Switch OLED. If you offer a PS5 vs. XBox Series S ... they want the PS5. If the PS5 had a shittier cheaper model with lower specs (like Series S), it would share the same fate too, more people would just want the regular PS5. 

Consumer behavior has just changed from the 80s/90s/2000s. People who grew up post 1980 and now control the spending of their households are very different in their mindset from their parents who grew up in the 50s/60s/70s.

Underpowered may be the wrong word to use, but it is absolutely true that almost every generation it is not the console with the best specs that "wins". Atari 2600, NES, Gameboy, SNES, PS1, PS2, GBA, NDS, Wii, and 3DS. Depending on the generation you think it belongs to, Switch could also be considered one (vs. PS4/Xbox One). Almost every single generation a console that is not the most powerful sells more. Though you can excuse each generation by isolating one reason or another, with a pattern like this it's hard to ignore.

I don't think that Series S vs. PS5 proves the point that "specs still matter". The Series S is a console that has less features overall than the Series X. The same is true for the Switch Lite vs. the Switch OLED. The OLED isn't performing better because it has better specs (it doesn't), it's because it's fully featured. 

Now, do specs matter? Yes, absolutely. If the Switch 2 launched with specs barely better than the Switch 1 I don't think it would sell well (unless it had a REALLY unique gimmick to sell it). But I also think that spec advantages matter less these days because of diminishing returns. It is far harder for me to recognize the difference between 1440p and 4k than it is 720p and 1080p despite them being extremely similar ratio wise. 

For me too. Even 900p seems a very decent point resolution-wise, it's the sweet spot on my Steam Deck games when playing on TV

what are current numbers? 
128 million ? So I can recalculate lol

As of December 31, 2022 Nintendo Hardware Shipments :122.55million units

 VGChartz March 2023 stimates  123.91 million units

That's because the most powerful system traditionally had a number of real disadvantages (not "excuses"), like late launch and poor design. PS1 had a 2 year headstart vs the N64 which went for expensive (up to) 64MB cartridges, a terrible move that sealed its fate. "Power" isn't the reason the N64 lost. And the low pricetag wasn't enough to mask its inherent disadvantages. Price and power are meaningless without context. Past trends are of little relevance regardless.

PS5 vs Series S absolutely proves that. The Series S shares the same feature set with the X. The Switch OLED beating the Lite does have more to do with features, but features are hardware/price related anyway, they require better hardware and come at an additional cost. Nintendo isn't going to launch the Switch 2 at the same price or $50 lower than the OLED model lol. If they wish to repeat the Switch success, then I think it's best to go with $400 minimum (for the standard "expensive" launch model), which is today's equivalent of yesterday's $300. I think there is an overwhelming evidence that the average gamer is ready to spend more money for more hardware, Nintendo should take advantage of this and not be overly concerned about price being high. Pricing the hardware too low at the cost of specs/features is just as dangerous as going too high.

I too couldn't care less about high resolutions (1080p is perfectly fine, and anything over 1440p is a total waste of resources), but it's up to developers to decide how to utilize power, and since PS5 will be the lead platform for most relevant 3rd party games, even a "powerful/expensive" Switch 2 would only play them at relatively low resolutions. I very much doubt even $500+ Switch 2 would target high resolutions for demanding and AAA games.