This is revisionist history, graphical leaps are judged in the time of their release, it might not look too pretty by today’s standards but Twilight Princess was a massive wow moment when it was announced.

Go big or go home, 200 mil.

I agree with everything Rol said in the OP. I just want to add that the announcement of Splatoon 3 was a big signal that Nintendo doesn't need to replace their hardware anytime soon. They aren't sticking to the "one game per franchise" rule that they often do. When you take that, Arceus, and BotW2 into consideration, then you should also consider that games like XC3 will also probably release on the Switch. Mario Kart 9 is not out of the question either. They can release second iterations of any of the franchises that they've already released.

People often say that the second game doesn't increase momentum, but Switch hardware isn't going to increase momentum at this point anyway. What strong second releases do is that they keep the momentum going. Hardware sales are not going to have the brakes put on them, because the first party software pipeline is strong. This makes player enthusiasm keep going, word of mouth keeps going, and the second hand market isn't flooded with used systems. Additionally, third party developers see that Nintendo is still putting out big titles and so they feel confident about releasing their own games on the Switch. It shows that the Switch is going to be a relevant system for years to come. So these first party games are inspiring third party releases, and all of this continues to drive momentum.

Essentially, these second releases of big titles like Splatoon 3 do keep Switch momentum going, and Nintendo has not shown any signs yet that it is going to let first party development dry up anytime soon.

I can’t really argue with any of this because it seems pretty sound, but I’m also still in the “It’s too good to be true camp”.

While I agree with your point, you are wrong. 

There is one hell of improvements to be made with modern hardware. Game studios just ignores that because many gamers are only interested in shiny objects and not the actual content. 

There is a lot to be explored with better AI or even ML on enemies in games that simply isn’t an option on older HW. There just isn’t any focus on it. 

Think BotW, with a dynamic world that changes depending on your play style. Also no two persons saves would have enemies and a world that behaves the same because no two persons have the exact play style. 

It's 140M from me.

Just in first 4 weeks of this year we see almost 17% YoY drop compared to the same period of time in 2021. IMO this year will end with 20% drop. 

These are my predictions (from the base of 25M in 2021). The predicted YoY drops aren't that far off from the Wii's and DS's. In fact, mine are more on the optimistic side. 

So to get to 160M, Switch would have to have yet another 20M+ year (2023 perhaps), or absolutely kill it this year (very unlikely). This is way too optimistic for my likings. 

The cliff is coming next year?

Tbh a drop from 20M to 12M seems a bit too much. Not even the Wii with a lack of games, dying gimmick, and already price cut multiple times had a sales drop that significant.

We're already going to see the Switch receive tons of games for 2022 and will likely move towards 2023 as well keeping the momentum for longer than the Wii. Nintendo also has alot of room for revisions, price cuts, ect, and we're still seeing the Switch in high demand going into 2022 where despite selling 24 Million in 2021 the Switch was still dealing with shortages, its unlikely we'll see a 24M system thats dealing with shortages sell only 12M with so much room for price cuts, revisions, and a much better game library.

I believe a drop off closer to 16M in 2023 is more likely.

Stock is the big factor here because, regarding demand, it's very unlikely that Switch ships less than 22m for the calendar year.

Nintendo expects 4m shipped from Jan-Mar.  For the big Oct-Dec quarter, the Switch is pretty much guaranteed to move >10m units (again) this holiday.  So that makes 14m so far.

What we're left with are the two middle quarters of the calendar year, Apr-Sep.  This is where I think Switch will have the biggest increase over last year's sales (8.28m) because of Splatoon 3, but just to lowball it, let's say flat this year, provided the units are available.

By this rationale, that's 22.28m for the calendar year and if the stock is there I think it will actually be a bit higher.

I wouldn't say "the cliff". It's just perfectly normal drop. Past year 5, each year the YoY sales (on average) drop by 20-ish%. The biggest shot in the dark is 2022 perdiction. If that turns out to be true, then 140M lifetime is pretty much given. 

Sure it's not going to drop as quickly as Wii, but more like the DS ... from 23M to 14M, also in year 7. To avoid it, Switch would have to have Gameboy-like sales curve and support.