I'd also maintain I think there are factors at play beyond just "whether or not a new hardware is needed!".

If Nintendo ordered new hardware to be developed they likely did so 3-4 years ago, and if that hardware is now ready, someone has to be paid (someone being most notably Nvidia).

You can't just hire someone to paint your house and when they finish say "well it turns out I could've waited a year or two for my house to be painted, so can I pay you two years from now?". It doesn't work that way in chip design either. So I think the successor hardware chip was always going to be ready for 2023/2024.

Would you do a large job for anyone and then accept not being paid once the job is finished? Why do people expect Nvidia to behave that way? 

Nintendo can eat a bunch of losses by paying for it and not getting any revenue back I guess but I doubt they want to do that.

There's not much logic in sitting on a finished chip that you have to pay for, not making any money off of it, and then on top of that having a declining existing hardware that's bringing in lower and lower hardware sales and profit on a yearly basis to go with that. 

Yep, and the chipset that the new Switch seems to be using, the Orin based Tegra T239, was first rumored in 2021 and back in September 2022, the Nvidia employee confirmed it was a real chipset he was working on. I think it's safe to say this chipset will be done soon, and I agree that it doesn't make much sense to sit on a finished chipset design for a year or more just to push Switch 2 to 2025, especially since Switch 1 sales are clearly on the decline now. 

uhhhhh i really doubt we will see a switch successor until 2025

Right, but there must be some leeway. I mean, nowadays you can expect that a normal console lifecycle is 7 years. At what point will you order the new chips, in year 5 or 6? But what if year 5 turns out to be a stellar selling year for the current console, surely you don't want to kill it off prematurely. There must be clauses in the contract to extend the payment up to 3 years or just pay half and the rest later. In any case, even if they have to pay 100%, Nintendo can easily pay it upfront. It's no loss because once they actually release the console they have to pay nothing anymore. But such costs would easily be detectable in the Quarterly Financial Statements.

It isn't unheard of for a manufacturer to begin or even finish R&D on a chipset only for it not to be used. 

Some notable examples:

• Atari Panther: Scheduled for release in 1991. Hardware included a Motorola 68000 CPU (same as several other consoles from that era), but with a higher clock speed, 32Kb of RAM, and a 32-bit custom GPU made by Flare Technologies. Hardware was pretty much completed and even sent out to multiple developers. Product was cancelled in favor of the Atari Jaguar (which incorporated some of the technology here, with some changes)
• Sega "Blackbelt" (a.k.a. Saturn 2): Sega hired a team to create their next console. Sega contracted with 3DFX for the GPU, and were going to use a Motorola PowerPC CPU, though later changed to SH-4 by Sega's request. Hardware had been shown to some developers. At some point in development a different team began to look at creating a different console and contracted with NEC for the system we know today, the Dreamcast. 3DFX tried to Sega due to Sega actively exploring alternative hardware manufactures claiming it was a breach of contract (they settled out of court). 
• Project INDY (a.k.a. Nintendo Switch): This console was surprisingly feature rich (BC with 3DS, bluetooth support, voice chat, GPS, etc), but hardware-wise is a major step down from what was actually released. The console would feature an 4-core ARM A53 (released Switch has this too, but they are disabled and it instead only uses ARM A57 CPU) 1GB of RAM (as opposed to the 4GB in the released model), screen resolution of 854x480 (a little over twice the resolution of 3DS whereas the Switch that was released is almost 5x the resolution), and a GPU based on the Wii U's Latte chip, but reduced in power and features. 
• SNES CD (a.k.a. The Playstation): You probably know what happened here overall. Nintendo and Sony begin to work together on a CD add on for the SNES. Nintendo decides they don't like the contract that was built, so they announce a partnership with Philips. About a year later, Philips, Sony, and Nintendo get together to form a partnership on better terms, and also agree to include a 32-bit CPU and extra RAM into the CD add on. They reveal the release date to be in 1994, but a few months later Nintendo announces the cancelation of the add-on entirely. 

There are a whole bunch of other examples, from Project Atlantis, Panasonic M2,  to so many other Atari projects, do console manufacturers like doing this? No, they don't. However, sometimes these moves are necessary. Everything really depends on how far along the product was in development and what the contractual agreements are, and whether releasing the product is the best decision for the company. Honestly, I highly doubt any console manufacturer would sign a contractual agreement 3-4 years before a product launch that states they are legally bound to integrating a currently unfinished chipset into a product and supporting/selling that product for any meaningful amount of time. 

There’s also the factor of third party partners. These days games can take years to develop. It’d be bad business for them to delay just because “we don’t need new hardware right now.” A really bad justification for fucking their business partners.

Also, ”we don’t need new hardware right now” isn’t even a good argument since sustainable revenue and profit maximization are going to be what their corporate is interested in. Right now, Nintendo’s revenues are dropping fairly rapidly because of a decline in sales - 7% the previous year, over 15% this year. Unlike past generations, they don’t have multiple platforms to keep the ship afloat. It’s irresponsible for a company to tank their revenue

And, while I don’t know all the details of Japanese corporate law, Nintendo could be sued by business partners and share holders for unnecessary delays.

No, if the company is mismanaged, the shareholders can decide to remove the management to replace it by someone else.

The lawsuit would be in cases such as personal gain from company resource, the management being so bad the company end up in liquidation (thus making the one who invested in the company asking for damages/just want their money back), or very heavy stuff.

You're saying a chipset the next gen Switch is rumored to use isn't even out yet??? Let's remember that Switch released in 2017 and used a 2015 chip. If Nintendo is indeed using a chipset that isn't even available yet that almost certainly means a holiday 2024 or sometime in 2025 release date. Of course we have no idea with chipset they are going to use, but they want to keep the cost of the system down so whatever it is very unlikely to be bleeding edge so if they use chipset that comes out this year the next gen ain't starting anytime soon.

Also remember the launch timing relies upon games being finished and more games being closed to finished. Now presuming launch games would be MK9 and 3D Mario they have had plenty of time to make those so I wouldn't be surprised if they are close to being ready with those, but they need plenty more first party and third party games well into the works before a launch makes sense.

Also they have plenty of sales levers to pull with Switch since they are 6 years in and haven't pulled any yet other than new models. They could do hardware price cuts, software price cuts, and who knows maybe even a late lifecycle new model like I'm pretty sure the New 2DS came out super late in 3DS's lifecycle like didn't it even come out after the Switch?

Sales are indeed definitely slowing down now and 2023 will be the first year since 2018 that doesn't have amazing sales for Switch. But software is the lifeblood of the gaming industry and Nintendo sells TONS of software so HW slowing down doesn't mean we're suddenly gonna see a next gen Switch when they can keep making tons of money from Switch software for a good long while.

There's also that rumor, or well not even a rumor just a guy saying for some reason he thinks Nintendo might have a hard time making next gen backwards compatible with the Switch because I guess he thinks its gonna be a different architecture. If that is even remotely true Nintendo releasing later to either get a stronger chipset to make Switch emulation more easily done (in terms of performance) and having time to make a good emulator for it would make sense since they can just sell tons of software in the meantime and make bank off decent HW and great SW sales.

Theres been a guy in production work, thats a known leaker, on a chinese forum that got ninja'ed by nintendo.
After he started posting about things.

Plus a few other sources (like the one in this thread), that have hinted at it (sources that are credible as far as I understand it).
Like once you start seeing "where theres smoke there's fire" in threads about it, on resetera....

Yeah, its likely that sometime late 2023, or early 2024, there will be a Switch 2 (or whatever nintendo calls it).

also 6-7 years is normal for a console cycle right?
2025, would be like into the 9th year?

Not quite. The Switch 1 chipset was indeed a variant of the 2015 released Tegra X1, released 2 years later in 2017, you are right about that. However, the chipset that has leaked for Switch 2 usage is a custom variant of Nvidia's Tegra Orin chipset. Orin is a giant chipset designed for usage in modern car infotainment displays, it was first announced by Nvidia in 2018 and was available to purchase for usage in cars by 2021. The Switch 2 variant of the chip was reportedly ordered by Nintendo that same year, 2021. The Switch 2 variant of Orin is more customized than the Switch 1 variant of Tegra X1 was, it is significantly smaller than the original Orin, which could be as big and as powerful as Nvidia wanted it to be since it would be powered by a car battery and/or alternator, not a small tablet sized battery. In addition to being smaller, the original Orin had CPU cores spread across multiple clusters, but the Switch 2 variant has all 8 CPU cores in a single cluster.

We don't know the exact specifications of the Switch 2 chipset yet, but from what I have been able to gather, the ARM A78 CPU with 8 cores should have about 6x the performance of the ARM A57 4 core CPU in Switch 1. GPU wise things are less certain as we don't know how many GPU cores are in the Switch 2 variant of the Orin chipset. The best guess is that it will fall in somewhere between the 3.36 tflops of the 32GB variant of the original Orin, and the 1.88 tflops of the Orin NX 16 GB variant, most likely on the lower end of that range, closer to the Orin NX. RAM will likely be 10 or 12 GB of LPDDR5, of the 102.4 GB/s variant, compared to 4GB of LPDDR4 at 25.6 GB/s on the original Switch and 4GB of LPDDR4X at 34.1 GB/s on the Switch OLED.

So, while the Switch 1 was technically 2015 tech releasing in 2017, that doesn't paint the full picture because the Maxwell GPU was 2014 tech, and the ARM A57 CPU was only 2013 tech. As for Switch 2, we would be looking at a custom variant of a 2021 chipset containg both a 2020 Ampere GPU and a 2020 ARM A78 CPU releasing in 2024. So technically Switch 2 is slightly more outdated than Switch 1 is,  and it would be even more outdated as a 2025 product rather than a 2024 product.