Something I’ll add, Switch for the past three years is declining ~20% per year. That will likely increase to ~50% (+/-15%) given the age of the console and the likely release of a new console, if nothing else is done. But my previous post (along with posts by other users) shows some ways to offset that substantially. Dropping decline to the 20-35% range.

I wouldn't know if those parts were being used by other products at the time. If they weren't, it would cost them more than otherwise.
And from what I can see at least, the DS only had one official price drop in 2005? Nintendo DS - Wikipedia
6 years before the launch of the 3DS.

It's normal for a system to keep being manufactured some years after its replacement is launched. PS4's are still being sold.
With the exception of consoles that sold poorly to begin with.

But them getting price drops is not something I'd expect when the cost to manufacture them isn't neccesarily getting lower, but potentially even higher, especially since we are still dealing with a semi-conductor shortage (even though it's not nearly as bad as it was a few years ago) and worldwide inflation.

Nintendo made a 10-year contract with Nvidia back in October 20th 2016. We are getting closer to that 10 year contract closing. 
We have also heard from Nvidia's president, Jen-Hsun Huan, that they expect a 20-year relationship with Nintendo due to the Switch being an "incredible game console".

Based on this I expect that the Switch will be in production until October 2026. And Nintendo will make another 10-year contract with Nvidia beforehand in order to ensure that the successor will have a well-stocked production and solid sale rate.

I expect the Switch to have a drop in price once the successor arrives, as Nintendo will be wanting to get Nintendo Switch units off the shelves as fast as possible to make room for "shelf space" (more accurately, warehouse space). I base this info from the Wii to WiiU. A month before the WiiU launched, the Wii received a price drop of ~13% from $149.99 (in Oct 2011) to $129.99 (Oct 2012). The Wii was originally $249.99 when it launched a received 3 price drops in America (2009, 2011, 2012). No country has seen a permanent price drop for the Nintendo Switch yet, so that makes be believe that Nintendo isn't ready to bring out their successor yet.

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Lifetime Sales Predictions 

Switch: 160 million (was 120 million, then 140 million)

PS5: 130 million (was 124 million)

Xbox Series X/S: 54 million (was 60 million, then 57 million)

"The way to accomplish great things, is to be indefatigable and never rest till the thing is accomplished." - Joseph Smith Jr

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I think everyone expects successful systems to remain in production for some years. That's normal.
But whether they get price reductions, permanent or temporary, and the amount, is the question.

Productuion contracts have a lot of stipulations in them. For example to account for development cost changes.

No one was able to provide the amount of chips that had been agreed upon a couple of years ago when the semi-conductor shortage was at its worst. And they're certainly not in breach of contract for failing to deliver. I'm sure there are a lot of paragraphs in there written up by their army of lawyers to account for what happened.

PS5 for example has seen an official price increase recently in several major markets due to inflation.

The parts inside costing more for Sony to buy now is probably part of that. Even when they are able to buy more than ever, since people are buying their console more than ever. And that too is no doubt covered in the contract, forcing Sony to pay more.

Price drops appears less common nowadays than they were some generations ago.
Quite a few people here expected a PS4 price drop after PS5. But that didn't happen.
I believe PS4 only recieved a $50 price cut during its entire lifecycle.

MSRP for Switch and Switch OLED are currently $300 and $350 respectively.
What kind of price drop once Switch 2 is released are you expecting in todays market?

It's gonna be very close. At this point it's pretty much guranteed that the gap between the DS and Switch in sales will be less than 10 Million. Even at Switch's worse case scenario I can't see it selling any less than 145 Million.

It could go either way, but if I were to make a prediction i'll say it'll fall just short of the DS & PS2, as my current prediction has the Switch selling anywhere between 151-152M. This is mainly because I don't expect Nintendo to price cut the Switch or release new models for it, I have a feeling Nintendo would rather just force people to buy a Switch 2 instead by making the Switch 1's price so close to the Switch 2's price to the point where most people will just go for the Switch 2. Especially with how inflation's been, Nintendo would almost have more of an excuse to raise the Switch's price at this point rather than lowering it, makes me doubtful we'll ever see an official price cut.
Outselling the DS's 154M is certainly more plausible, while the PS2's 159M might not sound like much more, for a console like the Switch in it's 7th year quickly declining that 5M gap is pretty huge relative to that.

I could have sworn that the DS Lite dropped to $99 at some point, after the DSi and XL models were out; found this article about it but not much else.  I know it went from its launch price of $149 down to $129 when the Lite came out in 2006 for sure.  It's true that the DS didn't sell much after 3DS, but we have to remember that the $80 3DS price drop a few months in made the cheaper price of the DS useless, as 3DS was backwards compatible.  So 3DS was able to appeal to the lower-end market itself.  With Switch 2 likely being $400, Nintendo needs to have a product to fill that market and it needs to be priced accordingly for that.

I have no idea how much it costs to keep the Tegra going at this point and I know inflation is a thing right now but that chip is 2015 old.  I could see, maybe, if Switch had already had a price reduction but I think Nintendo is waiting for the system's one and only price drop to happen once its successor arrives.

DS Lite did go down to $99.99

Here's another article Nintendo DS Lite Suggested Retail Price Drops to $99.99 and Mario Games Go Red | Business Wire

Adjusting May 2011 USD to December 2023, that's about $135.74

I know price cuts seem to be a thing of the past now, but I could really see Switch Lite at $149.99 at some point. Or maybe they'll even take the 3DS price route, and make Switch Lite $169.99. Same numbers, but a less severe cut than 3DS (which was cut from $249.99 to $169.99 in about 6 months). 

If Switch Lite was $99.99, Switch was $199.99, and Switch OLED was $249.99, it's all but guaranteed Switch outsells PS2 as long as Nintendo makes enough Switch consoles. But as we've said over and over again, hitting about 158-165 million (surpassing the PS2), hardly seems like Nintendo's goal. They're making a killing on software and NSO all while still making a profit on hardware. 

If the Switch 2 does end up releasing this year, then I think the Switch will end up short of the PS2. Switch sales has been at an expected decline the past few years. Unless Nintendo does a permanent price drop to milk out as many additional console sales as possible, which I honestly don't know why they haven't yet since they haven't sold the Switch at a loss since launch, then it may end up around 5-10 million short of the PS2 imo. 

2024 so far has some nice remasters/remakes like Paper Mario TTYD, Another Code: Recollection, Luigi's Mansion 2, and Mario vs Donkey Kong, along with what looks to be a really fun yet smaller title with Princess Peach: Showtime, these aren't the kinds of games that will sell additional Switch's to a large enough audience to surpass the PS2.

So either Nintendo has some major tricks up their sleeve to get the Switch across the PS2 finish line, or they're saving all their major releases for a Switch 2 with maybe some cross-gen titles that will most likely cause the Switch to end up short. I'm leaning towards the latter. As soon as Nintendo announces the Switch 2 or whatever it will be called, Switch sales will immediately start to crater as everyone will start to look forward to the new console.

I agree that Playstation has had a rough time and needs to compensate for losses. But I'm not seeing that with Nintendo, even with the COVID shortages Nintendo was able to keep up with stock, and was probably the only console that excelled in it.

I make the assumption that we will see a price drop when Nintendo's Next Console is released (in order to move product and still be a cheap option for parents).
With stipulations and rumors floating with Nintendo's Next Console that being the price ($400 for cheaper model and $450 for normal unit), I would expect a minimum of $50 each; Switch Lite $149.99, Switch $249.99, Switch OLED $299.99.
Do you expect a price drop?

Lifetime Sales Predictions 

Switch: 160 million (was 120 million, then 140 million, then 150 million)

PS5: 130 million (was 124 million)

Xbox Series X/S: 54 million (was 60 million, then 57 million)

"The way to accomplish great things, is to be indefatigable and never rest till the thing is accomplished." - Joseph Smith Jr.

They better reléase new Pokémon lets go Chikorita this year and secure another 15 million seller and help hardware

Switch 2 can wait until Spring 2025