This isn't necessarily the case. Most EA games, for example, could easily be scaled to Switch performance levels without too much effort or even compromises. Yet they don't come to the platform, nevertheless. An there is nobody more money-hungry/profit-seeking than EA, in the industry. 

https://www.ign.com/articles/2019/07/31/ea-explains-why-it-offers-limited-nintendo-switch-support?sf106268628=1

“Any time we’re evaluating platform conversations we’re really looking at a couple of things,” said Wilson. “One, does the game really fit the profile of that platform in terms of the control or the community ecosystem? Two, do we think the community playing on that platform would appreciate the game and go there, or would they prefer to play it somewhere else?

“We have a lot of data that would suggest a great many Switch owners also own a PlayStation 4 or an Xbox One or a PC and very often choose to play the games that we make on those platforms, even though they have a Switch and they enjoy a lot of great content on the Switch."

The Switch 2 will be fine in those areas. The only big market where the Switch 2 could have a notable impact on the PS5 is Japan and it's gonna dominate there regardless and the cross-gen period will likely be even longer next time so third party games should be fine for a while after the PS6 comes out.

This would be a very rare occurrence but even then maybe they  don't wanna to do the work to scale it down. In my opinion not releasing switch 2 in late 2023 is a huge mistake. cause everyone that wanted the new big thirdparty games already moved to a new eco system, if you only owned a switch for the past several years you missed on  most of the big third party games.  

Note:

The context of the article was about the Sims.

Even the Wii got Sims games in its generation, and the gap between the Wii and PS360 was comparatively larger, in both middleware support and raw performance (example: programmable shader support via the TEV on the Wii was quite different from what one did on the PS360.)

EA doesn't release games on Nintendo platforms largely because of EA's micro-transaction business model making them fall out with Nintendo. 

EA is an outlier but the reason cyberpunk, resident evil 4,  SF6, tekken 8,  final fantasy games, COD and many other big third party games is hardware limitations.

Doubt Nintendo cares about getting any of Sony's market. They'll focus on what they have and try to expand via blue ocean and non traditional players while also building their relationships with 3rd parties. 

Cyberpunk, SF6, and RE4 remake are practically 9th gen titles that were barely playable on the PS4/XBO, and the last two didn't even release on XBO. 

Tekken 8 is a 9th generation exclusive. Call of Duty titles were ported to the Wii at a time when they were actually relatively demanding titles. Nowadays they're practically esports titles. Final Fantasy games fluctuate in terms of exclusivity, and the Luminous Engine was never ported to the Switch because it was a mess of an engine even on the platforms it targeted. 

Anyway, it still stands, if a game can be easily scaled to the Series S it would be trivial to get it to run on Switch 2 -level hardware. We see this with the Rog Ally playing games at Series S level graphics settings at about 50-70% the internal resolution and similar performance levels. 

I suspect Nintendo will still have third party issues with certain publishers. Especially as we see the industry move to consolidation of third parties into first parties, as we are. 

!Warning - the below is meant ironically (read the P.S. section at the end)!

Dear PC connoisseurs in this thread (incl. handheld/hybrid-PC connoisseurs) why do you even care and comment about the Switch 2? You aren't really interested in it anyway, no matter the specs. You like high resolutions, high frame rates and ray tracing, the Switch 2 (and to be frank, even PS5 and Xbox Series S/X) isn't for you. You like to spend a lot of time in the settings menu for each game to optimise all the parameters in order to get the best out of each game - that's great but that's exactly what the majority of console gamers don't want to mess with. They prefer to use their limited free time to actually play the games. For them, a good game is good, no matter the settings and a bad game remains bad even at the best optimised settings.

You must be very happy because from now on it seems you will get any former PlayStation and Xbox exclusive franchises on your PC. You can save a lot of money because you don't need to buy PlayStations and Xboxes anymore. The remaining ones are the Nintendo consoles (if you care for their exclusives). Maybe you truly like some of the Nintendo franchises but I guess you prefer to not buy Nintendo hardware and software anyways as you can have them on your PC as well, via emulator an you can enjoy those precious Nintendo games in high resolution, high frame frates and even with ray tracing. You really don't have to worry for the Switch 2 or any other console - you're fine, just be happy!

P.S.: I'm sorry if the above comes over a bit harsh but it really isn't intended to trash PC gamers. PC gaming is great and to have powerful hardware where you can play the definitive versions of games has value. Tinkering and playing with the settings can be lot of fun too! The above should be read as an irony in context to the recent discussion on this thread.

Shoutout to sc94957 for covering pretty much every base I felt like I wanted to say, and doing so very eloquently.

Switch 2 may not be bleeding edge for 2025, but mass market systems tend not to be anyway. It will be a massive leap over the current Switch, and that's how it will be viewed by most, only a relatively small minority of enthusiasts are going to care that it's not the latest and greatest tech.

As for third party support, I wouldn't worry. If they managed to get stuff like Witcher 3 and Hogwarts Legacy running on the current Switch and the 7th gen COD games running on Wii, they'll find a way to get plenty of 9th gen titles running on Switch 2.

GTA VI port in 2026 alongside PC version, mark my words.

1080p with DLSS Quality (720p) at 30 fps docked, DLSS Performance (540p) in handheld mode