Microsoft (and Sony) have done a terrible job of understanding the console market.

They sell consoles so they can loss-leader you into making it up on licensed games.

You buy a console so you can get a canned consistent experience for less than a PC. In the past, it was also for bespoke hardware that could do something a random PC couldn't easily and exclusive titles.

In 2026, these advantages are gone. Since Xbone/PS4, you're just looking at a standard AMD desktop in a funny box. It comes in too many flavours with real performance differences. Only a few titles are still exclusive. You can spend $500 and still not have the Best Console Experience, so why not spend $700 for a PC?

Of course Xbox and PS are flailing in that market.

Nintendo hardware avoids those pitfalls. There's no "Switch 2 Pro" scenario where some games are meaningfully jankier. The hardware is profitable, and it's still comfortably less than a basic dGPU computer. So there's still a niche for it below the full gaming PC buyer.

They've also been more willing to exploit "we control the hardware and software together" opportunities for only-here experiences. Since the Kinect died, has there been a major gameplay paradigm that required an Xbox or PS to deliver?

Nintendo could port games to the PC but they won't exploit the detachable controllers or portable aspects of a Switch, so many of the ports would be lesser.