The Nintendo Switch has been an incredible success for Nintendo and it will keep growing in the years to come when the system titles like Animal Crossing: New Horizons, Metroid Prime 4, and Pokémon Sword & Shield are finally released.
The biggest threat to Nintendo's position in the market in the future is cloud gaming services, which will allow high-end PC games to run on almost any device. If services like Google Stadia and xCloud work in the wild as they have been advertised (and that's a pretty big if), then the Nintendo Switch's status as a portable system will be threatened.
The Phone/Tablet Market Dwarfs The Video Game Console Market
In order to play Nintendo Switch games, the customer needs to purchase a system that costs around three hundred dollars. What makes services like Google Stadia such a threat is that they work on devices that the consumer likely already owns.
The fact that cloud gaming services work on smartphones means that the potential audience is so much bigger, as it's estimated that they are owned by over five billion people around the world. Not all of those people will have access to cloud gaming at first, but the big markets like the US will, which will act as the testing ground for these services in other regions in the future.
You would be hard-pressed to find anyone who doesn't own at least a PC, smartphone, or tablet that they use in their everyday lives, which means that they already have everything they need without needing to purchase additional hardware. The fact that Google Stadia works with most modern controllers means that even that isn't much of a paywall.
Streaming Services Can Bring Console Games On The Go
It's still amazing to many fans that the Nintendo Switch can run games as beautiful as The Legend of Zelda: Breath of the Wild in handheld mode, as it's such a huge leap from what the Nintendo 3DS was capable of.
If cloud gaming services work as promised, then pretty much any major release will run at its highest possible performance settings on devices that normally couldn't handle them. The Nintendo Switch's limited hardware has meant that some games have slowdown issues compared to versions on other consoles (like Dragon Quest Builders 2), but services like Google Stadia are promising to run games like Watch Dogs: Legion on old smartphones.
The one aspect in which the Nintendo Switch has the advantage is in regards to the Internet, as cloud gaming services cannot run if they aren't online. The Nintendo Switch is truly portable in this regard, as it can easily be played on a train or plane without issues. The fact that so many places have free Internet access and that almost every mobile Internet provider offers unlimited data plans means that this might not be an issue for everyone, as it would depend on how often they are in places without Internet access.
What Can Nintendo Do To Stay Relevant?
Nintendo has earned a reputation for moving slowly with the times and it's hard to see the company embracing cloud streaming until it's too late. The Nintendo Switch has dabbled with streaming games in Japan with titles like Resident Evil 7, but that experiment seems to have ended.
It's hard to imagine Nintendo ever abandoning consoles, especially as the company still has one of the best first-party line-ups in the industry. It's possible that the company will just keep on truckin' and will keep making consoles for as long as people still buy them. It doesn't seem as if Microsoft or Sony are abandoning the console market just yet and Nintendo would probably be the last company to move away from manufacturing hardware and going solely into software development.
It's entirely possible that the video game market will slowly abandon physical media for streaming services in the same way that has happened for movies, music, and TV shows. The day may come when Nintendo releases its last ever system, but it's hard to imagine the company abandoning the market in which they hold so much sway unless they have no other choice. Nintendo will likely just keep releasing more powerful hardware for as long as people are willing to buy it.