People are purchasing the Switch as an addition, not a replacement.
The Switch’s success on the market has not come at the cost of any other platform’s success. The PS4, for instance, has continued to do well, even as the Switch has set several records. This indicates that people are buying Switch alongside other consoles, rather than instead of other consoles.
This is a hypothesis supported by the NPD Group. According to analyst Mat Piscatella, cross console ownership among Nintendo Switch owners is extremely high. Posting on Twitter, he revealed that in the United States, more than half of all Switch owners also own a PS4, while more than 40% of all Switch owners also own an Xbox One.
Given that the Switch’s lineup is extremely different from the lineup of the PS4/Xbox One, and that the Switch’s form factor makes it complementary to the other two consoles (thanks to its portability influenced use cases), it is now clear that the Switch is being viewed as an addition, rather than a replacement. For Nintendo, this is in the end good news, because it maximizes their addressable market—you won’t purchase a Switch or an Xbox One/PS4, you’ll purchase a Switch and an Xbox One/PS4.
Cross-ownership of Switch and PS4/Xbox One in the US remains high. According to PlayerPulse from @EEDAR over 50% of US Switch owners also own a PS4, and over 40% of US Switch owners also own an Xbox One.
— Mat Piscatella (@MatPiscatella) January 31, 2019