That's definitely the path they need to take.
I don't think it will ever make them relevant in the console space as mobile tech is just never going to keep up graphically with large GPUs and CPUs in consoles, much less PC.
But as I and other's note, they don't really need that space. The portable and mobile sector is huge business. Tons of profits from cheap games that are addictive and get people spending way more than $60 per title etc.
It's just likely that more of us that grew up with Nintendo but only enjoy console/pc style gaming are going to have to accept that it's time to move on. Switch is their last chance for me. I'm hoping having all their games in one place (once 3DS support is killed off anyway) will make it worth it for me despite not liking the hardware. If I end up disenchanted with it again (which would be 3 straight Nintendo generations for me) then I'll be permanently done with them.
Hmmm...
TBH, I have (or had) the opposite problem.
I grew up with SNES, PS, PS2 with a GameBoy on the side that I pretty much only played Link's Awakening, Kirby, and Pokemon on. My brother then went multi-console partway through PS2 and I reconnected with home console Nintendo that way as well as getting into the western RPG support XBox was getting and enjoying my Sony platformers, JRPGs, MGS, TimeSplitters, etc. on the PS2.
Then I got an XBox 360 as a gift near launch or whenever Oblivion came out. I enjoyed Oblivion a lot, even if Morrowind had captured my imagination much more, but overall the device was disappointing to me coming off the XBox. A lot of that is on BioWare failing to catch me with Mass Effect like they had with KotOR or Jade Empire. Come 2011 and I decided to be done with XBox, get a better PC, and just play whatever few big console/PC western games I wanted alongside my strategy games.
I got a PS3 for Metal Gear Solid 4. It ended up being mostly a PS2/PSX box (I went out of my way to make sure I got the OG model). Resident Evil 5 disappointed and I skipped 6. I didn't even bother buying FFXIII. DQ ended up on my DS instead. Platformers dried up in favor of shooters. The device was basically a second 360 as I saw it.
I was in college from 2009-2013 and for a lot of that I just played DS, SimCity 3000, and Civilization IV. I missed PS3 growing into its own, so there's that to consider. I probably would have liked Demons' Souls given that I have been enjoying Dark Souls and Bloodborne as I come late too them. I did borrow TLoU a couple years late and it didn't really appeal to me.
The point is, AAA, "mainstream" western core gaming has left me behind. I only recently bought a PS4 for TLG, a PS2 throwback in terms of the sort of software Sony puts out, and the curious slew of Japanese games coming out for it at the moment. I am enjoying it quite a bit at the moment and I hope that continues. If not I should at least have 10 or so solid games capped off with Persona 5, so it was a good investment. But I'm not playing much in terms of AAA content.
...
In this same decade, the Wii and the Wii U happened, both console I have enjoyed, particularly the Wii, as the Wii U has so far been completely lacking in new Metroid and new Zelda, Galaxy 1+2 caught me more than 3D World, etc.
I have felt that Nintendo was shrinking, been irked by the narrowing of their focus (which I feel has started to widen again going into Switch. Late Wii U was a positive time for Nintendo, imo) to core properties like 2D Mario, Kart, and Smash, leaving other properties ignored (METROID) or giving them new coats of paint that put me off (FE and Paper Mario). I mean even 3D Mario became beholden to 2D Mario and Miyamoto spoke as if 3D was a mistake and he had failed with 64 to make it approachable (I like Galaxy, Galaxy 2 or 3D World. On the eve of Odyssey, I'm wondering how much I'll miss them. More the narrative Nintendo gave and direction that troubled me.)
So the picture is being pushed into Nintendo because they were doing the most right by me, and not an insignificant amount, while the modern AAA console pushed me away.
...
I missed a lot of DS/3DS third party software, but I've been on a quest to find more games that appeal to me and the kind of games I like and, unsurprisingly, DS/3DS have quite a few that I've been working on for 1-2 years now. PS2, too. But nothing has really pulled me back into PS3 or 360. Instead my backlog and wishlist is mostly SNES-PS2 and then DS/3DS.
A lot of it is just following the games. I do prefer playing at the TV to having a handheld close to my face, and handheld was secondary gaming for most of my life. I am growing more attached to the form factor, moving around gaming, closing it for convenient sleep mode, etc.
I guess the thing is, a) I'm not so pushed away from the hardware, b) I'm mostly a software person, and c) I can't overstate b): I can easily move back to retro consoles, I'm bad at recognizing anything put terribly unsteady frame rates, I like good graphics, but they don't factor much into my purchasing habits, etc.
Switch is intensely exciting for me because of its software potential, both Nintendo and, hopefully, Japanese third parties.