Its fine. Their relationship is good. They developed the NVN and NVN2 APIs together. Nintendo is the type of company that will cut ties immediately if their partners are not good. That fact they got the contract again for Switch 2 is impressive, Nvidia must have pitched hard.
I don't think it's that surprising or impressive at all.
It's sunk cost.
After so long with one rather similar hardware ecosystem before Switch, and having attracted so many new software partners with Switch they would need any alternative pitch to be insanely good to make it worth it at this point.
If Switch had tanked it's likely that they would have been more pliable to other offers.
What does surprise me is it sounds like Nintendo basically rushed Switch development.
I know that WiiU sales were less than exciting for them, but not even giving vendors time to produce a custom chip design for them seems to be a bit extreme.
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