I'm not so sure Switch emulation makes up for a "rounding error"

The truth of the matter is powerful computers are getting cheap and accessible. Emulators can run Switch games better than the Switch itself - I've seen plenty of people who are playing the new Zelda at 60fps while the Switch can barely maintain 30. How many of those people paid for the game? I'd guess very few.

Not to mention Nintendo has had a few cases where their new, major release leaked online a week or 2 before the street release date. So players are now in a situation where you can very easily play games earlier and with better performance thanks to emulators.

There aren't real alternatives to Nintendo games, if you want to play the new Mario or Zelda game, Nintendo is the only one who is offering it. That is to say, these are people who would otherwise be paying customers that aren't giving them any money. I'm sure emulators cost them millions of dollars.