Perhaps the most intense point of fan speculation in the Nintendo community is the idea of a Nintendo Switch Pro, which has been rumored to no end for several years at this point. Every week seemingly brings a fresh report of an upgraded Switch with new specifications. While this would cut against Nintendo's long-standing design philosophy, where there's smoke there's fire; a more powerful Switch is likely real. A straightforward upgrade to the Switch's hardware is exciting, but what would be more exciting is the concept of Nintendo and Microsoft furthering their relationship and building a Switch hardware revision together.
This is a gigantic hypothetical, but this kind of partnership could grow from what already exists. Clearly, the companies are already on good terms. From Banjo-Kazooie and Minecraft representation in Super Smash Bros. Ultimate to the string of Xbox titles on Switch, the two behemoths are willing to do business.
Of course, there's a marked difference between that and a jointly-developed piece of hardware. Nintendo has been burned once already with the infamous and cancelled Nintendo-PlayStation add-on for the SNES. That was largely a logistical and licensing issue that came down to profits, which would, of course, be another source of tension here.
After all, Nintendo has little reason to split its Switch revenue with Microsoft when the console is smashing sales targets left and right. That speaks to the power imbalance between Nintendo and Microsoft in the current partnerships. A lot of content crosses from Xbox to Nintendo, but it doesn't really go the other way. Xbox gets exposure and added revenue, but no Nintendo content on its platform. Nintendo is in a position of power this generation, whereas the disappointing realities of Xbox One put Microsoft in a position of weakness.
That said, if the right deals could be struck and the companies could work as equals, a Nintendo-Xbox Switch hybrid could be an incredible force. Microsoft and Nintendo's hardware design philosophies are very different. Microsoft pushes the bleeding edge of tech, whereas Nintendo innovates using older components. However, since Nintendo laid the groundwork for the Switch's hardware gimmicks, Microsoft could run with that blueprint and supercharge it. Microsoft's hardware engineers could make the slick, ultra-powerful Switch that fans have always hoped for.
While this is a compelling hardware proposition, it's an unbeatable software proposition. Nintendo's incredible first and second party stable combined with Xbox Game Studios would be unmatched. Having everything from Mario to Halo to Zelda to Sea of Thieves on the device would cover every genre and audience. This would be a legitimate and potent challenge to Sony's array of IP. Neither Nintendo or Microsoft can match Sony's exclusives tit for tat alone. Nintendo's lineup is more diverse than Sony's, but it lacks representation in key genres that PlayStation excels in. With Microsoft's backing, those gaps could be covered.
Not only could this partnership stand up to PlayStation, it could also supplement Nintendo and Microsoft's individual weaknesses. Nintendo's online infrastructure and services are incredibly poor. From Xbox Live to Game Pass, that is Microsoft's strength. By contrast, Microsoft's weakness is its exclusive game library, and that's where Nintendo dominates. Plus, Nintendo's lack of third-party content could easily be solved with Microsoft's connections, its acquisitions and the architecture its hardware team could afford. Plus, on a macro level, Microsoft aligning itself with Nintendo like this would give Xbox a dominant position in the console space again.
Microsoft and Nintendo working together in this fashion would be huge. The magnitude of this sort of deal is matched only by how impossible the notion is. While the companies are content working together in a cursory way, this extreme level of collaboration isn't in the cards. Most likely, both Nintendo and Microsoft would have to be in dire straits before this could even be entertained.
Realistically, more of Microsoft's games and services hitting Switch could happen. But, the notion of Microsoft becoming intrinsically involved in the Switch's trajectory is nothing more than armchair hypothesizing. That said, there are many lessons Nintendo can learn from Microsoft and vice versa, even while remaining in their separate ecosystems.