Well, Nintendo's free to expand or contract to whatever size is necessary to continue to remain profitable to whatever sales they do, so yes, Nintendo can survive. Will they survive, I dunno, depends on management.
One thing is certain, the switch will not reach Wii+DS numbers.
I think it's unlikely it surpasses Wii U+3DS numbers.
Now, I'm not saying that's a failure, considering both platforms are on a downward trajectory merely stemming the losses is a good thing. I do think consolidating their hardware is a good idea.
Just, while it's technically true Nintendo can survive no matter what their sales are I think there's a point where they'd rather not continue as a hardware manufacturer. Games will only get more and more expensive. At some point if they don't start having a good looking future I wonder at what point do they decide to swallow their pride and exit hardware to save their studios or would they downsize their studios and further harm their output?
But really, I know too little about the Switch to say it'll reverse it's fortunes. I don't think it will though. I don't think the handheld market has room for real growth anymore and though it's Nintendo's strongest market I think it's in a decline they can't reverse themselves. I think there's more room on the console side to pick up users but, Wii, aside they've done terribly there.
If they stop the bleeding and manage to hold the base they had and bring them into this generation then I think they have a good base to work from next generation where I think the Switch's work would really pay off. If they're forward thinking and stick with this as a platform and concept, fix their online and generally not be a backwater embarrassment in regard to usability I think they can start to tackle some of the negativity around their brand. If they work on their tools and keep it relatively simple, in relation to it's competition, to make a game they make get more indie support. And if Nintendo can go to Western developers and claim a console username in the West around the size of the 3DS they may legit get more midsized Western games, but I'd consider it a huge win if Nintendo somehow managed to get them onboard this year after the Wii U.
But honestly, Nintendo can survive always being third, the question's really how long until they make too costly a decision to move up that forces them out. And even if they don't there's definitely a point where software sales would be too low to sustain their size and they'd have to cut back. So they're going to try and grow.