This isn't how publishers think. Console warriors care about sales relative to other platforms; publishers care about whether it's profitable to port a game to a certain platform. And profitability is about weighing the costs of development against expected sales. The Witcher 3 sold substantially more on PS4 and PC than Switch over its lifetime, but the Switch port was still profitable enough for CDPR to want to port Cyberpunk to the Switch 2 at launch.
Also, if I remember correctly, Hogwarts Legacy did very well on the Switch, and wasn't lagging dramatically behind versions of the game on other platforms.
During their last investor briefing, Nintendo reported 1.39 billion units of software sold, and that includes third parties. There aren't "billions of first party sales."
So, yes, 500 million is a lot.