Donkey Kong Bananza is perhaps the worst game you could bring it. According to Nintendo's reports, it's sold-in 3.5 million as of 9/30, but as of early November, it had only sold through 2.6 million. So for months they've had nearly a million copies of this game just rot on store shelves. In the age of digital downloads (which is like 50% on Nintendo platforms), having that big of a game between sell through and sell in is really fucking terrible. And its still quite a bit less than DKC returns anyway. There is a reason the game got paid DLC and then a demo AFTER it came out.
Also the PS5 wasn't discounted that much. It would have made it's price comparable to the Switch 2. You also have to keep in mind Sony's been raising the price of this thing for a while. Losing to a 5 year old console the minute the price is comparable isn't a good thing.
EDIT: On Europe, keep in mind the Switch 1's 2nd best selling region is Europe. Doing poorly there means the Switch 2 will sell a lot less than the Switch 1.