I haven’t followed Soundcloud for a while, but from what I remember it already wasn’t doing too well. To me this isn’t just the nail in the coffin, but potentially also a last breath money grab. Get some data, and sell it before going down.

I agree with it probably just being preemptive legal defence. Even their current used solution, being fully locked out of the Nintendo servers, is probably enough to be seen as “rendering a console partly or fully useless” should it ever need to be litigated in court. Especially with so many games and functions being online, digital or card key only.

But I really doubt the ‘burning an internal e-fuse’ idea. Mostly because they can already achieve enough in online service and software alone that they wouldn’t need such a fragile solution. They would really shoot themselves in the foot if they did. They would have way too little control over it themselves. A sudden swath of consoles bricking on a hot day would give them a bigger headache than the Joycon drift issue ever did. If not in the US, most definitely in the EU.

To me this reads as 'We might push an update that bricks your console should you have hacked your device." Which has been a risk when modding consoles for at least 20 years now. I don’t think it refers to there being an actual kill switch. Just more legalese to further scare people from doing to and to reduce the chance of getting sued should it happen.

That said, with so many games being digital or gamekey only, and later games probably requiring system updates anyway, just being blacklisted from the Nintendo servers alone would already gut a console’s functionality to the point it might as well be seen as one.