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I feel like this has to do with Switch's built in 32 GB, a good portion of which is taken over by the OS. A news story I found put it at just below 26 GB for the user, but it could be worse on the current firmware.
If the game likely won't come in under 26 GB, then I guess there's a fear it will have a limited audience. I doubt it would have much of an effect, but yeah, I've seen my roommate play some ESO and somehow it seems less interesting than Skyrim, which I'm not interested in.