I've received a number of questions asking why this announcement was made. Here's a quick explainer:
China has a unique regulatory landscape when it comes to foreign companies operating within the country. Video games for example require government approval before they can officially launch in the country, and for a Chinese entity to act as the operator of the game.
In 2019, Nintendo partnered with Tencent and formed a JV to bring the Nintendo Switch to China. A China version of the console launched in December 2019, selling over 1m units in its first year.
However, the China ver. is a unique console that is different from the global version.
The China ver. is region unlocked when it comes to cartridge based games, and any game cartridge will work.
The China ver. is region locked when it comes to online services, and only a China Eshop / account is available to use. This means only officially approved games can be downloaded from the China Eshop, of which there are less than 100.
What this means is that a lot of core console gamers prefer to import the console from Japan, Hong Kong or the US, as the global version is fully region unlocked and can access any Eshop store.
The shutdown announcement is specifically referring to the China ver. of the console. Game cartridges and already downloaded games will continue to work ofc, but online services and new game downloads will not.
While an official reason was not given for the closure of online services, the date suggests it's the end date for a contract Nintendo had in place with the service provider under Tencent. The announcement also comes at a time when the Switch is at the end of its lifecycle.
The decision will have a somewhat limited impact on the install base in China, given the limited selection of games via the Eshop + large number of import consoles in use. It's likely Nintendo is currently working with Tencent to negotiate terms for the Switch successor online services.