Dataminer and Switch hacker SciresM took a look into the issue, and identified the Switch’s exFAT driver as the culprit. It reportedly has a tendency to get corrupted by Sword and Shield crashing. Though as of now, what exactly causes it is still unclear.
As a result of microSD card corruption, everything saved on it will be gone,. This ranges from downloaded games to screenshots. It’s unfortunate, since the former will have to be redownloaded, while the latter are lost forever unless you’ve made backups. Save files should be unaffected, since they’re saved in the Switch’s system storage. It’s also important to note that these seem to be only affecting eShop versions of Pokemon Sword and Shield. At any rate, the solution to this would be to use a microSD card that are formatted to FAT32 instead. Owning a physical copy may help as well, since the corruption issue seems to be limited to the downloaded versions. Speaking of which, if you’re looking to get a physical copy of Pokemon Sword and Shield, you should probably take advantage of Gamers Hideout’s trade-in deal while it’s still available. (Source: Twitter [1], [2], Reddit via GamesRadar+)