An NSP file is a game package used by the Nintendo Switch console and Switch emulators, such as Yuzu or Ryujinx. It stores multiple files, which may include the game ROM, .JPG game icon, game updates, and game metadata. NSP files are typically used for storing backup dumps of Switch games and are similar to .XCI files.
NSP files can be played on a Nintendo Switch using SX OS, which can be booted on to a Switch console using the Xecuter SX Pro tool. The SX OS is custom firmware that allows you to play Nintendo Switch Homebrew and NSP files.