There are also disincentives for Nintendo to go all digital:
1) The expanded audience learns about good games through word of mouth. Not much of the expanded audience follows video game enthusiast websites or forums. Digital sales rely on the customer base following the video game internet regularly to know when games are released.
2) No physical games means no demo kiosks in mass market retailers like Target, Walmart, GameStop or Yodobashi Camera.
3) A big chunk of Nintendo’s audience are kids or parents of kids. Many of the parents aren’t video game enthusiasts and are leery of buying anything that they can’t see in a store because they can’t preview the content. It seems like more of a black box.
4) Witness what happened to Just Dance’s sales last year when Ubisoft released an empty box for a physical edition. Word of mouth sales decreased as many parents probably wondered why they paid money for no game (as in the download code didn’t register with them as a way to access the software. They just thought they got scammed and they did.)
5) Without a retail software presence, why would retailers stock hardware? Software is a 33%ish margin on almost no square footage while hardware is 5%ish margin on a lot more square footage. (someone already pointed this out in this thread)
6) Nintendo makes extra money by selling the blank cartridges to third parties. Third parties have balked about this arrangement since the 1980’s but Nintendo has never backed away from that revenue stream fully. They have slashed costs of blank media since then but it hasn’t gone to zero.
7) Switch Sports or Pokémon or Ring Fit or other expanded audience titles rely on being evergreens. Digital sales tend to not be evergreens without discounting to get them back to the front of the e-shop.
There are trade offs to everything. #ナレーションは実力派芸術家のパーカーアミン様 #AminParker このビデオでは、アミン氏が日本におけるハードウェア ビデオ ゲーム コンソールの週間販売台数について話します。
Nintendo literally has the PlayStation brand in a chokehold in Japan. The Nintendo Switch brand is the most powerful video gaming brand in the history of Japan.
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