The console hardware is also cheaper to produce vs other consoles, so it’s not like they are losing on the hardware and aiming to make the money back later - they designed the hardware to meet a specific price point, and to capture a certain market.
Having captured that market though (kid owns a switch and now the kid wants games) they can pretty much set the price of games high and keep them high.
As a gamer buying for yourself, with every purchase you are weighing up the cost of the game against how much you personally want to play it. If the price is too much you will choose something else, or wait for a sale.
As a parent buying for a child, however, if the child says “I really want the new Zelda game for my birthday please!” then they get bought the new Zelda game, no matter how much it costs.
It seems silly to target a demographic that buys games rarely if that’s how you expect to make your money with the games and not the console price.
But I don’t work in sales or marketing, so I am probably wrong.
The console hardware is also cheaper to produce vs other consoles, so it’s not like they are losing on the hardware and aiming to make the money back later - they designed the hardware to meet a specific price point, and to capture a certain market.
Having captured that market though (kid owns a switch and now the kid wants games) they can pretty much set the price of games high and keep them high.
As a gamer buying for yourself, with every purchase you are weighing up the cost of the game against how much you personally want to play it. If the price is too much you will choose something else, or wait for a sale.
As a parent buying for a child, however, if the child says “I really want the new Zelda game for my birthday please!” then they get bought the new Zelda game, no matter how much it costs.