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Simple behavioral psychology. The super-fast discounts from other companies have conditioned much of their consumer base to simply wait a fairly short amount of time and they'll get the same game, often a significantly better game thanks to DLC being tossed in on top, for 1/3 of the price. This is doubly bad because it both rewards waiting and punishes instant gratification.

The reason they do this is because these games are often super-expensive to make and the developers need to ring out every dime they can get from them as fast as they possibly can. This is especially true of AAA single player titles. Add in that the competition is also aggressively discounting their games and it's all bad.

Nintendo is on another level. They have their own consoles where they invariably dominate the sales figures. They also have ridiculous cash reserves. Nintendo doesn't need to make all of their money immediately to fund the next Mario game. So they can take the long view. They condition their consumers to not expect a price cut. At least not for a significant amount of time.

In this way, Nintendo actually makes MORE up front as fewer consumers hang on to their money in hopes for a better deal later. The games also continue to be purchased at the higher prices for much longer. I mean, Mario Kart is four years old and still selling over 200,000 units every month. Any other company would have long since dropped the price to $20 in order to goose holiday sales figures and would get about $4 million in gross sales. Not bad. But because Nintendo is holding to the $60 price point, they're reaping $12 million in gross sales. Again, that's every single month!

Not only that, but it's actually psychologically good for the consumer. Worrying about price cuts makes a person hesitant to purchase a game. If a game drops in price a month after you purchase it, that's a loss to the customer. Now, on the other hand, waiting and getting something for cheaper is a win. The problem is that wins and losses are not equal in human psychology. There's a human tendency towards loss aversion. People feel more strongly about losing a dollar than winning a dollar. Nintendo fans are rarely economic losers. The only game on the Switch I recall feeling bad about purchasing early is Mario + Rabbids. Of all the other games in my collection, thanks to the Amazon discount (sadly discontinued), the most I've seen games I purchased Day 1 undersold for was $3. And I'll gladly pay an extra $3 to be able to play the game a year earlier.

So, basically, Nintendo has leveraged their isolation from the rest of the gaming community into being able to play the long game more effectively than anyone else. Funnily enough, third parties have also benefited. Anyone else notice that third party Switch software drops in price slowly as well?