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Pretty sure Nintendo is getting their carts at a fixed cost.

If I'm selling pizzas and the pizza is $10 and you're saying I'll give you $5 for it, I'll say fuck you.

But if you say I want 25 million pizzas for the next 12 months alone .... well ok. Sit down. Lets see what we can come to.

Likely Nintendo is getting the cards for in the range of $1-$2 a pop.

That is nothing like the N64 days where the cartridge itself cost sometimes $20-$30 on its own. If N64 cartridges cost $1 to mass produce and stored 170MB (1/3 a CD-ROM) as the starting point with increasing sizes as time went on ... I think the N64 actually could've won that generation with that setup because most third party games would've been portable and many developers would've jumped on board.