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Barkley said:

They'd never sell the bloody things, WiiU is dead, everyone and their mother would trade in for a switch copy. Hell you'd get people buying the WiiU one used and immediately trading it for the free directors cut version. They'd have WiiU copies of Mario Kart 8 coming out of their nostrils.

Trading WiiU copy for Switch Copy isn't going to happen.

Keep in mind, the cost of the digital game to Nintendo is not the same as the $40 price tag I was suggesting either. Nintendo could easily pay the retailer $XX kick back for giving the consumer a digital code to be used. That is almost no actual cost to the retailer so even if the kickback form Nintendo was $10, that's easily $8 profit per exchange for the retialer. The agreement would likely then be to simply destroy the disc and trash (preventing your scenario).

As for Nintendo, they'll still make profit on this easily. The digital game is far less costs as a physical, these deluxe editions are just DLC content and a fraction of the dev costs. Even if it is a wash or loss, that is just used as marketing to launch a new product.

It is perfectly feasible.