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Personally, I think it is because people that buy Nintendo products want simple, rather intellectually basic (and therefore cheaper) products. They want the convenience of playing on the go and they don't care about the worse visuals. Nintendo gaming is about having fun, not watching a visually stunning movie. Now, with the Switch, they can still appeal to this group, but at the same time offer a massive leap forward in tech for a handheld. The 3ds --> Switch is most certainly (unless someone can point out another time) the most massive technology leap ever in a gaming device.