What people also rarely look at is where the Switch sells well.
At this point in time roughly 30% of all Switches sold are in Japan. How "well" do Western Games in Japan? You'd be looking at a term that's worse than just poor. If 30% of your potential install base is a market you can't sell games to, why take the risk?
Good Switch sales in Japan have to be looked carefully at. Japanese developers now developing for switch isn't necessarily good for the western switch owners. Look at how many exclusive 3DS games there are in Japan. It's the same story as above. Western games don't sell in Japan, most japanese games don't sell well in the west.
Further, this also applies to Nintendo first party games: Compare Zelda and Splatoon sells between Japan and West. Splatoon sold 50% of it's WW sells in Japan, while Zelda only did 15%. You are splitting your resources between two vastly different markets.
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