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They honestly would probably make more money off a Netflix type model with monthly subscription.

$5-$6/month for ala cart access to a catalog of NES/SNES/N64/GameCube/Wii games is $360 if someone kept that service for the life of their system (approximately 5 years).

Plus in the Switch's case once Nintendo sells you that Super Mario World on Switch for $7 or whatever, they likely have to give that to you now for the next 10+ years as you own it outright. On a subscription model you have to keep paying monthly to have access to the game.