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Originally, the pricedrops were initiated by either the publisher or a retailer to empty storage and make space for newer titles. But even back then, Nintendos own IP had a tendency to just keep selling, thus Nintendo always ran out of games even without discounting them.

Then during the mid 2000s, Steam started taking over digital distribution on PC, and with it their steam sales. Digital goods in theory don't need to be dropped in price to sell the games out because they are not taking storage space and can't run out of stock either, so these sales were more of an artifact from physical distribution and as a marketing ploy to attract more customers to their platform.

Games these days wouldn't need the tricks of the 80's and 90's to sell their stock, but it had been ingrained into so many gamers mind that this artifact prevailed and is now an industrial standard even though we don't need them anymore. But Nintendo never needed these sales to sell, and thus are not dropping their prices. And they really don't need to, either; even if first week sales are not impressive, you can be damn sure that one year later, the accumulated sales will sound alot better by then. Some Prime examples this gen would be HZD vs BotW, where the Sony title was initially better selling, butover the course of the weeks got overtaken by Zelda, and even pricecuts and CE Rereleases weren't enough to catch that train again. A arguably even better example could be Dragon Quest XI vs Splatoon 2 in Japan, with Dragon Quest selling massively more early on, but Splatoon 2 instead kept on selling and is now threatening to overtake the combined sales of PS4 and 3DS DQ XI.

I understand that from a consumer standpoint, it sucks, I'd be the first to admit that. But with that kind of data and from an economic standpoint, can you really fault Nintendo for not discounting their games?

This has also a funny side effect for me. Generally, I wait a couple years before I buy a game until they are dirt cheap. But knowing this doesn't happen with Nintendo on the other hand, I buy them close to release. So in short, their high prices ensure that they are the most modern games I own (outside of Kickstarter). Funny how things work out sometimes.