Yeah, up until 8GB it's really cheap, but then it starts curbing upwards. 16GB should be pretty cheap too nowadays, with 32GB however starting to become expensive. 64GB, while technically very possible, would eat to much of the profits to make then viable right now.
On that note, Optical dics are also getting more and more expensive since they are getting less and less mass produced. With movies increasingly coming in digital form through the internet, the demand for Blu-Rays has been dropping for years, making the production more expensive in turn. In other words, for smaller capacities, Switch cartridges should slowly actually become cheaper than Blu-Ray Discs in the smaller categories (4 and 8GB).
Even if optical discs are getting more expensive to produce, they're still significantly cheaper than a Switch cart. The optical discs are also being used by multiple devices including movies, they aren't dependent on a single console.
I don't see a scenario where carts are cheaper to produce than discs, unless we move away from optical discs entirely. While carts that only hold 4-8GB are useless for most modern games. I anticipate next gen will use both Bluray and Ultra HD Bluray discs, Xbox consoles already use UHD drives so its cheap at this point.
I feel like the compromise developers should make is Switch carts that have no game data on them, but give you access to a game. That way you technically own a game by having the cart and can sell it, trade it, etc. In my mind that's much better than a box with a download code.
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