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Part of it has to be competition.
Nintendo Switch has sold ~400m games.
PS4 has sold like ~1500m games (I think?).

Even if you account for the fact that the Switch is only been on the market, half as long (and double Switch game sales to compensate) you notice its still like half of the playstation 4's.

Basically they sell alot more games, thus theres more competition for the 1st party games.
Also 3rd party are more aggressive with price cuts too there, so Sony 1st party follow suit.

Meanwhile, alot of Switch owners, also own PS4/Xbox's and usually arnt as intrested in 3rd party games on that system (if they already own the games on other systems, or plan to play them there). So the main draw of the Nintendo system is its exclusives by far (more than the other platforms).

Nintendo knows this, and thus keeps prices high on their games to profit more.


Also it could be a differnce in mind set.
Some companies are fine, makeing small profits on each unit sale, but selling more, to accomplish the same.
(while others, are willing to keep prices high, even if they know it potentially means less sales, but since the price is higher, the profits are fine)

Playstation 4 software sales exceeded 400 million units in January 2017. That's a bit more than 3 years after launch. Almost the same amount of time it took the Switch to do so. Obviously, yearly software sales will increase over the course of a console's lifespan as the install base grows.