NS2 only offers 64GB or Game-Key cartridges

[RolStoppable]

Soundwave said:

That still makes no sense for the publisher. 

Packaging + shipping + retailer cut is still going to be about $15 dollars, then the cartridge itself while far cheaper than the N64 days is still likely at least about $7 or $8 a pop. Digital is simply better for everyone. 

Nintendo basically knows this too, the Game Key Card option is there because they basically expect all/most 3rd parties to just use that option. 

3rd party games being sold on Nintendo platforms digitally = more money for Nintendo at a 30% cut. Of course they will want that too. That's another reason for Nintendo to want better 3rd party relations in general too in the digital age not only do they get their standard licensing fee cut, they take what Wal-Mart/Game Stop/Target/Best Buy etc. would take as their cut too. That's great for Nintendo and easy money. 

Honestly Nintendo should have just ditched physical entirely and gotten this whole process over with, the current setup is a bit silly and stupid for all parties involved. There's not going to be very many Switch 2 games on an actual cartridge, almost all the 3rd party ones will be on a Game Key Card. 

I don't think your maths holds up when Marvelous are shipping their games on game cards.

The game-key card probably exists because Nintendo was aware of how many fake physical games there were on Switch. What a game-key card does is turn a digital game into something with actual ownership, meaning that a game-key card can be sold by consumers if they don't like it, unlike digital games which cannot be resold. Nintendo cannot force publishers to make physical games, but the game-key card at least provides more rights to Nintendo's customers. Or in other words, the absence of game-key cards wouldn't have increased the amount of physical games but the amount of codes in a box.

I am sure that Nintendo knows that aiming for the highest volume of games sold is more profitable than aiming for the highest margin per game sold. That's why Nintendo keeps publishing physical games, because they know that their game sales and thus their profits would decrease significantly by going digital-only. The proportion of physical game sales for games that are available in both physical and digital format still accounted for ~70% late in Switch's lifecycle. Your suggestion that Nintendo should gone digital-only with Switch 2 is plain stupid.