Price tag>inflation. Value is relative to the consumer. If these consoles were at inflation costs, comparative to the late 70's, they'd be pushing a thousand dollars. People see a price tag and associate it with the product regardless of the time it released. A game console's sweet spot is $199.99... and always has been. Anything over $249.99 and it becomes harder to sell... which is why Nintendo has only done it twice.

People have paid more, of course. The PS2 was $299.99 and moved quite well and so is the Switch. The PS4 as well. But history shows that once they drop below that $200.00 range, they really fly off shelves. Most of the PS2 sales were at that price point. 

From 1991-1994, Sega dominated. I've talked with SOA head of marketing Al Nilsen and he confirmed that during that period, kids were voting for Sonic over Mario in all their tests. Market research showed that Sonic was more well known than the President of the United States. He was the number one mascot of the 16-bit era in the US by far.

As far as over all sales, it wasn't until late 1994, when Sega had internally shifted all resources to the Saturn and thus, left the gen that Nintendo started really gaining. The over all numbers are hard to come by. I have documents that show it won the US, but there are others who claim that the SNES eventually over took it but to me, that's pointless. 

A race is run and the results only matter as long as they're both in the race. If one leaves the race ahead, on their own accord, to race a different race... does the person who is losing the race win? Technically, sure. But not really. Sega left the 16-bit generation winning.

Yes SNES outsold the Genesis 20 million to 18.5 Million

No, inflation is definitely something that needs to be taken into account. There is a reason why consoles dont release at $200 anymore and thats because you cant get the same out of $200 in the 2010s as you could in the 80s/90s.

Yes, consoles typically have their peak sales a few years after release when the price comes down and the software library is established and word of mouth is high, this even applies to those devices that launched at the "sweet spot".

Is there a reason you ignored the 2nd part of my post? How would Switch have sold far more than it did by being $100 cheaper when they essentially sold as many as they could make in the first year? At best it would have sold just a little bit more which wouldnt have been worth it and would have severly cut into their profits.

If it had released with that price point, they'd have increased production in the anticipation of it's success which would have negated the supply issues. And the extra software would have been a boon for profits as well. More consoles=more software=more profit. 

It would be interesting to see what the profit margin is on a Switch. It they're making them for less than $199.99, then they'd still make money at retail, albeit far less. But still, software is where they make all their money, not hardware. 

I'm guessing it's at $299.99 because... well... it can be. 

While it's not due for one yet as it's doing just fine at $300 USD, I can't deny it will be refreshing as hell to get a price cut on it;  though I understand the reasons why, one of the most annoying things about the Wii U was Nintendo's refusal to ever drop its price, even 4 years in.

A $200 USD Switch with Pokemon and Smash would sell like sunscreen at a nudist retreat in the Sahara.

Its not that simple, Nintendo cant just push an "increase production" button and make an extra 10 million consoles.

Nintendo doesnt personally make the components that go in their consoles and last year there was a worldwide shortage of the flash memory Switch uses so the only way they could get a significantly higher amount of units out would be to pay a significantly higher amount for these components in order to be a higher priority for their suppliers. Since Apple uses the same components for the iPhone which sells like 100+ million on a yearly basis, its highly unlikely they would ever be a higher priority.

Best case scenario, Nintendo ships like 16-17m units of hardware and 60m of software instead of the 15m & 52m in reality which would not be nearly enough to offset the $100 less they are making from each unit sold so it would absolutely eat into their profits.

Seems like a bit of horse pucky here.

Super Mario World alone outsold Sonic 1, 2, and 3 combined in N. America 12.78 million to 8.52 million

Sega Genesis debuted a full 2 years before the SNES in the U.S., so SNES catching up in sales after Saturn debuted seems like a level playing field 

Just as I thought, very close in terms of sales with Genesis losing

When you convert profits from US hardware and European hardware (299 to 199 in both currencies, or -100) and add up all the currencies, you end up losing 145 billion yen on the 15M units forecast for this fiscal year. Turning Nintendo's profit forecast of 116.5 billion yen, to a  loss of 29 billion.

I think that the Switch should have launched at $250 instead of the $300 price tag they ended up going with, but it's given me enough great games in its first year, so I think that it's okay for right now.