I thought Reggie said that VR was not fun.

Of course sales aren't everything (not being sarcastic) I could love a game that sells less than a million copies. My problem with Nintendo doubling down on the Labo is that it was a mediocre product from the start. Sony, Microsoft, any of the three could have made this product, and I would still see it as a waste of funds. Cardboard wears down too fast (especiallyfor the audience they're targeting it to), and the games they included in it all look like something you would get for Free on the Android Playstore.

I mean I agree somewhat, but as a counterpoint, you can't quite do the level of what they're doing with mobile games because Labo goes a bit further with its cardboard than those apps can go with Google Cardboard, and as another counterpoint, these games are kind of just novelty toys that kids won't play with over and over again forever or anything so if they wear out, who cares? It's cardboard, it's not meant to last, it's meant to be fun for a little while for the kids and to get them thinking. Then when they're bored of them and the cardboard is unusable from wear and tear, the next kit comes out and the process begins again. For the really dedicated engineering type kids, they wouldn't stop at the kits, they'd actually make their own custom cardboard Toycons, as we're seeing some people do. I always understood that to be the appeal. Not for me, but damn if I were a kid or had one, I'd probably want to try it. The biggest problem is the price. The kits should be $60 cardboard included, if that.

This confuses me greatly

I'm really having a hard time trying to understand your logic here.

But hey! To be fair, he did say: "in order for this technology to move forward, you need to make it fun"  so maybe this is just what VR needed: a nice bit of cardboard around it to make it fun.

I don't see this doing well at all

They don't see that confident in it. Not even a video of it to even show us what its like and its out in a month

imagine being an adult and getting annoyed over something that isn't even primarily made for you 

like all the "b-but the switch hardware is too weak this will look awful this is terrible news!11!" or "this is gonna ruin VR" posts i'm seeing on some places

Yes, i'm sure Nintendo wants you to expect the absolute best VR experience ever from something that costs $80 and is made out of cardboard. Totally.

guess some of these people are actually the right age demographic after all

They arent doubling down on Labo though, go back and watch the original Labo trailer from January 2018, it showed most of these kits so they are just releasing the kits that were already designed.

Probably because they arent, these are just the remaining kits that were already designed. They were briefly shown in the reveal trailer from over a year ago.