Nintendo being an exception.  Their games take forever to drop in price.  

Damn... you are right, forgot about that!

I have to say I'm fascinated that charging $70 for new next-gen games like Returnal and Ratchet are clearly affecting sales negatively, yet 4 year old Nintendo titles like BOTW and MK8 continue to chart highly at $60. That $10 difference really makes a big psychological difference to a lot of people it seems.

Don't forget that the difference is bigger in Europe.

$60-70 is fine, afterall you can wait a few months if you are not willing to pay full price

DLC though is heavily overpriced, which opens the way to games being released unfinished on purpose

There are many games out there, so much to do in them, and I only have so much free time. I'm in no hurry. I tend to wait a few years until a game is around £20 or less before I make my purchase.

I think the price increase is too much because of the fact that I live in Canada.

Ratchet and Clank for example now costs $90 and so will a lot of next gen games. Now before, these games costed $80 which was also a lot of money but for me, $90 puts it over the edge to the point where, I will only be buying games either when they go on sale or when I am very hyped about it like FFVIIR.

Overall though, the thing that I like about PC games is we have many stores that give pre-order discounts as well as discounts when the games come out.

As an example, one of the games I am excited about is Tales of Arise which has not released yet. The normal price on PC in Canada is $80:

https://store.steampowered.com/app/740130/Tales_of_Arise/

But on cdkeys which will give you the Steam version of the game, it costs $64.69 CAD ($51.46 USD)

https://www.cdkeys.com/tales-of-arise-pc-steam

Both are legit copies that will work but on PC so I have options and retail stores sometimes do this too for consoles but are more rare. So I will probably go that route as it's one of the main reasons I buy most of my games on PC rather than on consoles. I don't need to wait a month or two for a discount, the discount is already there!

I'm a third world country worker, so for me gaming is really expensive, a luxury

I can go as far as spending 10-15% (sometimes 20-25%) of my wage every month only with games and I, at best, buy 3 games a month (if it's a Nintendo physical game, then it's only one for a month). I can do this because I live with my grandfather and don't have wife or kids, once I start living all by myself I will need to stop gaming for a while (I will need to buy furniture instead of electronics like consoles) or just playing free games (have done that before when I was a teenager), I'm not really tempted to go back to piracy now I'm grown ass man

60 USD is fine I guess. It's expensive for me, but I do understand developers are working with first-world salaries and they need to be paid accordingly

My favorite revenue model is to sell games dirty cheap (15, 20 USD) and then charge me again for premium/complete experiences in form of DLCs and season passes. I know people hate to pay again for capped experiences, and they end being much more expensive than just charging 60 USD, but the point is: I don't need to buy DLC for every game, just for the few ones I truly like. With cheaper prices I can keep gaming a lot, and if I like the game enough I buy additional content

I don't think this is the reason. It's as sure as the sunrise Nintendo will sell their games at 70 USD on Switch 2 and they will sell the same regardless of the price 

One of the reasons I can think of is Switch lacks AAA games, this helps Switch AAA software to keep high prices. Of course Nintendo is the main supply of AAA titles for Switch, but this is lowkey apply to third parties too. Dragon Quest is 10 USD more expensive on Switch compared to PS4. You can be sure Monster Hunter Rise will never go down to the same price as Monster Hunter World either

You don't see Nintendo smaller games selling forever with 60 USD, because on Switch smaller games have a steep competition with third parties and indies, but still, Nintendo genuinely choose to keep their prices 60 USD so they can state firmly "our prices do not go down"

A game like Mario+Rabbits has sold** better than other Mario spin offs (let's say Paper Mario) on Switch, because it's heavy discounted. Discounts drives sales with you are in a more competitive market 

**We don't actually know how much it sold, they only stated it had 7.5 million players (profiles) playing the game, so take this with a grain of salt

Ratchet sold 1.1 million copies on a user base of 10 million in only a month. It did fine at launch price.