This is no way, shape or form a myth. Nintendo games rarely go on sale, when they go it's often in special occasions with very light discounts of maybe 20 USD for selected titles

Other publishers put their games on sale periodically. Not only that, it’s common for their prices to permanently decrease 

If you can't see that I can only guess you only buy Nintendo games 

Add Koei Tecmo to that list. While they're not as bad as Nintendo when it comes to doing select games on sale, they're still stingy about how much they put their games on sale.

Makes sense they are equal to Nintendo because I never bought a single Koei Tecmo game in my life

The PS1 does come out on top with 9.43 games per system compared to 6.83 for the N64. But the problem wasn't necessarily the price in absolute terms, but the gap between the prices. PS1 games were typically $40-50 (at least once Sony switched from the long boxes to the standard CD jewel cases; most long box games were $60), compared to $60-70 for N64 games, an average of about 50% more expensive than PS1 games. Of course, the tie ratio difference might not have been about pricing, at least not entirely. There was supposedly a huge gap between the SNES and Genesis, with the latter supposedly having a tie ratio over double that of the SNES, this despite both systems having the same software prices ($50-70/game). And this is despite a dollar being worth at least twice what it's worth now.

Today, there really isn't a huge gap in pricing. Most new retail-release games are still sitting in the $60-70 price range on all three systems, with a handful of Switch 2 games at $80. As others pointed out, most people don't buy a ton of games a year. Even over the course of a system's life, the average owner will only purchase 8 to 12 games. While even the increase to $70 for many games back in 2020 when the PS5 & XBS were released was met with wailing and gnashing of teeth by many hardcore gamers, a $10 price hike, the first in fifteen years, is only really a problem if you're the type of person that buys way more games than the average console owner, which would add up. Like, if you buy a hundred games for a system over its lifespan and spend $10 more per game, that would be $1000 more spent. That is indeed a lot of money. But again, most people don't buy nearly that many games for a console. $10 more per game would amount to at most $20 to $30 more per year or $80 to $120 over the entire life of the console for the average console owner, which isn't much. And again, there's inflation to take into account.

35 years ago people paid $200 for a Super Nintendo at launch (and it was down to $100 a year later), and the average owner probably paid around $480 on software, assuming every game bought new at an average of $60 and an average of eight games per owner. Now they'd pay $450 for a Switch 2 at launch, while paying maybe $560 for eight games over the course of the system's life. So, while nominal prices for software have remained relatively flat for decades, hardware prices have grown. Once you take inflation into account, software prices have technically trended downward while hardware prices have more or less kept up with inflation (the SNES's launch price was over $470 adjusted), and price cuts have become less frequent and smaller in terms of percentages. Either way you measure it, that up-front cost of purchasing the hardware itself has been an ever-growing share of the total cost the average console owner will expect to bear.

I find this extremely strange. SNES's game library is twice the size and is generally hailed as the superior one. Why were some developers/publishers obsessed about making SNES exclusives when Sega's policies were more 3rd party friendly and their console supposedly sold a lot more software? I just don't get it. Did everyone just assume SNES was going to absolutely domimate based on NES's performance? A lot of moneyhatting is probably involved that Sega couldn't hope to match, but still, nothing like this happened since.

Apparently the tie ratio of 16 games per system comes straight from Sega PR, which if true would mean that's probably accurate (lying about sales data is illegal, after all). As for how it attained that, I have no idea. I've heard some people speculate that because it was widely considered the definitive system of its day when it came to sports games, that it accumulated much of its software sales advantage via sales of sports games, and that was the generation where we really started to see annualized series like Madden take off.

Another possible explanation I've seen others offer was that because it was considered by many the more "grown-up" console that it was older teens & young adult (a "hardcore gamer" age demographic) with disposable income buying more games than SNES owners. Said demographic probably also appreciated that Sega games didn't shy away from bloody violence, as opposed to Nintendo which didn't allow such games to be unedited until like 1994, near the very end of the generation. The Genesis version of the original Mortal Kombat may have had worse graphics & sound, but it did keep the Fatalities intact. I think Mortal Kombat II was the first SNES game I had that kept all the blood & guts.

Anyway, I think both the "It was sports games" and "It was young adult hardcore gamers" explanations are plausible. The Genesis, much like the Xbox brand years later, owed most of its success to the North American market, and American cultural attitudes and Sega's marketing helped the Genesis serve as real competition against Nintendo. There is some supporting evidence, namely that North America really dragged down the SNES's overall software tie ratio. In Japan, where the SNES was dominant and cultural attitudes are different, said ratio was 11.35 games/system, while in the "Americas" region it was only 5.78, meaning the average SNES owner in North America bought only half as many games as their Japanese counterparts. Even though the SNES hardware sold 36% more units in NA than in Japan, software sales were over 30% less than in Japan. The software tie ratio was pretty bad in the "Others" market, which includes Europe, but Europe was only a small portion of the global console market back then.

Unfortunately, we'll never know for sure since as far as I know there was never any real market research done on the matter back then. But we are at least able to make educated guesses.

Speaking of market research, since I brought it up earlier I wonder if there's been any regarding the spending habits of hardcore gamers with their own income buying games for themselves versus parents buying games for their kids. From what I've read, the average gamer was younger 35 years ago than today, so that meant a larger share of game buyers had to have been parents or other family buying games for their kids, which had to have had some sort of effect.

Anecdotally, I know I was still a kid during the NES & 16-bit years, so if I wanted any games for any console I had to wait to get maybe one one my birthday and one or two for Christmas. Those games were a lot more expensive in inflation-adjusted terms than today's games; even the cheapest NES games during that system's heyday cost the equivalent of $90-100 in today's money, and even by 1993, two years into the SNES's lifespan, even budget-priced NES games cost the equivalent of $67 in today's money. A good chunk of the games I had for those older systems were hand-me-downs from friends of the family (who had kids my age) rather than something bought new, maybe one or two were bought by relatives other than parents (I got Blaster Master from my aunt), and at least a few I bought used from Babbage's/GameStop after getting my first job back in 1998. Getting a job allowed me to acquire a lot more games each year than what my parents would buy me. In fact, after I got my SNES in either 1994 or 1995 (it was after the bundle that had the Super Mario All-Stars + Super Mario World combo cart came out), my mom told me that if I wanted any more games I needed to get a job.