Originally Posted by Jameerthefear
BDs don't cost $2. They probably cost 2 cents. A cartridge is probably substantially more. That's a LOT of profit lost. I don't know why this is so hard for you to see.
Originally Posted by nightlight
The difference in cost to produce cartridge vs disc is not marginal. The reason games cost the $60 they do today is because of carts. Development is more expensive than it ever has been. Cartridges offer no tangible benefit to the developer while increasing the costs of production. Games are evolving constantly in this era through patches and dlc.
If you don't remember, it wasn't uncommon to see N64 games retailing for $70 and above.
According to that, platform folks profit between $7 and $14 per game, depending on success of sales after all of the costs are taken into account. $7 is royalty and the other $7 depends on how much unsold inventory there is remaining. If they hit a home-run in game titles, then we can go to the upper-end of those profits. Obviously if it's a flop, then it's game over.
Keep in mind this doesn't even include money these companies make from DLCs, which are often gimmicks but people buy them. Sometimes, the producers intentionally leave parts of the games out and package them as DLCs.
Nintendo wants to invest on an idea they believe is original in this day and age with cartridges. If we go by Nintendo's track record and their fanbase, then they have been very successful so far. Even if we include Gamecube and Wii U in there, they have been successful.
Now, lets say they are as successful with the NX/Switch as they were with Wii and profit $11 a game. Can they afford to spend $3 of it on the cartridges? Yes. Is originality a lot to bank on rather than take the safe way out with dvds or even blu-rays? Maybe yes, maybe not.
We can argue the semantics of investment all day. It all comes down to success in the end and the demand for their inventory of games. Originality often brings in more buyers. Also, we don't know how much the console itself will cost. With Moore's law in effect and prices of solidstate/flash storage continuously falling every year, it is not fair to compare the costs of the hardware to n64..