$50 isn't a lot but you are looking it the wrong way. For $50 you can buy 3-4 PS4 exclusives like Uncharted Collection, Ratchet & Clank, Until Dawn, etc., and the Uncharted 4 bundle is $250. Suddenly I get 4-5 "free" games with the PS4. You think parents or gamers don't look at things like that? I can't be the only one who does.
I would think most parents this late in the "next generation" cycle have already either bought a console for their teenage kids, or they are being pushed into either the Xbox or the PS4 based on what that kid wants. I can't think of any parent of say a 12 year old boy who just walks up to Gamestop and decides a console based on the merits of that console and not because said 12 year old boy has been already asking for it by name a dozen times.
I see the Switch appealing more to parents with pre-teen and even younger kids that are shopping for basically a way to pacify those kids on plane rides or when daddy wants to get some peace and quiet. They won't compare this console to a PS4 or Xbox, they will compare it to a new iPad Mini which is $400 for the current 32GB model. I think that is how Nintendo plans to position the console, which is why its a tablet and why they showed smartphone parental controls off the bat. A placation device is preferable to a "real" console for these parents, as a real console will have more mature games and will have the kids fighting daddy and mommy for TV time when they just want to bingewatch some Netflix.
If they can build a reputation for having a decent game library that Jr wants to play without having to worry about the freemium crap where Jr runs up the credit card hundreds of dollars for some sort of digital ingame jewel (or almost as worse annoying bugging you to buy said jewels) like the iOS game market is pretty much built to do then they might have a hit. I have had more than one parent who asked me which placation device (that is what I call this genre) to get and every time I tried to suggest the 3DS the fact it had a resistive touchscreen was often a deal breaker (because parents like to justify these placation purchases under the umbrella of "the kid is learning new technology' which a resistive touchscreen is not). The Switch might finally be a second option to an iPad Mini, especially if down the road Nintendo puts out a new SKU with better battery life and no dock at a lower cost. The 3DS just needs to die first.
For all that, I would get just Zelda, Mario Kart 8 and I gotta wait until Holiday 2017 for Mario. It ends up costing $490 + $80x2 = $650 upfront for just 2 games. So clearly it's not about just $50. I can take $650 and get a new graphics card, do an entire mobo+CPU swap or spend it on Steam/PS4 games.
Yeah but no matter how much you spend on said PC you won't be able to play Zelda or Mario Kart 8 multiplayer battle mode. In fact within two years Nintendo might have more "must have" console exclusives than the Xbox One has up-to-this point. It could position itself to be the perfect secondary gaming device behind a PC or PS4.
The longer it takes for Nintendo to build a 20-30M Switch install base, the more 3rd party developers will skip developing/porting Switch games.
I would say its more accurate to say the install base is what will drive them to port current AAA games, probably watered down in some way. Indie developers are already embracing the Switch, in fact based on announcements I would say it already leapfrogged the Xbox One on that category. I for one am looking forward to games like Starbound or Yooka-Laylee on the Switch as much as any AAA title. The Switch is also a perfect way to play the better iOS and Android games that exist and can be ported.
That's why it's crucial to launch a console and have 50+ games out in the first 1-2 months.
That obviously won't happen, but we might see 40 games on there by the end of 2017:
https://en.wikipedia.org/wiki/List_of_Nintendo_Switch_games
Instead of trying to grow the install base to 20-30M asap and starting to make up $$$ on software while pricing the console at $199-249, they are trying to make $ day 1 on hardware.
Yeah they have made it clear they aren't taking a loss on the Switch. Part of that might be due to the position they are in financially.
Positioning the Switch against PS4/XB1 but ignoring that those consoles have hundreds of discounted games in their library is a mistake.
I agree with this 100%. Nintendo should have framed the Switch more as mobile device and compared it to an iPad vs comparing it to the PS4 or Xbox One. They made a decision to frame it more as a console because the 3DS is still doing well and the Wii U isn't so the Wii U is what they want replaced, but really they should have swallowed the bitter pill and announced what is clear- this console is replacing both product lines.
What I expect is the Switch will struggle early on, and then somewhere around year two they will rehash it with a SoC with longer battery life and a cheaper SKU without the dock and with the Mario game to completely cannibalize with by then will be a declining 3DS market. The problem between now and then is giving people enough to want to buy the generation 1 switch, which frankly might be a hard sell for parents wanting a placation device. Nintendo will probably end up learning some lessons the hard way, but there is no reason the Switch can't be a success in the long run if they change the value statement like they did with the 3DS after its so-so launch.