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It’s fair for Mario kart where 7 others can join without owning a license. The social play elements can justify costs for a few.
Their narrow audience targeting could be a risky bet. We’ll see.
3 others can play Mario Kart or 7 other can play Smash Bros. on my Switch without any of them owning any games or hardware.
If a group of people contribute to owning game library it encourages social gaming. That’s the nintendo move imo.
We had a shared Wii U at my university dorm that everyone bought games for. You could do the same with a group Nintendo Switch.