Not sure, but the installed base grows and so does the walled garden :) Nintendo always held the line on console prices, was my impression as opposed to Sega/Sony/PS. "Outdated" components and in-house circuitry, besides the ancient Tegra on the S1. I am spitballing from memory, someone else here might provide real insight. Regardless though, they require Mario Kart running on their HW, not a PC. Their margin is their decision.

There is also a very juicy accessory ecosystem. A Pro Controller is $90 these days. I've tried clones, but Nintendo paywalls a few things, like powering up from the controller.