Game-key cards are different from regular game cards, because they don’t contain the full game data. Instead, the game-key card is your “key” to downloading the full game to your system via the internet.
Pay a premium for a physical copy of your game, and the cartridge may not contain the actual game. Only on Nintendo Switch 2.
I don’t know that Nintendo was forcing the issue for profit. I also don’t know the costs and margins (if any) for Nintendo or who they were working with to get the storage, to be fair. But I have to assume that if Nintendo had signficantly cheaper access to storage and was artificially throttling to everybody else you’d have seen more first party games on larger carts, and that wasn’t necessarily the case.
Regardless, any solid state storage was always going to be more expensive than optical storage and scale up with size gradually in a way that optical storage doesn’t (until you have to go to a second disk or an additional layer, at least). Cartridges are just inherently riskier and more expensive, even at the relatively modest spec of the Switch 1. Definitely with what seems like competitive speeds in Switch 2.
That doesn’t mean one has to like the consequences of it. At the same time I’m not sure I can imagine a realistic alternative for a portable. We’re not doing UMD again, so…
The point about Nintendo not having significantly larger sizes on games could be attributed to a few things: