I disagree with much of what you say, and yes you do save $5 IN STORE. The prices aren’t reflected online, this has been going on for a few years at Walmart, known thing. Feel free to research it.
I was at walmart yesterday. lol.
But ok I forget what the games were priced at even though i stared at the Switch section for half a minute.
Anyway yes of course Walmart is massive and can put some pressure on pricing. I know they were selling NIntendo 1st party games in store for $50 for awhile instead of $60. It was a deliberate experiment that lasted maybe 1 year. And that was within the last 3 years iirc. But then it was disappeared. So must not have resulted in either higher enough sales overall for games or for Walmart through add-on purchases.
But a few points to that. Let's start with it isn't a huge difference even if we say the discount is $5 in store. You have to go in store. You have to drag yourself over to Walmart. Pay gas and put mileage on your car probably. Walk to the back. Find a clerk to open the door. To save $5. Well that's not a huge motivation. It also isn't resulting in the other retailers lowering their game prices. Hasn't stopped people from buying digitally. Even Nintendo now is reporting ~50% of game sales these days are digital purchases. And for Walmart it is probably more of a loss leader type of thing than anything.
This bleeding heart example of yours that $5 is a big savings for a family who buys 12 $60 games doesn't add up because your (example of a) "poor" family is buying 12 $60 games! Poor families are buying cheap used games at Gamestop for the previous gen system.
Next, Nintendo has plenty of every day discounts on eshop games. I'm pretty sure you get 10% back in points for every digital purchase on the eshop and have since day 1. And those points can be used to buy more games. That's $6 off a $60 game.
Next, Nintendo introduced the game pass vouchers this year which is any 2 games for $100. ONly open to Switch online members (membership fee.) Switch online can be had for pretty cheap if you put some friends/family members together. Max cost for minimum online package at list price is under $2/mo or $20/yr. If you can split the base family package ($35/yr) 8 ways with others, your cost is under $5/yr or under 50 cents/mo. (I use Nintendo examples because I am familiar with them.)
Third, eshop cards are routinely discounted. Frequent sales. At Costco, albeit behind that membership fee again, they are 10% off every day. And as much as 25% off 1-2 times/yr. Maybe that is a retailer benefit again.
. (Although typical pricing strategy where the direct channel is list price most of the time. But other channels routinely have discounts. )
Fourth, there are sales on the eshop frequently. Nintendo seemingly discounts each of their games at least once a year and probably more frequently. And the sale prices roughly match what I see in stores. Generally get down into the $40ish range for a 1st party $60 game. Not lower.