Update thanks to thethatfox:
Physical game cards may also not actually contain the game:
Nintendo Switch 2 Game-Key Card Overview
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.
Update 2: There is probably a difference in Game-key cards and card that contain real game data. So we don’t know right now how often these game-key cards are used or if nintendo is using them.
Inflation was for a long time offset by a steep decline in the cost of delivering the product, and thats still true for the digital copies to a large extent, but with most AAA games blowing huge budgets on production publishers have been wanting to push the ceiling up for years now.