Nintendo Virtual Game Card Update Closes Switch Loophole
Once you update your Nintendo Switch to version 20.0.0 (which came out on April 29), you should see icons for two new features that will also be on the upcoming Switch 2: GameShare and Virtual Game Card. Nintendo's new sharing system promises to help people play simultaneously from a single game copy (provided one of the consoles is a Switch 2), but, as Ars Technica points out, this coincides with the end of a similar situation that worked with just Switches.
So long as you bought the digital copy of a game, you could have, for example, two players playing together with that same digital copy simultaneously. The key was to have an internet connection (and the purchasing Nintendo account) on the secondary console, instead of the primary. That system didn't work with physical copies. According to Ars Technica, that capability is gone, along with the Nintendo FAQ info on the topic. GameShare and the Virtual Game Cards are now the law of the Switch and Switch 2 land.
The GameShare feature is Nintendo's new way of letting you share a single game with other players. The other players don't need to be part of your family account, but you must have a Switch 2 and own the game. You then share the game with the other Switches via local wireless (the other player must be nearby).
The potential problem here is that the game must be 'compatible' with GameShare, suggesting that not all games will be. That adds confusion for people when they buy games—they need to check to make sure they'll be able to share them. We'll see how this shakes out when the Switch 2 arrives, but we have a sinking feeling that some expensive, popular games won't support GameShare. We can always hope.
As for the Virtual Game Cards, they represent the games you buy digitally. You can load/unload them to move them to another Switch. If you have family members who own Switches (and are part of your Nintendo Account family group), you can also lend your virtual game cards to them for up to 14 days. Once you lend the game, you can't play it until you have it back, so Nintendo included a way for you to retrieve the game from the borrower if you need it before the end of the 14-day lending period.
Interestingly, your Switch or Switch 2 should also have an Online License setting now. If you have a second Switch/Switch 2, you can skip the load/unload shenanigans and play a game without its Virtual Game Card present—so long as you have an internet connection.

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