Given the reaction of the mass market (i.e. the people who have no idea what video games are out there besides Mario, Madden, and Call of Duty), this will probably sell really, really well this holiday season.
I think that Nintendo could have easily bumped the number of games up by 10
Let's be honest with ourselves. Classic NES titles take up so little storage room, that they could easily have crammed hundreds of those games onto this device for pennies on the dollar. The ONLY real expense for Nintendo on this thing is the physical unit itself, and the licensing for games they do not personally have the rights to. The physical costs are easily offset by the price they're quoting. (NES-capable hardware, even at 1080p, is cheap as dirt) The mark-up on this device is going to be great for Nintendo. The licensing is the only real cost to them, and even that won't be nearly as bad as you might think. Most of those games haven't been profitably sold for decades, and the companies that do own them have handled them fairly incompetently. You wave a sizable enough check, or offer some manner of profit sharing, and they'll be on board.
Bottom line, this entire venture is ALL about Nintendo making mad money off of older gamer's nostalgia. It is a very transparent cash-grab. And if they wanted to they could have crammed way more content in, and still made a profit. And yes, it will almost certainly work, and sell like gangbusters this holiday season.
They are saving additional games for when they release the version 2 of this thing, that will look like the top-loading NES. Then will come the SNES, (most likely with 30 games) and then the re-designed SNES (with another 30 games). And then they will release special Famicom and Super Famicom editions with the same game line-ups, but with the Japanese versions instead of the US versions of those games. And then they will release a mini N64. All of this will take place over the course of the next four or five years. Instant additional revenue stream on games that haven't been sold physically in 15+ years. Insurance in case whatever the NX ends up being doesn't hit it big.