The method you describe is untenable for 99.9% of the population. If that is truly the only way to migrate, then this move to passkeys is a catastrophe for security. In the coming years, millions of people are going to be permanently locked out of important accounts. Accounts will be written about the clearly flawed implementation of passkeys by Apple and Google, and a whole generation of people are going to shun passkeys forever. Myself included. This is a nightmare for vendor lock-in. I can see why Apple and Google are so ready to implement this.
Japanese customers are eternally married to physical media. Nintendo also relies on high resale value to sell their expensive games. If they tried to destroy the secondhand market, they couldn’t justify the prices of their games anymore.