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It does not have to be connected to wifi to use it and it works just fine without it. The only thing you would need to have it connected to wifi for would be to download games from the Nintendo e-shop if you wanted to, or to play online with someone else around the world or down the street. One of the best features is the Nintendo Switch Online membership which costs $20 a year for a single user and slightly more for a family account. With a Nintendo Switch Online account, you can play games from the NES and SNES libraries on your Nintendo Switch. Older players who grew up playing on these older systems will definitely like this feature. You can also save your game progress to the cloud and download it if someone deletes your save data from the console. This is a very good feature for those games that take a long time to play such as "The Legend of Zelda:Breath of the Wild" or "Super Mario Odyssey."
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